Lets talk first about Employee Retention Credit Ultratax :
Our group here what do these people doing everybody in this room is assisting teach people about ERC and uh constantly supply a gorgeous breakfast and have people actually learn about the program we ought to head to the room where we are able to show a few of the checks that we are getting for companies and I ‘d like to see that what is this this is uh hundreds of countless dollars literally Kevin numerous millions of dollars so these are duplicate copies of the letters that go to customers validating that the check is on the way I indicate you know if you just start to 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 imply it’s just I suggest think about the number of 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 confirmed and the check is on the mail in the mail from the IRS heading to the client so that’s how you have the ability to track it you understand when you
receive this you understand the check is chosen sure which’s when they pay so they don’t pay anything up until they really get the cash they don’t pay bottom line Wonder trust anything until this letter is verified the check is on the way they deposit it into their checking account and they can really trust Wonder trust that the process has been finished and the number of you believe you have actually processed given that you began this we’re about 35 000 of these for
about six billion dollars wow so plainly they know what they’re doing which’s what you require you need professionals on the other end of the phone to process this and get it to where you get among these that’s what matters all right Mr Fantastic here you’re at my YouTube channel we’re discussing something really important today the staff member retention credit which most of you have actually never ever heard of I definitely hadn’t become aware of it until extremely recently and discovered a lot about it because this is probably the most affordable cost of capital for any small business anywhere
anytime if you have staff members between five and five hundred so I have actually got the professional with me this is Josh Fox he’s the creator and CEO of bottom line Concepts they’re the largest processor of these ERC credits this is a 170 page program so it’s not easy this isn’t like PPP we simply call up your bank manager and state provide me a loan it doesn’t 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 become yes the Ambassador and paid representative for this I like this program it’s going away soon you got to discover everything about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply start there so throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act offered businesses 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone it makes a big distinction right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the money money payroll tax refund okay go on sorry I just need to make sure we got that point I imply that’s a huge difference a loan versus money cash I like money money that’s what we’re talking about alright 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 beautiful hard check in the mail where you get real cash from the IRS all right so let’s discuss how it works since it seems like to me if it’s a if it’s staff member retention credit that person needed to be an employee so I’m going to make the Presumption this money is not for the owner not for individuals on the cap table not for shareholders it’s for workers right you had to have actually owned a business however it’s based upon you having W-2 workers in America not 10.99. As long as you had W-2 staff members and you paid federal payroll taxes that’s why you would be qualified so you have to be on payroll in 2020 on the W-2 and you have to be on payroll for the very first six months of 2021 on the W-2 appropriate so there were six 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 2 and three of 2021. fine so that’s how it’s measured you need to be on the W-2 during that period now let’s talk my favorite part money just how much can you return per employee that was on a W-2 in those 6 quarters so the computation in 2020 to be precise Kevin is 50 of the staff member’s salary to a maximum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers escalated to 70 of the staff member’s income to a maximum of 7 thousand per quarter how did that occur um they simply altered the rules in.
2021 versus due to the fact that the turmoil of the pandemic so they wanted to even get more to keep those employees on payroll 100 so if you can get 5 000 per person Max in twenty that was 50 in 2020 up to five thousand Max and after that what occurs 21 000 Max in 2021 oh that’s how you create twenty 6 thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty six thousand dollars per staff member that is since that’s a lot of cash it is now there’s a caution here the PPP cash would need to be reduced from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would minimize the 26 000 so what we’re seeing typically Kevin is if you took PPP money somewhere around 10 thousand dollars an individual so let’s say hypothetically you owned a restaurant in New York City where I’m from and you had a hundred staff members and you took PPP money you would still get a million dollar in the mail from the IRS so it’s huge obviously now the huge concern is why does nobody know about this because appearance when I first became aware of this when I first satisfied Josh you know I have actually got lots of financial investments in great deals of companies I’m a major supporter for entrepreneurship in America and make lots of lots of financial investments in entrepreneurs of which numerous suffered through the pandemic when I first found out about this I called BS I do not believe it due to the fact that I use the PPP we went through the cash center Banks to get it it was very easy to do we had our CEOs call the banks they got their loans which were well should have and we used them carefully to survive throughout the pandemic so when I became aware of this I stated nah it can’t hold true however when I dug around I even contacted us to my politician friends Guv Senators they didn’t learn about it I indicate that’s how you understand that’s how misinformation is that there’s no info out there then a bunch of people told me well you can’t get it due to the fact that you took the PPP likewise not true so let’s ask Josh why does nobody understand about the employee retention credit you understand what’s intriguing you’re speaking about the banks Kevin due to the fact that in the PPP loan process the federal government made it very clear that if you wanted a PPP loan you would call Wells Fargo Citibank Bank of America any of the big banks in our nation and they would process procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply process procedure that’s all um and here there was chaos due to the fact that keep in mind in the initial cares act you could refrain from doing both programs so if you had done PPP you might not do ERC in the original program and when they altered the law in 2021 the banks were refraining from doing ERC since it’s not alone so you’re getting a tax refund so the federal government never ever made it clear to any person about how to.
do this does your CFO understand how to do this not actually she or he’s never ever done it before do the banks do it nope the banks don’t do it the payroll companies yeah a few of them are doing it as a payroll business your accountant no your accounting professional’s never done this prior to unless you have an account that entered into this organization and bottom line my firm Kevin has actually stayed in business because 2009 and we’ve been working with the federal government and the state government to recover money for Fortune 500 Fortune 1000 business so a great deal of our huge big corporate customers have worked with bottom line to recuperate other federal government programs we’ve done sales tax and utilize tax joblessness tax work opportunity tax credits research and development tax credits unclaimed home property tax all of these other federal government programs.
The staff member retention tax credit is a broad based refundable tax credit designed to encourage.
employers to keep employees on their payroll. The credit is 50% of up to $10,000 in wages paid by an.
Since of COVID-19 or whose gross invoices, employer whose service is completely or partly suspended.
decline by more than 50%.
1. The credit is readily available to all employers regardless of size including tax exempt organizations. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) small.
companies who take Small company Loans.
2. To qualify, the employer needs to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s business is completely or partially suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are listed below 50% of the equivalent quarter in 2019. When the.
employer’s gross receipts go above 80% of a similar quarter in 2019 they no longer qualify.
after completion of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the qualifying wages paid up to $10,000 in total.
It works for salaries paid after March 13th and before December 31, 2020.
The definition of certifying incomes varies by whether a company had, typically, more or less than.
100 employees in 2019.
Companies that focus on ERC filing support typically provide expertise and support to help companies navigate the complex procedure of claiming the credit. They can use different services, including:.
How is the employee retention credit calculated? Employee Retention Credit Ultratax
Eligibility Assessment: These companies will evaluate your organization’s eligibility for the ERC based upon aspects such as your market, income, and operations. If you satisfy the requirements for the credit and identify the optimum credit amount you can declare, they can help identify.
Documents and Estimation: ERC filing services will help in gathering the required documents, such as payroll records and financial statements, to support your claim. They will likewise help determine the credit quantity based upon qualified salaries and other qualifying expenses.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for previous quarters, these business can review your past payroll records and financials to identify prospective opportunities for retroactive credits. They can assist you modify previous income tax return to declare these refunds.
Filing Help: Companies specializing in ERC filings will prepare and submit the essential forms and paperwork on your behalf. This includes completing Form 941 or any other required tax return.
Compliance and Updates: ERC policies and assistance have actually developed with time. These companies remain updated with the most recent changes and guarantee that your filings abide by the most existing standards. They can also provide continuous assistance if the internal revenue service demands additional info or performs an audit related to your ERC claim.
It is essential to research and veterinarian any business offering ERC filing help to ensure their trustworthiness and know-how. Try to find recognized firms with experience in tax and payroll services, or consider reaching out to relied on accounting firms or tax experts who offer ERC filing support.
Keep in mind that while these companies can offer valuable assistance, it’s always a great idea to have a standard understanding of the ERC requirements and process yourself. This will help you make notified choices and ensure precise filings.
The Staff Member 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 companies to retain and pay their employees during the pandemic, even if their operations have actually been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is available to qualified employers, consisting of for-profit organizations, tax-exempt companies, and particular governmental entities. To qualify, companies must satisfy one of two criteria:.
The business operations were totally or partly suspended due to a government order related to COVID-19.
Business experienced a significant decline in gross invoices. As mentioned earlier, for 2021, a substantial decrease is specified as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decline in gross receipts compared to the right away preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount is equal to a percentage (as much as 70%) of certified wages paid to employees, including certain health insurance expenses. The maximum credit per staff member is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, businesses that got an Income Protection Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 permits businesses to declare the ERC even if they got a PPP loan. However, the same incomes can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively broadened and boosted, enabling qualified companies to declare the credit for certified incomes paid as far back as March 13, 2020. This retroactive arrangement provides a chance for services to change prior-year tax returns and get refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their work income tax return, usually Type 941. If the credit exceeds the quantity of work taxes owed, the excess can be refunded to the employer.
It is very important to keep in mind that the ERC provisions and eligibility criteria have actually progressed over time. The best strategy is to consult with a tax professional or visit the main IRS website for the most in-depth and up-to-date info concerning the ERC, consisting of any current legal modifications or updates.
To qualify for the ERC, a service should satisfy one of the following requirements:.
The business operations were completely or partly suspended due to a government order related to COVID-19.
The business experienced a considerable decline in gross invoices. For 2021, a considerable decline is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the instantly preceding quarter.
The ERC is available to businesses of all sizes, including tax-exempt companies, however there are some exceptions. For instance, government entities and companies that received a PPP loan may have restrictions on claiming the credit.
The procedure for claiming the ERC includes completing the required kinds and including the credit on your work tax return (usually Kind 941). The exact time it requires to process the credit can vary based upon a number of aspects, including the intricacy of your company and the work of the IRS. It’s recommended to seek advice from a tax expert for guidance specific to your situation.
There are numerous business that can help with the procedure of declaring the ERC. Some well-known business that offer help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the details offered here is based on general knowledge and might not reflect the most current updates or modifications to the ERC. It is essential to consult with a tax expert or visit the official IRS website for the most updated and precise info regarding eligibility, declaring procedures, and readily available help.
Less than 100. The credit is based if the employer had 100 or less workers on average in 2019.
on salaries paid to all employees whether they really worked or not. In other words, even if the.
staff members worked full time and got paid for full-time work, the company still gets the credit.
Greater than 100. The credit is if the company had more than 100 workers on average in 2019.
allowed just for salaries paid to employees who did not work during the calendar quarter.
In both cases, “salaries” includes not simply cash payments however likewise a part of the cost of company.
provided healthcare. Employee Retention Credit Ultratax
Companies can be instantly reimbursed for the credit by decreasing the amount of payroll taxes they.