Lets talk first about Expanded Employee Retention Credit :
Our team here what do these men doing everyone in this room is helping teach individuals about ERC and uh constantly provide a gorgeous breakfast and have individuals really learn more about the program we ought to head to the space where we are able to display a few 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 millions of dollars so these are duplicate copies of the letters that go to customers verifying that the check is on the way I suggest you understand if you just start to look at a few of these here I imply 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 real customers that went through the program yeah this is the very end this is the celebration at the end when the check is validated the numbers are validated and the check is on the mail in the mail from the IRS heading to the customer so that’s how you have the ability to track it you know when you
receive this you know the check is gone for sure and that’s when they pay so they don’t pay anything until they actually receive the money they don’t pay bottom line Wonder trust anything until this letter is validated the check is on the method they transfer it into their bank account and they can genuinely rely on Wonder trust that the process has been ended up and how many you believe you have actually processed because you began this we have to do with 35 000 of these for
about six billion dollars wow so clearly they know what they’re doing and that’s what you need you need experts 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 Terrific here you’re at my YouTube channel we’re discussing something really crucial today the employee retention credit which most of you have never ever become aware of I certainly hadn’t heard of it until really recently and discovered a lot about it because this is most likely the most affordable cost of capital for any small business anywhere
anytime if you have employees between 5 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 Principles they’re the biggest processor of these ERC credits this is a 170 page program so it’s not easy this isn’t like PPP we just contact your bank supervisor and say offer 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’ve become yes the Ambassador and paid spokesperson for this I love this program it’s disappearing soon you got to learn all about it let’s talk worker retention credit Josh Fox what is an ERC let’s simply begin there so throughout the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act provided organizations 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everybody 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.
remedy the cash cash payroll tax refund fine go on sorry I simply have to make certain we got that point I imply that’s a huge difference a loan versus money cash I like cash cash that’s what we’re talking 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 actual money from the IRS all right so let’s speak about how it works because it sounds like to me if it’s a if it’s staff member retention credit that person had to be a worker so I’m going to make the Assumption this money is not for the owner not for individuals on the cap table not for investors it’s for staff members right you needed to have actually owned an organization but it’s based on you having W-2 staff members in America not 10.99. so as long as you had W-2 employees 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 have to be on payroll for the first 6 months of 2021 on the W-2 proper 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 2 and three of 2021. all right so that’s how it’s determined you have to be on the W-2 during that duration now let’s talk my favorite part cash just how much can you get back per staff member that was on a W-2 in those 6 quarters so the calculation in 2020 to be precise Kevin is 50 of the staff member’s income 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 employee’s wage to an optimum of seven thousand per quarter how did that occur um they just 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 staff members 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 takes place 21 000 Max in 2021 oh that’s how you come up with twenty 6 thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty 6 thousand dollars per worker 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 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 typically Kevin is if you took PPP money somewhere around ten thousand dollars an individual so let’s say hypothetically you owned a dining establishment in New York 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 substantial obviously now the huge question is why does nobody understand about this because appearance when I first heard about this when I first satisfied Josh you understand I have actually got great deals of financial investments in great deals of business I’m a significant supporter for entrepreneurship in America and make lots of many investments in entrepreneurs of which many suffered through the pandemic when I initially found out about this I called BS I don’t think 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 which were well deserved and we used them sensibly to stay alive during the pandemic so when I found out about this I stated nah it can’t be true but when I dug around I even contacted us to my political leader friends Guv Senators they didn’t learn about it I indicate that’s how you know that’s how false information is that there’s no details out there then a lot of individuals informed me well you can’t get it because you took the PPP also not true so let’s ask Josh why does no one know about the employee retention credit you understand what’s intriguing you’re speaking about the banks Kevin because 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 nation 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 chaos due to the fact that 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 not doing ERC since it’s not alone so you’re getting a tax refund so the government never made it clear to anybody 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 don’t do it the payroll companies yeah some of them are doing it as a payroll business your accounting professional no your accounting professional’s never done this before unless you have an account that entered into this company and bottom line my firm Kevin has actually stayed in business since 2009 and we’ve been working with the federal government and the state government to recover money for Fortune 500 Fortune 1000 companies so a lot of our big big business clients have worked with bottom line to recover other government programs we have actually done sales tax and utilize tax joblessness tax work opportunity tax credits research and development tax credits unclaimed property real estate tax all of these other federal 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 incomes paid by an.
Because of COVID-19 or whose gross invoices, company whose organization is totally or partially suspended.
decline by more than 50%.
1. The credit is available to all companies despite size including tax exempt organizations. There are.
just 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
organizations who take Small Business Loans.
2. To qualify, the employer has to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s company is totally or partially suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross receipts are below 50% of the comparable quarter in 2019. When the.
employer’s gross invoices go above 80% of an equivalent quarter in 2019 they no longer qualify.
after the end of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the qualifying incomes paid up to $10,000 in overall.
It is effective for wages paid after March 13th and before December 31, 2020.
The definition of certifying wages varies by whether a company had, typically, more or less than.
100 employees in 2019.
Business that focus on ERC filing support typically provide proficiency and support to assist organizations navigate the complicated procedure of declaring the credit. They can offer numerous services, including:.
How is the employee retention credit calculated? Expanded Employee Retention Credit
Eligibility Assessment: These companies will examine your business’s eligibility for the ERC based upon aspects such as your industry, revenue, and operations. If you fulfill the requirements for the credit and identify the optimum credit amount you can claim, they can assist identify.
Documents and Estimation: ERC filing services will help in gathering the necessary documentation, such as payroll records and monetary statements, to support your claim. They will also assist calculate the credit quantity based upon qualified wages and other certifying expenses.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for previous quarters, these companies can examine your past payroll records and financials to identify potential chances for retroactive credits. They can help you amend previous tax returns to declare these refunds.
Filing Assistance: Companies concentrating on ERC filings will prepare and submit the needed forms and documentation in your place. This includes completing Form 941 or any other necessary tax return.
Compliance and Updates: ERC guidelines and guidance have actually developed over time. These business stay updated with the current modifications and ensure that your filings abide by the most present standards. If the IRS demands extra details or carries out an audit associated to your ERC claim, they can likewise offer ongoing support.
It is necessary to research and vet any company using ERC filing help to guarantee their credibility and expertise. Search for recognized firms with experience in tax and payroll services, or consider reaching out to relied on accounting companies or tax professionals who use ERC filing assistance.
Keep in mind that while these companies can offer important help, it’s constantly a good concept to have a basic understanding of the ERC requirements and process yourself. This will assist you make informed decisions and guarantee precise filings.
The Worker Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief measures. The goal of the ERC is to encourage businesses to maintain and pay their staff members throughout the pandemic, even if their operations have actually been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is available to eligible companies, including for-profit companies, tax-exempt organizations, and specific governmental entities. To qualify, companies should fulfill one of two requirements:.
Business operations were totally or partially suspended due to a government order related to COVID-19.
Business experienced a considerable decrease in gross invoices. As discussed earlier, 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 defined as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decline in gross receipts compared to the immediately 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 percentage (as much as 70%) of qualified wages paid to staff members, including certain health insurance expenditures. 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, organizations that got a Paycheck Protection Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 permits businesses to declare the ERC even if they got a PPP loan. The same earnings can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively broadened and enhanced, enabling eligible companies to claim the credit for certified earnings paid as far back as March 13, 2020. This retroactive provision supplies a chance for services to change prior-year income tax return and get refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their employment tax returns, normally Kind 941. The excess can be reimbursed to the company if the credit goes beyond the amount of work taxes owed.
It’s important to keep in mind that the ERC arrangements and eligibility criteria have actually evolved gradually. The very best course of action is to seek advice from a tax professional or check out the official IRS website for the most current and in-depth information concerning the ERC, including any current legislative modifications or updates.
To receive the ERC, a company should satisfy among the following criteria:.
The business operations were totally or partly suspended due to a government order related to COVID-19.
Business experienced a substantial decrease in gross invoices. For 2021, a considerable decrease is specified as a 20% decline in gross invoices 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% decrease in gross receipts compared to the immediately preceding quarter.
The ERC is offered to organizations of all sizes, consisting of tax-exempt organizations, but there are some exceptions. Federal government entities and organizations that got a PPP loan might have constraints on claiming the credit.
The procedure for declaring the ERC involves completing the necessary kinds and including the credit on your employment tax return (usually Kind 941). The exact time it takes to process the credit can differ based upon a number of elements, including the complexity of your organization and the workload of the internal revenue service. It’s suggested to speak with a tax expert for guidance particular to your circumstance.
There are numerous companies that can aid with the process of declaring the ERC. These include accounting firms, tax advisory services, and payroll service providers. Some popular companies that use assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research study and contact these companies straight to ask about their fees and services.
Please keep in mind that the info offered here is based on basic knowledge and may not reflect the most recent updates or modifications to the ERC. It is essential to seek advice from a tax expert or go to the main internal revenue service site for the most up-to-date and accurate information regarding eligibility, claiming procedures, and readily available assistance.
Less than 100. The credit is based if the company had 100 or fewer workers on average in 2019.
on wages paid to all workers whether they really worked or not. Simply put, even if the.
workers worked full time and earned money for full-time work, the company still gets the credit.
Greater than 100. The credit is if the employer had more than 100 workers on average in 2019.
enabled only for wages paid to employees who did not work during the calendar quarter.
In both cases, “wages” consists of not just cash payments but likewise a part of the expense of company.
supplied healthcare. Expanded Employee Retention Credit
Employers can be instantly reimbursed for the credit by decreasing the amount of payroll taxes they.