Lets talk first about Filing Employee Retention Credit :
Our team here what do these guys doing everyone in this room is helping teach individuals about ERC and uh always offer a lovely breakfast and have individuals actually discover 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 ‘d like to see that what is this this is uh numerous millions of dollars actually Kevin numerous millions of dollars so these are duplicate copies of the letters that go to clients validating that the check is on the method I indicate you know if you just begin to take a 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 imply it’s just I mean consider the number of actual 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 internal revenue service heading to the client so that’s how you have the ability to track it you know when you
get this you understand the check is chosen sure and that’s when they pay so they do not pay anything up until they really get the money they don’t pay bottom line Wonder trust anything up until this letter is confirmed the check is on the way they deposit it into their savings account and they can really trust Wonder trust that the procedure has actually been finished and how many you believe you have actually processed because you started 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 require 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 Wonderful here you’re at my YouTube channel we’re discussing something really essential today the worker retention credit which the majority of you have never heard of I definitely hadn’t heard of it up until very recently and discovered a lot about it since this is probably the lowest cost of capital for any small business anywhere
anytime if you have employees in between five and five hundred so I’ve got the expert with me this is Josh Fox he’s the creator and CEO of bottom line Ideas 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 simply call up 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 tell us all about it and how to get it and why I have actually ended up being yes the Ambassador and paid spokesperson for this I like this program it’s going away soon you got to discover everything about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply begin there so during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act offered services 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.
fix the money cash payroll tax refund fine go on sorry I just need to make certain we got that point I indicate that’s a big difference a loan versus money cash I like cash money 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 lovely difficult check in the mail where you get real 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 staff member retention credit that person needed to be a staff member so I’m going to make the Presumption this cash is not for the owner not for people on the cap table not for shareholders it’s for employees right you needed to have owned a company but it’s based on you having W-2 staff members 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 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 six 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 two 3 and four of 2020 and you had quarters one two and three of 2021. fine so that’s how it’s determined you need to be on the W-2 throughout that period now let’s talk my favorite part money just how much can you get back 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 worker’s income to a maximum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers escalated to 70 of the staff member’s salary to an optimum of 7 thousand per quarter how did that happen um they simply changed the rules in.
2021 versus since the turmoil of the pandemic so they wanted 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 five thousand Max and after that what occurs 21 000 Max in 2021 oh that’s how you develop twenty six 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 because that’s a lot of cash it is now there’s a caveat 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 on average Kevin is if you took PPP money somewhere around ten thousand dollars an individual so let’s state hypothetically you owned a restaurant in New York 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 IRS so it’s big clearly now the big question is why does nobody learn about this because appearance when I initially found out about this when I initially fulfilled Josh you know I’ve got great deals of financial investments in great deals of business I’m a significant advocate for entrepreneurship in America and make many numerous investments in entrepreneurs of which numerous suffered through the pandemic when I initially found out about this I called BS I don’t think it because 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 and that were well been worthy of and we used them wisely to survive during the pandemic so when I heard about this I stated nah it can’t be true but when I dug around I even contacted us to my politician pals Governor Senators they didn’t know about it I suggest that’s how you know that’s how false information is that there’s no information out there then a bunch of individuals 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 worker retention credit you understand what’s intriguing you’re talking about the banks Kevin due to the fact that 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 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 simply process procedure that’s all um and here there was chaos due to the fact that remember in the original cares act you might refrain from doing both programs so if you had done PPP you could not do ERC in the initial program and when they altered the law in 2021 the banks were not doing ERC due to the fact that it’s not alone so you’re getting a tax refund so the federal government never made it clear to anyone about how to.
do this does your CFO know how to do this not really she or he’s never ever done it in the past do the banks do it nope the banks do not do it the payroll business yeah a few of them are doing it as a payroll company your accountant no your accountant’s never done this prior to unless you have an account that went into this business and bottom line my firm Kevin has stayed in business given that 2009 and we’ve been working with the federal government and the state government to recover money for Fortune 500 Fortune 1000 business so a lot of our big huge business clients have actually dealt with bottom line to recover other federal government programs we have actually done sales tax and utilize tax unemployment tax work opportunity tax credits research and development tax credits unclaimed home property tax all of these other federal government programs.
The staff member retention tax credit is a broad based refundable tax credit designed to encourage.
companies to keep employees on their payroll. The credit is 50% of as much as $10,000 in salaries paid by an.
company whose business is completely or partly suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
Availability.
1. The credit is readily available to all employers despite size consisting of tax exempt companies. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) little.
services who take Small company Loans.
2. To certify, the employer has to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s company is fully or partially suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are below 50% of the comparable quarter in 2019. As soon as the.
employer’s gross invoices exceed 80% of a similar 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 qualifying incomes paid up to $10,000 in total.
It works for incomes paid after March 13th and prior to December 31, 2020.
The meaning of qualifying salaries differs by whether an employer had, typically, basically than.
100 employees in 2019.
Business that specialize in ERC filing support normally supply knowledge and assistance to assist organizations browse the complex procedure of claiming the credit. They can provide various services, including:.
How is the employee retention credit calculated? Filing Employee Retention Credit
Eligibility Assessment: These companies will examine your service’s eligibility for the ERC based on factors such as your market, profits, and operations. If you meet the requirements for the credit and recognize the optimum credit amount you can declare, they can help figure out.
Documents and Calculation: ERC filing services will assist in collecting the needed paperwork, such as payroll records and financial statements, to support your claim. They will also help determine the credit quantity based upon qualified salaries and other certifying expenses.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for prior quarters, these companies can review your past payroll records and financials to identify possible chances for retroactive credits. They can assist you change previous income tax return to declare these refunds.
Filing Assistance: Business concentrating on ERC filings will prepare and submit the needed kinds and documentation on your behalf. This consists of completing Kind 941 or any other required tax return.
Compliance and Updates: ERC policies and guidance have evolved over time. These business remain upgraded with the current modifications and make sure that your filings adhere to the most existing standards. If the IRS demands additional details or performs an audit associated to your ERC claim, they can also offer ongoing assistance.
It is necessary to research and veterinarian any business using ERC filing assistance to guarantee their trustworthiness and expertise. Search for recognized companies with experience in tax and payroll services, or think about reaching out to relied on accounting firms or tax professionals who offer ERC submitting assistance.
Keep in mind that while these business can provide important assistance, it’s always a great concept to have a basic understanding of the ERC requirements and process yourself. This will help you make notified decisions and guarantee accurate filings.
The Worker Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief measures. The objective of the ERC is to encourage organizations to keep and pay their workers during the pandemic, even if their operations have actually been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to eligible employers, consisting of for-profit companies, tax-exempt companies, and particular governmental entities. To certify, companies must meet one of two requirements:.
Business operations were totally or partially suspended due to a federal government order related to COVID-19.
The business experienced a considerable decrease in gross invoices. As mentioned previously, for 2021, a significant decrease is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decrease is specified as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit amount amounts to a percentage (approximately 70%) of certified incomes paid to workers, consisting of certain health insurance expenses. The optimum credit per staff member is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, businesses that got a Paycheck Defense Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 allows services to declare the ERC even if they got a PPP loan. However, the exact same incomes can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively expanded and boosted, allowing qualified companies to declare the credit for certified salaries paid as far back as March 13, 2020. This retroactive arrangement supplies a chance for businesses to amend prior-year income tax return and receive refunds.
Claiming the Credit: Companies can declare the ERC by reporting it on their employment tax returns, generally Form 941. If the credit exceeds the quantity of work taxes owed, the excess can be reimbursed to the company.
It is necessary to keep in mind that the ERC arrangements and eligibility criteria have evolved over time. The best course of action is to seek advice from a tax professional or check out the official internal revenue service website for the most updated and comprehensive details concerning the ERC, including any current legislative changes or updates.
To qualify for the ERC, a service should satisfy one of the following requirements:.
Business operations were completely or partially suspended due to a federal government order related to COVID-19.
The business experienced a substantial decrease in gross receipts. For 2021, a substantial decrease is specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decline is defined as a 20% decline in gross invoices compared to the very same quarter in 2019, or a 20% decline in gross receipts compared to the right away preceding quarter.
The ERC is offered to organizations of all sizes, including tax-exempt companies, however there are some exceptions. Government entities and companies that got a PPP loan may have restrictions on declaring the credit.
The procedure for declaring the ERC includes completing the required forms and including the credit on your work tax return (normally Kind 941). The exact time it takes to process the credit can differ based upon several aspects, including the intricacy of your business and the workload of the IRS. It’s suggested to seek advice from a tax expert for assistance particular to your scenario.
There are a number of business that can assist with the procedure of claiming the ERC. These include 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 and get in touch with these companies straight to inquire about their costs and services.
Please keep in mind that the details offered here is based on basic knowledge and may not reflect the most current updates or modifications to the ERC. It’s important to seek advice from a tax expert or visit the official IRS site for the most updated and precise info relating to eligibility, declaring treatments, and available support.
Less than 100. If the company had 100 or less staff members typically in 2019, then the credit is based.
on salaries paid to all workers whether they really worked or not. In other words, even if the.
staff members 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 typically in 2019, then the credit is.
allowed only for salaries paid to employees who did not work during the calendar quarter.
In both cases, “salaries” consists of not just money payments but likewise a portion of the cost of company.
supplied healthcare. Filing Employee Retention Credit
Payment.
Employers can be right away reimbursed for the credit by decreasing the quantity of payroll taxes they.