Lets talk first about How Are Employee Retention Credit Paid Out :
Our team here what do these people doing everybody in this space is assisting teach individuals about ERC and uh always provide a beautiful breakfast and have individuals truly find out about the program we should 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 numerous countless dollars literally Kevin numerous millions of dollars so these are replicate copies of the letters that go to customers verifying that the check is on the way I imply you understand if you just begin to take a look at some of these here I mean this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s simply I imply 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 confirmed 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 understand when you
get this you know the check is gone for sure and that’s when they pay so they don’t pay anything until they in fact receive the cash they do not pay bottom line Wonder trust anything till this letter is validated the check is on the way they deposit it into their checking account and they can truly trust Wonder trust that the process has been completed and the number of you think you have actually processed considering that you started this we’re about 35 000 of these for
about 6 billion dollars wow so clearly they understand what they’re doing which’s what you need you require 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 Fantastic here you’re at my YouTube channel we’re talking about something truly crucial today the employee retention credit which most of you have actually never heard of I definitely hadn’t become aware of it until very recently and learned a lot about it since this is probably the lowest expense of capital for any small company anywhere
anytime if you have workers in between five and five hundred so I’ve got the professional with me this is Josh Fox he’s the creator and CEO of bottom line Ideas 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 simply phone your bank supervisor 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 all of us about it and how to get it and why I have actually become yes the Ambassador and paid representative for this I like this program it’s going away very soon you got to find out 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 came up with the cares Act and the cares act used businesses three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody 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.
remedy the cash cash payroll tax refund okay go on sorry I simply have to ensure we got that point I mean that’s a huge difference a loan versus money cash I like money cash that’s what we’re discussing 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 original cares Act is the ERC and yes Kevin it is a beautiful hard check in the mail where you get real cash from the internal revenue service all right so let’s discuss how it works because it sounds like to me if it’s a if it’s worker retention credit that individual had 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 investors it’s for workers right you had to have actually owned a service however it’s based on you having W-2 employees in America not 10.99. As long as you had W-2 staff members 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 first 6 months of 2021 on the W-2 appropriate 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 two and three of 2021. okay so that’s how it’s determined you need to be on the W-2 during that period now let’s talk my preferred part money just how much can you return per staff member that was on a W-2 in those 6 quarters so the computation in 2020 to be specific Kevin is 50 of the staff member’s wage to a maximum of 5 thousand dollars per staff member for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s wage to an optimum of 7 thousand per quarter how did that occur um they simply changed the rules in.
2021 versus since the chaos of the pandemic so they wanted to even get more to keep those employees 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 6 thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty 6 thousand dollars per employee that is because that’s a great deal of money it is now there’s a caveat here the PPP money would have to be decreased from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would minimize the 26 000 so what we’re seeing usually Kevin is if you took PPP money somewhere around 10 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 workers and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s big undoubtedly now the huge question is why does nobody learn about this since appearance when I first became aware of this when I initially met Josh you know I’ve got lots of financial investments in great deals of companies I’m a significant supporter for entrepreneurship in America and make many numerous investments in business owners of which numerous suffered through the pandemic when I initially heard about this I called BS I do not believe it because I use 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 should have and we used them carefully to stay alive during the pandemic so when I found out about this I said nah it can’t hold true but when I dug around I even called to my politician good friends Governor Senators they didn’t understand about it I imply that’s how you understand that’s how misinformation is that there’s no information out there then a lot of individuals told me well you can’t get it since you took the PPP likewise not true so let’s ask Josh why does no one learn about the employee retention credit you understand what’s intriguing you’re discussing the banks Kevin due to the fact that in the PPP loan process the federal government made it extremely 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 just process procedure that’s all um and here there was chaos due to the fact that keep in mind in the original cares act you could not do both programs so if you had actually 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 since it’s not alone so you’re getting a tax refund so the government never made it clear to anyone about how to.
do this does your CFO know how to do this not actually he or she’s never ever done it previously do the banks do it nope the banks do not do it the payroll business 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 went into this service and bottom line my firm Kevin has been in business considering 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 huge business clients have actually dealt with bottom line to recover other federal government programs we have actually 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 government programs.
The employee retention tax credit is a broad based refundable tax credit developed to encourage.
employers to keep workers on their payroll. The credit is 50% of approximately $10,000 in incomes paid by an.
company whose business is totally or partly suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
1. The credit is readily available to all companies regardless of size consisting of tax exempt organizations. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
companies who take Small company Loans.
2. To certify, the employer needs to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s business is fully or partly suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are listed below 50% of the comparable quarter in 2019. Once the.
company’s gross receipts go above 80% of a similar quarter in 2019 they no longer certify.
after completion of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the qualifying incomes paid up to $10,000 in total.
It is effective for salaries paid after March 13th and prior to December 31, 2020.
The definition of qualifying incomes varies by whether a company had, typically, more or less than.
100 staff members in 2019.
Business that focus on ERC filing support usually provide knowledge and support to help organizations navigate the intricate procedure of declaring the credit. They can provide numerous services, including:.
How is the employee retention credit calculated? How Are Employee Retention Credit Paid Out
Eligibility Assessment: These business will examine your company’s eligibility for the ERC based upon aspects such as your market, revenue, and operations. If you satisfy the requirements for the credit and determine the maximum credit amount you can declare, they can assist identify.
Documentation and Calculation: ERC filing services will help in collecting the necessary documents, such as payroll records and financial statements, to support your claim. They will also assist determine the credit amount based on qualified salaries and other certifying expenditures.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for prior quarters, these companies can review your previous payroll records and financials to identify prospective opportunities for retroactive credits. They can help you amend prior income tax return to declare these refunds.
Filing Assistance: Business concentrating on ERC filings will prepare and send the essential kinds and documentation in your place. This includes completing Type 941 or any other required tax return.
Compliance and Updates: ERC regulations and guidance have actually evolved in time. These companies remain updated with the latest changes and guarantee that your filings abide by the most present standards. They can likewise provide continuous support if the IRS demands additional information or conducts an audit related to your ERC claim.
It is necessary to research and vet any company offering ERC filing support to guarantee their reliability 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 filing assistance.
Remember that while these companies can offer valuable assistance, it’s always an excellent concept to have a fundamental understanding of the ERC requirements and procedure yourself. This will assist you make notified decisions and make sure 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 measures. The objective of the ERC is to encourage companies to retain and pay their workers throughout the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to eligible companies, consisting of for-profit organizations, tax-exempt companies, and certain governmental entities. To certify, companies should meet one of two criteria:.
The business operations were totally or partially suspended due to a federal government order related to COVID-19.
The business experienced a substantial decrease in gross invoices. As mentioned previously, for 2021, a significant decline is specified as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a substantial decline is specified as a 20% decline in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the right away 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 portion (approximately 70%) of qualified salaries paid to staff members, consisting of specific health insurance expenses. The optimum 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 got a Paycheck Security Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 allows companies to declare the ERC even if they received a PPP loan. The very same earnings can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and improved, enabling eligible companies to declare the credit for certified earnings paid as far back as March 13, 2020. This retroactive arrangement provides a chance for organizations to modify prior-year income tax return and receive refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their employment tax returns, generally Kind 941. If the credit surpasses the quantity of work taxes owed, the excess can be refunded to the company.
It is essential to keep in mind that the ERC arrangements and eligibility requirements have actually progressed in time. The very best course of action is to speak with a tax expert or check out the official IRS website for the most up-to-date and in-depth information relating to the ERC, including any recent legal changes or updates.
To receive the ERC, a business must meet one of the following criteria:.
Business operations were fully or partly suspended due to a government order related to COVID-19.
The business experienced a considerable decrease in gross invoices. For 2021, a significant decrease is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a significant decline is defined 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 right away preceding quarter.
The ERC is readily available to companies of all sizes, including tax-exempt companies, however there are some exceptions. For example, federal government entities and services that got a PPP loan may have restrictions on declaring the credit.
The process for claiming the ERC involves completing the needed types and including the credit on your work income tax return (typically Type 941). The exact time it requires to process the credit can vary based on a number of aspects, including the complexity of your service and the work of the internal revenue service. It’s advised to seek advice from a tax professional for assistance specific to your scenario.
There are a number of business that can help with the process of claiming the ERC. Some widely known business that use help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the details provided here is based on basic knowledge and may not reflect the most recent updates or modifications to the ERC. It is very important to talk to a tax expert or check out the main IRS site for the most accurate and current details concerning eligibility, claiming treatments, and readily available help.
Less than 100. If the company had 100 or fewer workers typically in 2019, then the credit is based.
on earnings paid to all employees whether they really worked or not. To put it simply, even if the.
employees worked full-time and made money for full time work, the company still gets the credit.
Greater than 100. If the company had more than 100 employees typically in 2019, then the credit is.
permitted just for salaries paid to workers who did not work throughout the calendar quarter.
In both cases, “earnings” includes not just cash payments however also a part of the expense of company.
offered health care. How Are Employee Retention Credit Paid Out
Companies can be right away compensated for the credit by minimizing the amount of payroll taxes they.