Lets talk first about Employee Retention Credit Tip Wages :
Our group here what do these guys doing everyone in this room is helping teach people about ERC and uh constantly supply a stunning breakfast and have individuals truly learn about the program we ought to head to the space where we are able to show a few of the checks that we are getting for business and I wish to see that what is this this is uh hundreds of countless dollars actually Kevin hundreds of countless dollars so these are replicate copies of the letters that go to clients confirming that the check is on the way I suggest you know if you just start to take a look at some of these here I suggest this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s simply I imply consider how many actual customers that went through the program yeah this is the very end this is the party at the end when the check is confirmed the numbers are validated and the check is on the mail in the mail from the IRS heading to the consumer so that’s how you have the ability to track it you understand when you
get this you understand the check is gone for sure and that’s when they pay so they don’t pay anything up until they in fact receive the money they don’t pay bottom line Wonder trust anything up until this letter is verified the check is on the method they deposit it into their savings account and they can truly rely on Wonder trust that the process has actually been ended up and the number of you believe you’ve processed considering that you started this we have to do with 35 000 of these for
about six billion dollars wow so clearly they understand what they’re doing and that’s what you need you need specialists on the other end of the phone to process this and get it to where you get one of these that’s what matters all right Mr Wonderful here you’re at my YouTube channel we’re speaking about something actually important today the employee retention credit which the majority of you have never heard of I certainly had not heard of it up until very recently and found out a lot about it because this is probably the most affordable expense of capital for any small business anywhere
anytime if you have staff members between 5 and five hundred so I’ve got the professional with me this is Josh Fox he’s the founder and CEO of bottom line Concepts they’re the biggest processor of these ERC credits this is a 170 page program so it’s hard this isn’t like PPP we simply phone your bank supervisor and state provide me a loan it does not work there’s not a loan it’s an application and Josh is going to inform all of us about it and how to get it and why I’ve ended up being yes the Ambassador and paid spokesperson for this I enjoy this program it’s disappearing very soon you got to discover everything about it let’s talk worker retention credit Josh Fox what is an ERC let’s just begin there so during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act provided organizations three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everybody it makes a huge distinction right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the money money payroll tax refund all right go on sorry I simply need to ensure we got that point I imply that’s a big distinction a loan versus money cash I like cash cash that’s what we’re speaking about all right and the other loans are done so we’re sitting here in 2023 and the eidl is over the PPP is over and the only one left from the original cares Act is the ERC and yes Kevin it is a stunning difficult check in the mail where you get real cash from the IRS all right so let’s discuss how it works due to the fact that it seems like to me if it’s a if it’s worker retention credit that person had to be a staff member so I’m going to make the Assumption this cash is not for the owner not for people on the cap table not for investors it’s for staff members right you had to have owned an organization however it’s based on you having W-2 staff members in America not 10.99. so as long as you had W-2 staff members and you paid federal payroll taxes that’s why you would be eligible so you need to be on payroll in 2020 on the W-2 and you need to be on payroll for the first 6 months of 2021 on the W-2 correct so there were 6 quarters the program was open well stroll us through the six quarters so you had quarters two 3 and four of 2020 and you had quarters one two and three of 2021. all right so that’s how it’s determined you have to be on the W-2 during that period now let’s talk my preferred part cash just how much can you return per employee that was on a W-2 in those six quarters so the computation in 2020 to be specific Kevin is 50 of the worker’s salary to a maximum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers escalated to 70 of the employee’s wage to a maximum of 7 thousand per quarter how did that occur um they just altered the rules in.
2021 versus since the chaos of the pandemic so they wanted to even get more to keep those workers on payroll 100 so if you can get 5 000 per person Max in twenty that was 50 in 2020 approximately 5 thousand Max and then what occurs 21 000 Max in 2021 oh that’s how you create twenty 6 thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty 6 thousand dollars per staff member that is because that’s a great deal of cash it is now there’s a caution here the PPP money would have to be decreased from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would lower the 26 000 so what we’re seeing on average Kevin is if you took PPP money someplace around ten thousand dollars a person so let’s say hypothetically you owned a restaurant in New york city City where I’m from and you had a hundred workers and you took PPP money you would still get a million dollar in the mail from the internal revenue service so it’s big clearly now the huge question is why does no one know about this since look when I initially became aware of this when I initially met Josh you understand I’ve got great deals of investments in great deals of business I’m a major supporter for entrepreneurship in America and make many numerous financial investments in entrepreneurs of which many suffered through the pandemic when I first heard about this I called BS I do not believe it since I utilize the PPP we went through the money center Banks to get it it was very easy to do we had our CEOs call the banks they got their loans and that were well deserved and we used them carefully to survive during the pandemic so when I became aware of this I said nah it can’t hold true but when I dug around I even called to my political leader pals Governor Senators they didn’t understand about it I imply that’s how you know that’s how false information is that there’s no details out there then a lot of people informed me well you can’t get it since you took the PPP also not true so let’s ask Josh why does no one know about the staff member retention credit you understand what’s fascinating you’re speaking about the banks Kevin since in the PPP loan procedure the federal government made it really clear that if you desired a PPP loan you would call Wells Fargo Citibank Bank of America any of the huge banks in our country and they would process process in Canada a pre-pp loan there’s no loans in Canada by the way it’s just procedure process that’s all um and here there was mayhem since remember in the initial cares act you might refrain from doing both programs so if you had done PPP you might refrain from doing ERC in the initial program and when they changed the law in 2021 the banks were not doing ERC since it’s not alone so you’re getting a tax refund so the federal government never ever made it clear to anyone about how to.
do this does your CFO know how to do this not really he or she’s never ever done it before do the banks do it nope the banks do not do it the payroll companies yeah a few of them are doing it as a payroll company your accountant no your accounting professional’s never ever done this prior to unless you have an account that entered into this service and bottom line my firm Kevin has stayed in business considering that 2009 and we’ve been dealing with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 companies so a lot of our huge big business clients have actually dealt with bottom line to recover other federal government programs we have actually done sales tax and use tax unemployment tax work opportunity tax credits research and development tax credits unclaimed property property tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit created to motivate.
companies to keep employees on their payroll. The credit is 50% of up to $10,000 in wages paid by an.
company whose business is totally or partially suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
Availability.
1. The credit is offered to all employers no matter size consisting of tax exempt organizations. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) little.
companies who take Small Business Loans.
2. To certify, the employer has to satisfy one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s organization is totally or partially suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the similar quarter in 2019. Once the.
employer’s gross receipts exceed 80% of an equivalent quarter in 2019 they no longer certify.
after completion of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the qualifying wages paid up to $10,000 in total.
It works for earnings paid after March 13th and prior to December 31, 2020.
The definition of certifying earnings varies by whether an employer had, typically, basically than.
100 employees in 2019.
Business that focus on ERC filing assistance typically offer proficiency and assistance to help organizations browse the complicated procedure of declaring the credit. They can provide different services, including:.
How is the employee retention credit calculated? Employee Retention Credit Tip Wages
Eligibility Evaluation: These companies will assess your business’s eligibility for the ERC based upon elements such as your market, earnings, and operations. If you satisfy the requirements for the credit and recognize the optimum credit amount you can declare, they can help figure out.
Paperwork and Computation: ERC filing services will assist in collecting the necessary documents, such as payroll records and monetary declarations, to support your claim. They will also help compute the credit amount based on eligible earnings and other qualifying expenditures.
Retroactive Claim Review: If you are qualified to claim the ERC for previous quarters, these companies can review your past payroll records and financials to recognize possible opportunities for retroactive credits. They can help you change previous tax returns to declare these refunds.
Filing Assistance: Companies concentrating on ERC filings will prepare and send the necessary kinds and documentation in your place. This consists of finishing Kind 941 or any other required tax forms.
Compliance and Updates: ERC policies and guidance have progressed over time. These companies stay updated with the most recent changes and make sure that your filings abide by the most current standards. If the Internal revenue service demands extra information or carries out an audit related to your ERC claim, they can likewise provide ongoing support.
It is necessary to research study and vet any company using ERC filing assistance to guarantee their trustworthiness and know-how. Search for established companies with experience in tax and payroll services, or think about connecting to relied on accounting firms or tax experts who use ERC submitting assistance.
Bear in mind that while these business can supply important help, it’s always a good concept to have a standard understanding of the ERC requirements and process yourself. This will help you make informed choices and make sure accurate filings.
The Worker Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief steps. The objective of the ERC is to motivate organizations to maintain and pay their staff members throughout the pandemic, even if their operations have actually been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to qualified employers, including for-profit organizations, tax-exempt organizations, and specific governmental entities. To certify, companies must fulfill one of two criteria:.
The business operations were totally or partially suspended due to a government order related to COVID-19.
The business experienced a considerable decrease in gross invoices. As mentioned earlier, for 2021, a considerable decrease is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decline is specified as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit quantity is equal to a portion (up to 70%) of qualified earnings paid to workers, including specific health insurance expenses. The maximum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, organizations that received an Income Protection Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 enables services to claim the ERC even if they received a PPP loan. Nevertheless, the exact same salaries can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively broadened and boosted, allowing qualified employers to declare the credit for certified wages paid as far back as March 13, 2020. This retroactive provision provides an opportunity for organizations to modify prior-year tax returns and receive refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their work income tax return, usually Type 941. The excess can be refunded to the employer if the credit goes beyond the amount of employment taxes owed.
It is very important to keep in mind that the ERC arrangements and eligibility criteria have actually evolved over time. The very best strategy is to talk to a tax expert or check out the main internal revenue service website for the most updated and detailed details concerning the ERC, including any current legal changes or updates.
To get approved for the ERC, a business needs to satisfy one of the following requirements:.
The business operations were totally or partially suspended due to a government order related to COVID-19.
The business experienced a substantial decrease in gross invoices. For 2021, a substantial decrease is specified as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a substantial decline is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
The ERC is available to companies of all sizes, including tax-exempt companies, however there are some exceptions. For instance, government entities and organizations that got a PPP loan may have constraints on declaring the credit.
The process for declaring the ERC includes completing the required forms and including the credit on your employment tax return (normally Form 941). The exact time it takes to process the credit can vary based on numerous elements, consisting of the complexity of your organization and the workload of the IRS. It’s suggested to seek advice from a tax professional for assistance specific to your circumstance.
There are several companies that can help with the process of claiming the ERC. Some widely known companies that use help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the info provided here is based upon general understanding and may not show the most recent updates or modifications to the ERC. It is essential to speak with a tax professional or check out the main IRS website for the most accurate and current information relating to eligibility, claiming procedures, and readily available assistance.
Less than 100. If the company had 100 or fewer staff members on average in 2019, then the credit is based.
on incomes paid to all employees whether they really worked or not. Simply put, even if the.
staff members worked full-time and earned money for full time work, the employer still gets the credit.
Greater than 100. The credit is if the employer had more than 100 employees on average in 2019.
permitted just for salaries paid to employees who did not work during the calendar quarter.
In both cases, “earnings” consists of not just cash payments however likewise a portion of the cost of company.
supplied health care. Employee Retention Credit Tip Wages
Payment.
Companies can be immediately repaid for the credit by lowering the quantity of payroll taxes they.