Lets talk first about How Do I Calculate My Employee Retention Credit :
Our team here what do these men doing everybody in this room is helping teach individuals about ERC and uh constantly provide a beautiful breakfast and have individuals really discover the program we should head to the room where we have the ability to display a few of the checks that we are getting for companies and I wish to see that what is this this is uh numerous millions of dollars actually Kevin hundreds of millions of dollars so these are duplicate copies of the letters that go to clients validating that the check is on the method I imply you understand if you simply 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 simply I suggest consider the number of real customers that went through the program yeah this is the very end this is the celebration 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 have the ability to track it you know when you
receive this you understand the check is gone for sure and that’s when they pay so they do not pay anything up until they really 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 checking account and they can really rely on Wonder trust that the process has actually been ended up and how many you think you’ve processed given that you began this we have to do with 35 000 of these for
about six billion dollars wow so plainly 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 one of these that’s what matters all right Mr Terrific here you’re at my YouTube channel we’re speaking about something truly crucial today the worker retention credit which the majority of you have actually never heard of I definitely hadn’t heard of it up until extremely recently and found out a lot about it due to the fact that this is most likely the lowest cost of capital for any small business anywhere
anytime if you have staff members 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 biggest processor of these ERC credits this is a 170 page program so it’s hard this isn’t like PPP we just 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 tell 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 love this program it’s going away very soon you got to learn 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 created the cares Act and the cares act provided businesses 3 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 distinction right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the cash cash payroll tax refund all right go on sorry I just have to make sure we got that point I indicate that’s a huge difference a loan versus money money I like cash money that’s what we’re speaking 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 stunning difficult check in the mail where you get real money from the internal revenue service 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 individual had to be a staff member so I’m going to make the Assumption this cash is not for the owner not for individuals on the cap table not for shareholders it’s for employees right you had to have actually owned a company but it’s based on you having W-2 employees 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 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 right so there were 6 quarters the program was open well stroll us through the 6 quarters so you had quarters 2 three and four of 2020 and you had quarters one 2 and three of 2021. all right so that’s how it’s measured you need to be on the W-2 during that period now let’s talk my preferred part cash just how much can you return per employee that was on a W-2 in those six quarters so the calculation in 2020 to be specific Kevin is 50 of the staff member’s salary to an optimum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s income to a maximum of 7 thousand per quarter how did that happen um they simply altered 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 up to five thousand Max and then 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 six thousand dollars per staff member that is because that’s a great deal of cash it is now there’s a caveat here the PPP money would need to be lowered 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 someplace 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 staff members and you took PPP cash you would still get a million dollar in the mail from the IRS so it’s huge clearly now the huge concern is why does nobody learn about this because look when I first found out about this when I first satisfied Josh you know I’ve got lots of investments in lots of business I’m a major supporter for entrepreneurship in America and make many numerous financial investments in business owners of which numerous suffered through the pandemic when I first found out about this I called BS I do not believe it since I use the PPP we went through the money center Banks to get it it was extremely easy to do we had our CEOs call the banks they got their loans which were well should have and we utilized them sensibly 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 contacted us to my political leader good friends Guv Senators they didn’t learn about it I imply that’s how you understand that’s how false information is that there’s no information out there then a bunch of people informed me well you can’t get it because you took the PPP also not true so let’s ask Josh why does nobody learn about the staff member retention credit you know what’s interesting you’re talking about the banks Kevin due to the fact that in the PPP loan procedure the federal government made it very 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 procedure procedure that’s all um and here there was mayhem due to the fact that keep in mind in the initial cares act you could not do both programs so if you had actually done PPP you could refrain from doing ERC in the initial program and when they changed the law in 2021 the banks were not doing ERC because it’s not alone so you’re getting a tax refund so the government never ever made it clear to anybody about how to.
do this does your CFO know how to do this not actually she or he’s never done it before 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 business your accounting professional no your accountant’s never ever done this before unless you have an account that entered into this company and bottom line my company Kevin has actually stayed in business given that 2009 and we’ve been working with the federal government and the state federal government to recover cash for Fortune 500 Fortune 1000 business so a lot of our huge big corporate clients have actually worked with bottom line to recuperate other government programs we have actually done sales tax and utilize tax unemployment tax work chance tax credits research and development tax credits unclaimed home real estate tax all of these other government programs.
The worker retention tax credit is a broad based refundable tax credit developed to motivate.
companies to keep workers on their payroll. The credit is 50% of approximately $10,000 in earnings paid by an.
Because of COVID-19 or whose gross invoices, employer whose company is completely or partially suspended.
decline by more than 50%.
Availability.
1. The credit is readily available to all employers regardless of size consisting of tax exempt companies. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) small.
organizations who take Small Business Loans.
2. To certify, the company needs to satisfy one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s business is totally or partly suspended by federal 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.
company’s gross receipts go above 80% of an equivalent 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 certifying wages paid up to $10,000 in total.
It works for earnings paid after March 13th and prior to December 31, 2020.
The definition of qualifying wages varies by whether an employer had, on average, more or less than.
100 employees in 2019.
Business that focus on ERC filing assistance usually supply know-how and assistance to help organizations browse the complicated process of claiming the credit. They can offer numerous services, consisting of:.
How is the employee retention credit calculated? How Do I Calculate My Employee Retention Credit
Eligibility Assessment: These companies will evaluate your organization’s eligibility for the ERC based upon aspects such as your industry, income, and operations. If you meet the requirements for the credit and recognize the maximum credit amount you can declare, they can assist figure out.
Documentation and Estimation: ERC filing services will help in gathering the needed paperwork, such as payroll records and financial statements, to support your claim. They will likewise help calculate the credit amount based on eligible earnings and other qualifying expenses.
Retroactive Claim Review: If you are qualified to claim the ERC for previous quarters, these companies can review your previous payroll records and financials to determine possible chances for retroactive credits. They can help you amend previous income tax return to declare these refunds.
Filing Help: Companies concentrating on ERC filings will prepare and submit the required forms and paperwork on your behalf. This includes finishing Type 941 or any other necessary tax forms.
Compliance and Updates: ERC guidelines and guidance have actually progressed in time. These companies remain updated with the current modifications and make sure that your filings abide by the most existing standards. They can also supply ongoing assistance if the internal revenue service demands additional info or conducts an audit related to your ERC claim.
It is essential to research study and vet any business offering ERC filing assistance to guarantee their reliability and expertise. Look for established firms with experience in tax and payroll services, or consider reaching out to relied on accounting companies or tax professionals who offer ERC submitting support.
Keep in mind that while these companies can provide important support, it’s constantly an excellent concept to have a fundamental understanding of the ERC requirements and process yourself. This will assist you make notified choices and ensure precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief measures. The goal of the ERC is to encourage organizations to keep and pay their staff members during the pandemic, even if their operations have been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is available to eligible employers, consisting of for-profit services, tax-exempt companies, and particular governmental entities. To certify, companies should fulfill one of two criteria:.
Business operations were completely or partially suspended due to a government order related to COVID-19.
The business experienced a significant decline in gross receipts. As mentioned earlier, for 2021, a significant decline is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross invoices compared to the immediately 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 (as much as 70%) of certified incomes paid to workers, including specific health plan expenditures. The maximum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, companies that got a Paycheck Security Program (PPP) loan were not eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 allows businesses to claim the ERC even if they received a PPP loan. However, the very same wages can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and boosted, allowing eligible employers to declare the credit for certified salaries paid as far back as March 13, 2020. This retroactive arrangement provides an opportunity for companies to change prior-year tax returns and get refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their work income tax return, typically Kind 941. If the credit goes beyond the quantity of work taxes owed, the excess can be refunded to the employer.
It is very important to note that the ERC provisions and eligibility criteria have developed gradually. The best strategy is to seek advice from a tax professional or visit the main IRS website for the most in-depth and up-to-date information relating to the ERC, consisting of any current legal modifications or updates.
To receive the ERC, a business must fulfill one of the following criteria:.
The business operations were totally or partly suspended due to a federal government order related to COVID-19.
Business experienced a considerable decline in gross invoices. For 2021, a considerable decline is defined as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
The ERC is readily available to services of all sizes, consisting of tax-exempt organizations, however there are some exceptions. Federal government entities and companies that got a PPP loan might have restrictions on claiming the credit.
The process for claiming the ERC involves finishing the needed types and including the credit on your work income tax return (normally Form 941). The exact time it takes to process the credit can differ based upon numerous factors, consisting of the intricacy of your company and the workload of the IRS. It’s recommended to seek advice from a tax expert for assistance specific to your situation.
There are numerous companies that can help with the procedure of claiming the ERC. These include accounting companies, tax advisory services, and payroll provider. Some well-known companies that use help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research and get in touch with these business directly to inquire about their charges and services.
Please note that the information provided here is based on general understanding and might not show the most current updates or modifications to the ERC. It’s important to talk to a tax professional or go to the main internal revenue service site for the most current and accurate details regarding eligibility, declaring treatments, and readily available assistance.
Less than 100. The credit is based if the employer had 100 or fewer staff members on average in 2019.
on wages paid to all workers whether they in fact worked or not. Simply put, 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 staff members on average in 2019.
allowed only for wages paid to employees who did not work throughout the calendar quarter.
In both cases, “wages” consists of not simply money payments but likewise a portion of the cost of company.
provided healthcare. How Do I Calculate My Employee Retention Credit
Payment.
Employers can be immediately compensated for the credit by minimizing the amount of payroll taxes they.