Lets talk first about Erc Employee Retention Credit :
Our team here what do these people doing everyone in this room is assisting teach individuals about ERC and uh always provide a stunning breakfast and have people really learn more about the program we must head to the space where we are able to show some of the checks that we are getting for companies and I want to see that what is this this is uh numerous countless dollars literally Kevin numerous countless dollars so these are replicate copies of the letters that go to customers confirming that the check is on the method I indicate you know if you just start to take a look at some 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 just I indicate 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 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 and that’s when they pay so they do not pay anything till they in fact get the money they do not pay bottom line Wonder trust anything until this letter is confirmed the check is on the way they transfer it into their bank account and they can genuinely rely on Wonder trust that the procedure has actually been finished and how many you believe you have actually processed since you began this we’re about 35 000 of these for
about 6 billion dollars wow so plainly they understand what they’re doing which’s what you need you require 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 talking about something truly important today the employee retention credit which most of you have never ever heard of I certainly hadn’t heard of it till extremely just recently and found out a lot about it since this is probably the lowest expense of capital for any small company anywhere
anytime if you have staff members between five and five hundred so I have actually got the expert with me this is Josh Fox he’s the creator and CEO of bottom line Principles 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 contact your bank manager and state give me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to inform us all about it and how to get it and why I have actually become yes the Ambassador and paid spokesperson for this I like this program it’s going away very 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 during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act used organizations 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 big distinction right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
fix the money money payroll tax refund fine go on sorry I simply need to ensure we got that point I indicate that’s a big distinction a loan versus money cash I like cash money that’s what we’re discussing 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 stunning difficult check in the mail where you get actual money 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 staff member retention credit that individual had to be a worker so I’m going to make the Assumption this cash is not for the owner not for people on the cap table not for shareholders it’s for employees right you had to have actually owned an organization but it’s based upon you having W-2 workers in America not 10.99. so as long as you had W-2 workers 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 right so there were six quarters the program was open well stroll us through the 6 quarters so you had quarters two 3 and four of 2020 and you had quarters one 2 and three of 2021. all right so that’s how it’s determined you have 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 six quarters so the estimation in 2020 to be exact 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 salary to a maximum of 7 thousand per quarter how did that happen um they just changed the rules in.
2021 versus because the turmoil of the pandemic so they wanted to even get more to keep those staff members on payroll 100 so if you can get 5 000 per person Max in twenty that was 50 in 2020 approximately five thousand Max and then what occurs 21 000 Max in 2021 oh that’s how you develop twenty 6 thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per employee that is since that’s a lot of cash it is now there’s a caveat here the PPP money would have to be lowered from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would minimize the 26 000 so what we’re seeing usually Kevin is if you took PPP cash somewhere around ten thousand dollars a person so let’s say hypothetically you owned a dining establishment in New york city City where I’m from and you had a hundred workers and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s huge undoubtedly now the big question is why does nobody know about this because look when I first heard about this when I initially fulfilled Josh you know I’ve got great deals of financial investments in lots of companies I’m a significant advocate for entrepreneurship in America and make lots of many financial investments in entrepreneurs of which many suffered through the pandemic when I initially found out about this I called BS I don’t believe it due to the fact that I utilize the PPP we went through the cash center Banks to get it it was really easy to do we had our CEOs call the banks they got their loans and that were well deserved and we utilized them sensibly to stay alive throughout the pandemic so when I heard about this I said nah it can’t be true however when I dug around I even called to my political leader good friends Guv Senators they didn’t understand about it I suggest 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 since you took the PPP likewise not real so let’s ask Josh why does nobody understand about the staff member retention credit you know what’s fascinating you’re discussing the banks Kevin due to the fact that 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 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 just process process that’s all um and here there was turmoil because remember in the initial cares act you might not do 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 refraining from doing ERC since it’s not alone so you’re getting a tax refund so the 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 accounting professional no your accountant’s never done this prior to unless you have an account that entered into this service and bottom line my firm Kevin has actually stayed in business given that 2009 and we have actually been working with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 companies so a lot of our huge big corporate clients have actually worked with bottom line to recover 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 government programs.
The staff member 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 wages paid by an.
Because of COVID-19 or whose gross receipts, employer whose company is fully or partially suspended.
decline by more than 50%.
1. The credit is available to all employers regardless of size consisting of tax exempt companies. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
businesses who take Small Business Loans.
2. To qualify, the employer has to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s business is fully or partially suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross receipts are below 50% of the comparable quarter in 2019. Once the.
company’s gross invoices exceed 80% of an equivalent quarter in 2019 they no longer certify.
after the end of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the certifying incomes paid up to $10,000 in total.
It works for incomes paid after March 13th and before December 31, 2020.
The definition of qualifying salaries varies by whether a company had, typically, more or less than.
100 staff members in 2019.
Companies that focus on ERC filing assistance normally provide know-how and support to assist businesses browse the intricate process of declaring the credit. They can use various services, consisting of:.
How is the employee retention credit calculated? Erc Employee Retention Credit
Eligibility Evaluation: These companies will evaluate your service’s eligibility for the ERC based upon factors such as your market, revenue, and operations. If you meet the requirements for the credit and identify the optimum credit amount you can claim, they can assist determine.
Documents and Computation: ERC filing services will assist in gathering the required paperwork, such as payroll records and financial declarations, to support your claim. They will likewise help calculate the credit quantity based upon eligible incomes and other certifying costs.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for previous quarters, these business can examine your past payroll records and financials to recognize potential opportunities for retroactive credits. They can help you amend prior tax returns to claim these refunds.
Filing Assistance: Companies concentrating on ERC filings will prepare and submit the required types and documents on your behalf. This includes completing Type 941 or any other necessary tax return.
Compliance and Updates: ERC policies and assistance have developed gradually. These business remain updated with the most recent modifications and guarantee that your filings adhere to the most current standards. If the IRS demands extra details or conducts an audit associated to your ERC claim, they can likewise provide continuous support.
It is essential to research study and vet any company providing ERC filing support to guarantee their trustworthiness and competence. Try to find recognized firms with experience in tax and payroll services, or consider connecting to trusted accounting companies or tax experts who use ERC submitting assistance.
Remember that while these companies can provide important help, it’s constantly a good concept to have a fundamental understanding of the ERC requirements and process yourself. This will assist you make notified choices and make sure accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief procedures. The objective of the ERC is to encourage services to retain and pay their employees throughout the pandemic, even if their operations have actually been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to qualified companies, including for-profit organizations, tax-exempt organizations, and certain governmental entities. To certify, employers should meet one of two requirements:.
The business operations were completely or partly suspended due to a government order related to COVID-19.
The business experienced a significant decline in gross receipts. As discussed earlier, for 2021, a significant decline is specified as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decline in gross receipts compared to the exact 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 amounts to a portion (up to 70%) of certified incomes paid to employees, consisting of particular health insurance costs. The maximum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, services that received an Income Defense Program (PPP) loan were not eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 enables businesses to claim the ERC even if they got a PPP loan. The very same earnings can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively broadened and improved, permitting qualified employers to claim the credit for qualified wages paid as far back as March 13, 2020. This retroactive arrangement provides an opportunity for companies to amend prior-year income tax return and receive refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their work tax returns, usually Type 941. The excess can be reimbursed to the employer if the credit exceeds the amount of employment taxes owed.
It’s important to keep in mind that the ERC provisions and eligibility requirements have actually developed with time. The best course of action is to speak with a tax expert or go to the main internal revenue service site for the most updated and detailed information concerning the ERC, including any current legal changes or updates.
To get approved for the ERC, a service must satisfy among the following requirements:.
The business operations were fully or partially suspended due to a federal government order related to COVID-19.
Business experienced a considerable decline in gross receipts. For 2021, a considerable decrease is specified as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decline in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
The ERC is offered to organizations of all sizes, including tax-exempt companies, but there are some exceptions. For instance, federal government entities and organizations that got a PPP loan might have restrictions on declaring the credit.
The procedure for claiming the ERC involves completing the required types and including the credit on your work income tax return (generally Type 941). The exact time it requires to process the credit can vary based on a number of aspects, consisting of the intricacy of your business and the workload of the IRS. It’s suggested to seek advice from a tax expert for guidance specific to your situation.
There are several companies that can help with the procedure of declaring the ERC. These consist of accounting companies, tax advisory services, and payroll provider. Some popular business that use help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research study and contact these companies straight to ask about their costs and services.
Please note that the information provided here is based on general knowledge and might not reflect the most current updates or modifications to the ERC. It is very important to talk to a tax professional or check out the official internal revenue service site for the most current and precise information relating to eligibility, declaring treatments, and offered help.
Less than 100. If the employer had 100 or fewer employees on average in 2019, then the credit is based.
on earnings paid to all staff members whether they in fact worked or not. In other words, even if the.
employees worked full-time and earned money for full time work, the employer still gets the credit.
Greater than 100. If the company had more than 100 workers on average in 2019, then the credit is.
permitted only for salaries paid to workers who did not work during the calendar quarter.
In both cases, “salaries” consists of not just cash payments but likewise a part of the expense of employer.
supplied health care. Erc Employee Retention Credit
Companies can be right away repaid for the credit by decreasing the amount of payroll taxes they.