Lets talk first about Employee Retention Credit What You Need To Know :
Our team here what do these guys doing everybody in this room is assisting teach people about ERC and uh constantly provide a gorgeous breakfast and have individuals really discover the program we should head to the space where we are able to display some of the checks that we are getting for business and I want to see that what is this this is uh numerous countless dollars literally Kevin hundreds of countless dollars so these are duplicate copies of the letters that go to customers verifying that the check is on the method I imply you know if you just begin to take a look at a few of these here I indicate this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s simply I mean think of how many actual clients that went through the program yeah this is the very end this is the party at the end when the check is validated the numbers are confirmed and the check is on the mail in the mail from the IRS heading to the customer so that’s how you’re able to track it you understand when you
get this you understand the check is opted for sure which’s when they pay so they don’t pay anything until they really receive the cash they do not pay bottom line Wonder trust anything until this letter is confirmed the check is on the way they deposit it into their bank account and they can genuinely trust Wonder trust that the procedure has actually been ended up and how many you think you’ve processed given that you started this we have to do with 35 000 of these for
about 6 billion dollars wow so plainly they understand what they’re doing and that’s what you require you require 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 talking about something actually crucial today the worker retention credit which the majority of you have actually never ever become aware of I certainly hadn’t become aware of it till really just recently and found out a lot about it because this is probably the lowest cost of capital for any small company anywhere
anytime if you have employees in between five and five hundred so I have actually got the specialist with me this is Josh Fox he’s the founder and CEO of bottom line Ideas they’re the biggest processor of these ERC credits this is a 170 page program so it’s challenging this isn’t like PPP we just phone your bank manager and say 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 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 simply start there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act provided organizations 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly 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.
correct the cash cash payroll tax refund all right go on sorry I simply have to make certain we got that point I indicate that’s a big difference a loan versus money money I like money money that’s what we’re talking about okay 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 initial cares Act is the ERC and yes Kevin it is a beautiful difficult 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 employee retention credit that individual had to be an employee so I’m going to make the Presumption this money 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 actually owned a company but it’s based upon you having W-2 employees 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 eligible so you have to be on payroll in 2020 on the W-2 and you have to be on payroll for the very first 6 months of 2021 on the W-2 appropriate so there were six quarters the program was open well stroll us through the 6 quarters so you had quarters 2 three and 4 of 2020 and you had quarters one two and three of 2021. all right so that’s how it’s measured you need to be on the W-2 throughout that duration now let’s talk my preferred part cash just how much can you return per staff member that was on a W-2 in those six quarters so the estimation in 2020 to be exact Kevin is 50 of the staff member’s salary to a maximum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the employee’s income to a maximum of 7 thousand per quarter how did that happen um they simply altered the rules in.
2021 versus due to the fact that the chaos of the pandemic so they wished 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 after that what occurs 21 000 Max in 2021 oh that’s how you create twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty 6 thousand dollars per worker that is since that’s a great deal of money it is now there’s a caveat 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 2 you would decrease the 26 000 so what we’re seeing on average Kevin is if you took PPP money somewhere 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 employees and you took PPP money you would still get a million dollar in the mail from the IRS so it’s huge certainly now the big question is why does nobody learn about this since appearance when I initially found out about this when I initially fulfilled Josh you know I’ve got lots of financial investments in lots of business I’m a significant advocate for entrepreneurship in America and make lots of lots of investments in business owners of which lots of suffered through the pandemic when I first found out about this I called BS I don’t think it since 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 deserved and we used them sensibly to survive throughout the pandemic so when I heard about this I said nah it can’t hold true but when I dug around I even called to my political leader pals Guv Senators they didn’t learn about it I suggest that’s how you know that’s how misinformation is that there’s no information out there then a lot of people told me well you can’t get it due to the fact that you took the PPP also not real so let’s ask Josh why does no one learn about the employee retention credit you understand what’s fascinating you’re talking about the banks Kevin since in the PPP loan process the federal government made it really clear that if you wanted a PPP loan you would call Wells Fargo Citibank Bank of America any of the huge 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 procedure process that’s all um and here there was mayhem because keep in mind in the original cares act you could refrain from doing both programs so if you had actually done PPP you might refrain from doing ERC in the initial program and when they changed 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 made it clear to any person about how to.
do this does your CFO know how to do this not truly he or she’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 company your accounting professional no your accounting professional’s never done this before unless you have an account that entered into this service and bottom line my company Kevin has actually stayed in business because 2009 and we have actually been working with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 business so a great deal of our big huge corporate customers have actually worked 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 home real estate tax all of these other government programs.
The worker retention tax credit is a broad based refundable tax credit created to encourage.
companies to keep workers on their payroll. The credit is 50% of as much as $10,000 in incomes paid by an.
Due to the fact that of COVID-19 or whose gross invoices, employer whose organization is completely or partially suspended.
decrease by more than 50%.
1. The credit is readily available to all companies no matter size including tax exempt organizations. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) little.
organizations who take Small Business Loans.
2. To certify, the employer needs to satisfy one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s organization is fully or partially suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross invoices are listed below 50% of the similar quarter in 2019. As soon as the.
company’s gross receipts exceed 80% of a similar quarter in 2019 they no longer qualify.
after completion of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the qualifying incomes paid up to $10,000 in total.
It works for earnings paid after March 13th and before December 31, 2020.
The definition of qualifying incomes differs by whether an employer had, on average, basically than.
100 employees in 2019.
Business that concentrate on ERC filing assistance generally offer competence and support to assist businesses navigate the complex process of claiming the credit. They can provide numerous services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit What You Need To Know
Eligibility Evaluation: These companies will assess your company’s eligibility for the ERC based on aspects such as your industry, revenue, and operations. They can help determine if you meet the requirements for the credit and determine the maximum credit amount you can declare.
Documents and Estimation: ERC filing services will assist in gathering the essential paperwork, such as payroll records and financial declarations, to support your claim. They will likewise help calculate the credit quantity based upon qualified incomes and other qualifying expenditures.
Retroactive Claim Review: If you are qualified to claim the ERC for previous quarters, these business can review your previous payroll records and financials to identify possible chances for retroactive credits. They can help you modify prior income tax return to declare these refunds.
Filing Assistance: Business focusing on ERC filings will prepare and submit the needed types and documents in your place. This consists of finishing Form 941 or any other necessary tax return.
Compliance and Updates: ERC policies and assistance have progressed in time. These business stay upgraded with the current modifications and ensure that your filings abide by the most existing guidelines. They can likewise provide continuous support if the IRS demands extra information or performs an audit related to your ERC claim.
It is essential to research study and veterinarian any company providing ERC filing support to guarantee their reliability and competence. Look for established firms with experience in tax and payroll services, or think about connecting to trusted accounting firms or tax experts who provide ERC submitting support.
Bear in mind that while these business can offer important assistance, it’s always a great idea to have a basic understanding of the ERC requirements and procedure yourself. This will help you make informed decisions and ensure precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief steps. The goal of the ERC is to motivate organizations to keep 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 readily available to qualified companies, including for-profit services, tax-exempt organizations, and certain governmental entities. To qualify, companies should satisfy one of two criteria:.
Business operations were totally or partially suspended due to a federal government order related to COVID-19.
The business experienced a considerable decline in gross invoices. As pointed out earlier, for 2021, a significant decline is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decline in gross invoices compared to the right away preceding quarter.
Credit Quantity: 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 (approximately 70%) of certified incomes paid to staff members, consisting of certain health plan costs. The maximum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, businesses that received an Income Security Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 permits organizations to claim the ERC even if they received a PPP loan. Nevertheless, the very same wages can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and enhanced, allowing qualified companies to declare the credit for certified salaries paid as far back as March 13, 2020. This retroactive provision offers a chance for companies to modify prior-year tax returns and get refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their work income tax return, usually Type 941. If the credit surpasses 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 progressed with time. The best strategy is to talk to a tax expert or visit the official internal revenue service site for the most updated and detailed information concerning the ERC, consisting of any recent legal modifications or updates.
To qualify for the ERC, a company should satisfy among the following requirements:.
The business operations were fully or partly suspended due to a federal government order related to COVID-19.
Business experienced a significant decline in gross invoices. For 2021, a substantial decrease is specified as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a substantial decrease is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross invoices compared to the right away preceding quarter.
The ERC is available to companies of all sizes, including tax-exempt organizations, however there are some exceptions. For instance, government entities and services that received a PPP loan might have restrictions on declaring the credit.
The process for claiming the ERC includes completing the required forms and including the credit on your work income tax return (generally Type 941). The exact time it requires to process the credit can differ based on a number of factors, consisting of the complexity of your organization and the workload of the internal revenue service. It’s suggested to consult with a tax expert for guidance specific to your scenario.
There are a number of companies that can help with the process of claiming the ERC. Some widely known companies 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 understanding and might not show the most recent updates or modifications to the ERC. It’s important to consult with a tax expert or check out the official IRS site for the most accurate and current information relating to eligibility, declaring procedures, and offered assistance.
Less than 100. If the company had 100 or less staff members on average in 2019, then the credit is based.
on earnings paid to all employees whether they really worked or not. In other words, even if the.
employees worked full-time and got paid for full-time work, the company 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 incomes paid to staff members who did not work throughout the calendar quarter.
In both cases, “earnings” consists of not just cash payments but also a part of the cost of company.
supplied health care. Employee Retention Credit What You Need To Know
Employers can be right away compensated for the credit by lowering the quantity of payroll taxes they.