Lets talk first about Form 7200 Employee Retention Credit :
Our group here what do these people doing everybody in this room is assisting teach individuals about ERC and uh constantly provide a stunning breakfast and have people truly learn more about the program we should head to the space where we have the ability to display a few of the checks that we are getting for business and I wish to see that what is this this is uh hundreds of millions of dollars literally Kevin hundreds of millions of dollars so these are duplicate copies of the letters that go to clients verifying that the check is on the method I suggest you know if you simply begin to look at some of these here I suggest this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I mean it’s just I imply think about 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 confirmed 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
get this you understand the check is opted for sure and that’s when they pay so they don’t pay anything till they in fact receive the money they don’t pay bottom line Wonder trust anything until this letter is confirmed the check is on the method they deposit it into their savings account and they can really rely on Wonder trust that the process has been ended up and the number of you think you have actually processed given that you started this we have to do with 35 000 of these for
about 6 billion dollars wow so clearly they understand 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 one of these that’s what matters all right Mr Wonderful here you’re at my YouTube channel we’re talking about something truly important today the staff member retention credit which most of you have actually never become aware of I certainly had not heard of it until really recently and learned a lot about it because this is probably the lowest cost of capital for any small company anywhere
anytime if you have workers in between 5 and five hundred so I have actually got the professional with me this is Josh Fox he’s the founder and CEO of bottom line Principles they’re the largest processor of these ERC credits this is a 170 page program so it’s hard this isn’t like PPP we simply call your bank supervisor and state offer 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 become yes the Ambassador and paid spokesperson for this I love this program it’s going away very soon you got to discover everything about it let’s talk worker retention credit Josh Fox what is an ERC let’s just begin there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act used services three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everybody it makes a big difference right there two 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 okay go on sorry I simply have to make sure we got that point I mean that’s a huge difference a loan versus cash money I like money cash that’s what we’re speaking 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 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 internal revenue service all right so let’s speak about how it works since it sounds like to me if it’s a if it’s worker retention credit that individual had to be an employee 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 employees right you had to have actually owned a business but it’s based upon you having W-2 employees 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 qualified so you need to be on payroll in 2020 on the W-2 and you have to be on payroll for the first six months of 2021 on the W-2 correct so there were six quarters the program was open well walk us through the 6 quarters so you had quarters 2 three and four of 2020 and you had quarters one 2 and 3 of 2021. fine 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 calculation in 2020 to be specific Kevin is 50 of the worker’s salary to a maximum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the worker’s wage to a maximum of 7 thousand per quarter how did that occur um they simply altered the rules in.
2021 versus because the chaos 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 as much as 5 thousand Max and then what happens 21 000 Max in 2021 oh that’s how you create twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty six thousand dollars per employee that is since that’s a lot of money it is now there’s a caution here the PPP money would have to be reduced 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 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 cash you would still get a million dollar in the mail from the IRS so it’s huge undoubtedly now the big concern is why does no one know about this due to the fact that look when I first found out about this when I initially met Josh you know I have actually got great deals of investments in lots of business I’m a significant advocate for entrepreneurship in America and make numerous numerous investments in entrepreneurs of which many suffered through the pandemic when I initially heard about this I called BS I don’t think it because I use the PPP we went through the money 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 been worthy of and we used them wisely to survive throughout the pandemic so when I found out about this I stated nah it can’t be true however when I dug around I even called to my political leader good friends Governor Senators they didn’t understand about it I suggest that’s how you know that’s how misinformation is that there’s no information out there then a lot of people told me well you can’t get it because you took the PPP also not real so let’s ask Josh why does nobody know about the worker retention credit you know what’s interesting you’re speaking about the banks Kevin since 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 huge 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 procedure procedure that’s all um and here there was turmoil since keep in mind in the original cares act you might not do both programs so if you had done PPP you could refrain from doing ERC in the original program and when they altered the law in 2021 the banks were not doing ERC because it’s not alone so you’re getting a tax refund so the federal government never made it clear to any person about how to.
do this does your CFO know how to do this not actually he or she’s never ever done it in the past do the banks do it nope the banks don’t do it the payroll business 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 business and bottom line my firm Kevin has actually been in business given that 2009 and we’ve been dealing with the federal government and the state government to recuperate money for Fortune 500 Fortune 1000 business so a great deal of our big big corporate customers have actually dealt with bottom line to recover other federal government programs we have actually done sales tax and use tax unemployment tax work opportunity tax credits research and development tax credits unclaimed home property tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit created to encourage.
companies to keep employees on their payroll. The credit is 50% of approximately $10,000 in incomes paid by an.
Since of COVID-19 or whose gross invoices, company whose service is totally or partly suspended.
decrease by more than 50%.
1. The credit is available to all employers no matter size consisting of tax exempt companies. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) small.
services who take Small Business Loans.
2. To certify, the company has to satisfy one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s service is fully or partially suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross receipts are listed below 50% of the equivalent quarter in 2019. As soon as the.
employer’s gross invoices go above 80% of a similar quarter in 2019 they no longer certify.
after completion of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the certifying earnings paid up to $10,000 in overall.
It works for earnings paid after March 13th and prior to December 31, 2020.
The meaning of certifying earnings varies by whether a company had, usually, basically than.
100 staff members in 2019.
Business that specialize in ERC filing support generally offer competence and assistance to help organizations navigate the complex procedure of claiming the credit. They can offer various services, including:.
How is the employee retention credit calculated? Form 7200 Employee Retention Credit
Eligibility Assessment: These companies will examine your service’s eligibility for the ERC based on aspects such as your industry, earnings, and operations. They can assist identify if you satisfy the requirements for the credit and determine the maximum credit quantity you can declare.
Paperwork and Estimation: ERC filing services will help in gathering the required paperwork, such as payroll records and monetary declarations, to support your claim. They will also assist calculate the credit amount based upon qualified earnings and other certifying costs.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for previous quarters, these companies can review your past payroll records and financials to identify possible opportunities for retroactive credits. They can assist you amend prior income tax return to declare these refunds.
Filing Assistance: Business concentrating on ERC filings will prepare and send the needed types and documents in your place. This consists of completing Type 941 or any other required tax forms.
Compliance and Updates: ERC regulations and guidance have developed gradually. These companies remain upgraded with the latest modifications and make sure that your filings abide by the most current standards. If the Internal revenue service requests extra information or performs an audit related to your ERC claim, they can also provide ongoing assistance.
It’s important to research study and veterinarian any business providing ERC filing assistance to guarantee their reliability and proficiency. Search for recognized companies with experience in tax and payroll services, or consider connecting to relied on accounting firms or tax specialists who offer ERC submitting support.
Remember that while these companies can provide valuable support, it’s always an excellent idea to have a standard understanding of the ERC requirements and procedure yourself. This will assist you make informed choices and ensure precise filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief steps. The goal of the ERC is to motivate organizations to retain and pay their staff members throughout the pandemic, even if their operations have actually been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to eligible employers, consisting of for-profit companies, tax-exempt companies, and particular governmental entities. To certify, companies need to satisfy one of two criteria:.
Business operations were completely or partly suspended due to a government order related to COVID-19.
Business experienced a substantial decline in gross receipts. As discussed earlier, for 2021, a considerable decline 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 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 company’s share of Social Security taxes. The credit amount amounts to a portion (approximately 70%) of certified salaries paid to workers, including certain health insurance expenses. The maximum credit per staff member is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, services that got an Income Security Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 permits organizations to declare the ERC even if they got a PPP loan. The exact same earnings can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and enhanced, enabling qualified companies to declare the credit for qualified earnings paid as far back as March 13, 2020. This retroactive arrangement supplies an opportunity for services to modify prior-year tax returns and get refunds.
Claiming the Credit: Companies can declare the ERC by reporting it on their work tax returns, generally Type 941. If the credit surpasses the amount of work taxes owed, the excess can be refunded to the company.
It’s important to keep in mind that the ERC provisions and eligibility requirements have actually progressed gradually. The best course of action is to talk to a tax professional or visit the official IRS website for the most comprehensive and updated details concerning the ERC, including any recent legal modifications or updates.
To receive the ERC, a company must satisfy one of the following requirements:.
The business operations were completely or partly suspended due to a federal government order related to COVID-19.
The business experienced a significant decrease in gross invoices. For 2021, a substantial decline is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decline in gross invoices compared to the instantly preceding quarter.
The ERC is available to companies of all sizes, consisting of tax-exempt organizations, but there are some exceptions. Federal government entities and services that got a PPP loan may have limitations on declaring the credit.
The procedure for claiming the ERC includes completing the essential forms and including the credit on your work tax return (usually Kind 941). The exact time it requires to process the credit can differ based upon several factors, including the complexity of your company and the workload of the internal revenue service. It’s recommended to speak with a tax expert for guidance particular to your circumstance.
There are a number of companies that can help with the procedure of claiming the ERC. Some widely known business that offer support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the info supplied here is based upon general understanding and might not show the most recent updates or changes to the ERC. It is essential to consult with a tax professional or check out the official IRS site for the most updated and precise info concerning eligibility, declaring procedures, and readily available help.
Less than 100. If the employer had 100 or less workers usually 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.
staff members 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 just for incomes paid to workers who did not work during the calendar quarter.
In both cases, “wages” includes not just cash payments however also a part of the cost of company.
offered health care. Form 7200 Employee Retention Credit
Employers can be instantly reimbursed for the credit by minimizing the amount of payroll taxes they.