Lets talk first about Employee Retention Credit Years :
Our group here what do these people doing everybody in this room is helping teach individuals about ERC and uh always offer a lovely breakfast and have individuals really learn about the program we need to head to the space where we have the ability to show some 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 replicate copies of the letters that go to customers validating that the check is on the way I mean you know if you simply start to look at some of these here I imply this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I mean it’s simply I suggest consider the number of real clients that went through the program yeah this is the very end this is the celebration at the end when the check is verified 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’re able to track it you know when you
receive this you know the check is chosen sure which’s when they pay so they don’t pay anything until they really receive the money they don’t pay bottom line Wonder trust anything up until this letter is verified the check is on the way they transfer it into their checking account and they can genuinely trust Wonder trust that the process has been ended up and how many you believe you have actually processed since you began this we’re about 35 000 of these for
about six billion dollars wow so clearly they understand what they’re doing which’s what you need you need specialists 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 actually crucial today the worker retention credit which the majority of you have actually never become aware of I definitely hadn’t heard of it up until really recently and learned a lot about it because this is most likely the most affordable expense of capital for any small business anywhere
anytime if you have employees in 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 difficult this isn’t like PPP we just phone your bank supervisor and state give me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to tell all of us about it and how to get it and why I have actually become yes the Ambassador and paid representative for this I like this program it’s going away very soon you got to learn everything about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply start there so during the Trump Administration when President Trump was enacted they created the cares Act and the cares act offered businesses three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone it makes a huge distinction right there 2 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 fine go on sorry I simply need to make certain we got that point I suggest that’s a big distinction a loan versus cash money I like money cash that’s what we’re talking about fine 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 hard check in the mail where you get real money from the IRS all right so let’s discuss how it works since it sounds like to me if it’s a if it’s worker retention credit that person had to be a worker so I’m going to make the Presumption this money is not for the owner not for people on the cap table not for shareholders it’s for workers right you needed to have owned a company however it’s based on you having W-2 staff members in America not 10.99. As long as you had W-2 workers 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 6 quarters the program was open well walk us through the 6 quarters so you had quarters two 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 favorite part money how much can you return per worker that was on a W-2 in those 6 quarters so the computation in 2020 to be specific Kevin is 50 of the employee’s salary to an optimum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers increased to 70 of the worker’s wage to a maximum of seven 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 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 six 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 money it is now there’s a caution here the PPP cash would need to be minimized from the twenty 6 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 cash someplace around ten thousand dollars an individual so let’s say hypothetically you owned a restaurant in New york city City where I’m from and you had a hundred staff members and you took PPP cash 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 nobody understand about this due to the fact that appearance when I first heard about this when I initially satisfied Josh you know I’ve got lots of financial investments in great deals of business I’m a major advocate for entrepreneurship in America and make many many financial investments in business owners of which lots of suffered through the pandemic when I first heard about this I called BS I don’t think it due to the fact that I utilize the PPP we went through the money center Banks to get it it was extremely easy to do we had our CEOs call the banks they got their loans and that were well should have and we used them carefully to survive throughout the pandemic so when I found out about this I said nah it can’t be true but when I dug around I even contacted us to my politician good friends Governor Senators they didn’t know about it I imply that’s how you know that’s how false information is that there’s no details out there then a bunch of individuals informed me well you can’t get it because you took the PPP likewise not real so let’s ask Josh why does no one know about the worker retention credit you understand what’s fascinating you’re speaking about the banks Kevin since 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 huge banks in our country and they would process procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply procedure procedure that’s all um and here there was turmoil since remember in the original cares act you could not do both programs so if you had done PPP you might not do ERC in the original 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 government never made it clear to anyone about how to.
do this does your CFO understand how to do this not really she or he’s never done it in the past 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 accounting professional no your accountant’s never ever done this before unless you have an account that entered into this company and bottom line my company Kevin has actually been in business given that 2009 and we have actually been dealing with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 companies so a lot of our huge huge corporate customers have worked with bottom line to recover other federal government programs we have actually done sales tax and utilize tax joblessness tax work chance tax credits research and development tax credits unclaimed home real estate tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit developed to motivate.
companies to keep staff members on their payroll. The credit is 50% of approximately $10,000 in salaries paid by an.
company whose company is fully or partly suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
Accessibility.
1. The credit is offered to all companies regardless of size consisting of tax exempt organizations. There are.
just two exceptions: (1) state and city governments and their instrumentalities and (2) little.
companies who take Small Business Loans.
2. To qualify, the employer needs to satisfy one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s organization is completely or partially suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross receipts are below 50% of the equivalent quarter in 2019. As soon as the.
company’s gross invoices exceed 80% of an equivalent quarter in 2019 they no longer qualify.
after completion of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the certifying incomes paid up to $10,000 in overall.
It works for incomes paid after March 13th and before December 31, 2020.
The definition of qualifying wages differs by whether an employer had, on average, basically than.
100 workers in 2019.
Companies that specialize in ERC filing assistance typically offer expertise and assistance to assist organizations navigate the intricate process of claiming the credit. They can use different services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Years
Eligibility Evaluation: These companies will assess your service’s eligibility for the ERC based on elements such as your market, income, and operations. They can assist figure out if you meet the requirements for the credit and identify the maximum credit quantity you can claim.
Paperwork and Estimation: ERC filing services will help in gathering the needed paperwork, such as payroll records and financial statements, to support your claim. They will likewise help determine the credit amount based on eligible incomes and other certifying expenditures.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for prior quarters, these business can evaluate your past payroll records and financials to determine possible chances for retroactive credits. They can assist you amend previous income tax return to claim these refunds.
Filing Support: Business focusing on ERC filings will prepare and send the required kinds and documents in your place. This includes completing Kind 941 or any other necessary tax return.
Compliance and Updates: ERC guidelines and assistance have actually developed with time. These business stay upgraded with the current changes and ensure that your filings abide by the most existing guidelines. If the Internal revenue service requests additional details or carries out an audit associated to your ERC claim, they can likewise supply continuous support.
It is necessary to research study and veterinarian any company providing ERC filing support to guarantee their reliability and proficiency. Look for recognized companies with experience in tax and payroll services, or consider reaching out to relied on accounting companies or tax professionals who provide ERC submitting support.
Remember that while these business can provide important assistance, it’s always a great idea to have a basic understanding of the ERC requirements and process yourself. This will help you make notified choices and ensure precise filings.
The Worker Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief steps. The objective of the ERC is to motivate services to retain and pay their employees during the pandemic, even if their operations have actually been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to qualified employers, consisting of for-profit services, tax-exempt organizations, and particular governmental entities. To qualify, companies should satisfy one of two requirements:.
The business operations were totally or partly suspended due to a federal government order related to COVID-19.
The business experienced a substantial decrease in gross receipts. As discussed previously, for 2021, a substantial decline is defined as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decline in gross invoices compared to the very same quarter in 2019, or a 20% decline in gross invoices compared to the instantly preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount amounts to a portion (as much as 70%) of qualified salaries paid to staff members, including certain health insurance costs. The optimum credit per employee 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 Defense Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 permits organizations to claim the ERC even if they got a PPP loan. The very same wages can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and enhanced, allowing qualified employers to declare the credit for qualified incomes paid as far back as March 13, 2020. This retroactive provision provides a chance for organizations to modify prior-year tax returns and receive refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their work income tax return, usually Type 941. The excess can be reimbursed to the company if the credit goes beyond the quantity of employment taxes owed.
It is very important to keep in mind that the ERC arrangements and eligibility criteria have progressed with time. The best strategy is to speak with a tax professional or go to the main internal revenue service site for the most detailed and updated details regarding the ERC, including any recent legislative modifications or updates.
To get approved for the ERC, an organization must meet one of the following criteria:.
Business operations were fully or partially suspended due to a government order related to COVID-19.
The business experienced a considerable decline in gross receipts. For 2021, a significant decline is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a substantial decline is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross receipts compared to the right away preceding quarter.
The ERC is offered to services of all sizes, consisting of tax-exempt companies, but there are some exceptions. Federal government entities and businesses that received a PPP loan might have restrictions on claiming the credit.
The process for claiming the ERC includes completing the needed types and consisting of the credit on your work income tax return (typically Type 941). The exact time it requires to process the credit can vary based on numerous aspects, consisting of the complexity of your business and the workload of the IRS. It’s suggested to seek advice from a tax professional for guidance specific to your situation.
There are several business that can assist with the process of claiming the ERC. These include accounting companies, tax advisory services, and payroll company. Some popular companies that provide help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research study and contact these companies directly to inquire about their costs and services.
Please keep in mind that the details offered here is based upon basic understanding and might not reflect the most recent updates or modifications to the ERC. It’s important to consult with a tax expert or go to the official internal revenue service site for the most accurate and up-to-date details regarding eligibility, declaring treatments, and offered assistance.
Less than 100. If the company had 100 or less employees usually in 2019, then the credit is based.
on salaries paid to all staff members whether they really worked or not. To put it simply, even if the.
workers worked full-time and made money for full time work, the company still gets the credit.
Greater than 100. If the employer had more than 100 employees usually in 2019, then the credit is.
permitted only for wages paid to workers who did not work during the calendar quarter.
In both cases, “incomes” includes not just cash payments however also a part of the expense of company.
provided healthcare. Employee Retention Credit Years
Payment.
Employers can be immediately reimbursed for the credit by decreasing the amount of payroll taxes they.