Lets talk first about Extended Employee Retention Credit :
Our team here what do these guys doing everybody in this room is assisting teach people about ERC and uh always supply a gorgeous breakfast and have individuals actually learn about the program we must head to the room where we are able to display some of the checks that we are getting for companies and I want to see that what is this this is uh hundreds of countless dollars actually Kevin hundreds of countless dollars so these are duplicate copies of the letters that go to clients validating that the check is on the way I suggest you understand if you just begin 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 imply it’s just I suggest consider how many real clients 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 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 understand the check is chosen sure which’s when they pay so they don’t pay anything up until they actually receive the cash they don’t pay bottom line Wonder trust anything until this letter is validated the check is on the way they transfer it into their savings account and they can genuinely rely on Wonder trust that the process has actually been ended up and the number of you think you’ve processed considering that you began this we’re about 35 000 of these for
about 6 billion dollars wow so clearly they know what they’re doing and that’s what you require you need professionals 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 Fantastic here you’re at my YouTube channel we’re speaking about something actually crucial today the staff member retention credit which the majority of you have actually never heard of I certainly hadn’t heard of it till extremely just recently and learned a lot about it because this is probably the lowest expense of capital for any small business anywhere
anytime if you have staff members 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 Concepts they’re the largest 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 supervisor and say provide me a loan it does not 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’ve ended up being yes the Ambassador and paid representative for this I love this program it’s going away soon you got to learn everything about it let’s talk employee retention credit Josh Fox what is an ERC let’s just start there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act used companies 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 huge difference right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the money money payroll tax refund okay go on sorry I just have to make sure we got that point I imply that’s a big distinction a loan versus cash money I like cash money that’s what we’re speaking 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 gorgeous hard check in the mail where you get actual cash from the IRS all right so let’s talk about how it works since it seems like to me if it’s a if it’s employee retention credit that person needed 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 a business however it’s based on you having W-2 employees in America not 10.99. As long as you had W-2 employees 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 6 months of 2021 on the W-2 correct 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 2 and 3 of 2021. fine so that’s how it’s measured you need to be on the W-2 during 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 calculation in 2020 to be specific 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 escalated to 70 of the employee’s salary to an optimum of seven thousand per quarter how did that take place um they just altered the rules in.
2021 versus since the turmoil of the pandemic so they wished 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 after that what takes place 21 000 Max in 2021 oh that’s how you develop twenty 6 thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty 6 thousand dollars per staff member that is since that’s a great deal of money it is now there’s a caution here the PPP cash 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 typically Kevin is if you took PPP money somewhere around ten thousand dollars an individual so let’s state 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 internal revenue service so it’s huge clearly now the big question is why does no one learn about this since look when I initially heard about this when I first satisfied Josh you understand I have actually got lots of financial investments in great deals of companies I’m a major advocate for entrepreneurship in America and make many many financial investments in entrepreneurs of which numerous suffered through the pandemic when I initially heard about this I called BS I do not 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 should have and we used them sensibly to stay alive throughout the pandemic so when I found out about this I said nah it can’t hold true however when I dug around I even called to my political leader good friends Governor Senators they didn’t know about it I imply that’s how you understand that’s how misinformation is that there’s no information out there then a bunch of individuals told me well you can’t get it due to the fact that you took the PPP likewise not real so let’s ask Josh why does no one know about the staff member retention credit you know what’s fascinating you’re speaking about the banks Kevin due to the fact that in the PPP loan process 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 big banks in our country and they would process process in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply process process that’s all um and here there was mayhem because keep in mind in the original cares act you could not do both programs so if you had actually done PPP you might not do ERC in the original program and when they altered 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 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 some 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 business and bottom line my firm Kevin has been in business given that 2009 and we’ve been dealing with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 business so a lot of our huge huge business customers have worked with bottom line to recuperate other government programs we’ve done sales tax and utilize tax joblessness tax work chance tax credits research and development tax credits unclaimed home property tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit created to motivate.
companies to keep employees on their payroll. The credit is 50% of as much as $10,000 in earnings paid by an.
Since of COVID-19 or whose gross invoices, company whose business is fully or partially suspended.
decline by more than 50%.
Schedule.
1. The credit is offered to all companies regardless of size including tax exempt organizations. There are.
just 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
services 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 employer’s service is totally or partly suspended by government order due to COVID-19.
during the calendar quarter or.
o the company’s gross invoices are listed below 50% of the comparable quarter in 2019. When the.
employer’s gross invoices go above 80% of a comparable 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 earnings paid up to $10,000 in overall.
It is effective for incomes paid after March 13th and prior to December 31, 2020.
The meaning of certifying salaries differs by whether an employer had, typically, basically than.
100 workers in 2019.
Companies that concentrate on ERC filing help usually supply knowledge and assistance to assist companies navigate the complex procedure of claiming the credit. They can use different services, consisting of:.
How is the employee retention credit calculated? Extended Employee Retention Credit
Eligibility Evaluation: These business will assess your business’s eligibility for the ERC based on factors such as your market, earnings, and operations. They can help identify if you satisfy the requirements for the credit and determine the optimum credit quantity you can declare.
Documents and Estimation: ERC filing services will assist in collecting the needed documentation, such as payroll records and monetary statements, to support your claim. They will likewise assist compute the credit amount based on eligible incomes and other certifying expenditures.
Retroactive Claim Review: If you are eligible to claim the ERC for prior quarters, these companies can review your past payroll records and financials to identify prospective chances for retroactive credits. They can help you change previous tax returns to claim these refunds.
Filing Help: Companies focusing on ERC filings will prepare and send the needed forms 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 actually evolved gradually. These companies remain updated with the most recent changes and make sure that your filings abide by the most present guidelines. If the IRS demands extra details or carries out an audit related to your ERC claim, they can also offer ongoing assistance.
It is very important to research study and veterinarian any company using ERC filing help to guarantee their trustworthiness and proficiency. Try to find established companies with experience in tax and payroll services, or consider connecting to trusted accounting companies or tax specialists who provide ERC filing assistance.
Keep in mind that while these companies can provide valuable assistance, it’s always a good idea to have a basic understanding of the ERC requirements and process yourself. This will help you make informed choices and make sure accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief measures. The goal of the ERC is to motivate services to maintain and pay their employees during 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 employers, consisting of for-profit services, tax-exempt organizations, and certain governmental entities. To qualify, companies need to meet one of two requirements:.
Business operations were fully or partially suspended due to a government order related to COVID-19.
The business experienced a substantial decline in gross receipts. As mentioned 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 specified as a 20% decline in gross invoices compared to the same quarter in 2019, or a 20% decrease 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 (approximately 70%) of certified salaries paid to staff members, consisting of certain health insurance costs. The optimum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, companies that got an Income Defense Program (PPP) loan were not eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 allows services to declare the ERC even if they got a PPP loan. The exact same wages can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and improved, enabling eligible employers to declare the credit for qualified incomes paid as far back as March 13, 2020. This retroactive arrangement offers a chance for businesses to modify prior-year income tax return and receive refunds.
Declaring the Credit: Employers can declare the ERC by reporting it on their work tax returns, generally Form 941. The excess can be refunded to the employer if the credit goes beyond the amount of work taxes owed.
It is very important to keep in mind that the ERC arrangements and eligibility requirements have developed over time. The best course of action is to speak with a tax professional or go to the official IRS website for the most updated and in-depth information concerning the ERC, consisting of any current legal modifications or updates.
To get approved for the ERC, a company needs to satisfy among the following criteria:.
Business operations were completely or partly suspended due to a government order related to COVID-19.
Business experienced a considerable decline in gross receipts. For 2021, a substantial decline is specified as a 20% decline in gross receipts 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% decrease in gross invoices compared to the right away preceding quarter.
The ERC is available to businesses of all sizes, consisting of tax-exempt organizations, however there are some exceptions. Government entities and companies that received a PPP loan may have limitations on claiming the credit.
The process for claiming the ERC includes completing the essential types and consisting of the credit on your work income tax return (usually Form 941). The exact time it takes to process the credit can vary based upon several elements, consisting of the intricacy of your business and the workload of the internal revenue service. It’s recommended to speak with a tax expert for assistance specific to your circumstance.
There are several business that can help with the procedure of claiming the ERC. Some popular companies that provide support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the information supplied here is based upon basic understanding and might not show the most recent updates or changes to the ERC. It is essential to seek advice from a tax professional or go to the official internal revenue service website for the most precise and up-to-date details relating to eligibility, claiming treatments, and available assistance.
Less than 100. If the company had 100 or less staff members typically in 2019, then the credit is based.
on earnings paid to all workers whether they really worked or not. Simply put, even if the.
employees worked full-time and got paid for full-time work, the company still gets the credit.
Greater than 100. If the company had more than 100 staff members typically in 2019, then the credit is.
enabled only for earnings 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.
provided health care. Extended Employee Retention Credit
Payment.
Employers can be instantly compensated for the credit by lowering the quantity of payroll taxes they.