Lets talk first about How Does The Employee Retention Credit Work :
Our team here what do these men doing everyone in this space is assisting teach individuals about ERC and uh constantly offer a gorgeous breakfast and have individuals really learn about 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 hundreds of millions of dollars literally Kevin numerous countless dollars so these are duplicate copies of the letters that go to clients verifying that the check is on the way I indicate you understand if you just start 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 imply it’s simply I imply think about how many actual customers that went through the program yeah this is the very end this is the party at the end when the check is verified the numbers are verified and the check is on the mail in the mail from the internal revenue service 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 which’s when they pay so they do not pay anything up until they really receive the cash they do not pay bottom line Wonder trust anything till this letter is confirmed the check is on the way they deposit it into their bank account and they can truly rely on Wonder trust that the process has actually been ended up and the number of you believe you’ve processed given that you began this we’re about 35 000 of these for
about six billion dollars wow so clearly they know what they’re doing which’s what you need you require professionals 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 Fantastic here you’re at my YouTube channel we’re talking about something really essential today the employee retention credit which most of you have actually never ever become aware of I certainly had not heard of it up until extremely just recently and discovered a lot about it because this is most likely the most affordable expense of capital for any small business anywhere
anytime if you have employees between five and five hundred so I have actually got the specialist with me this is Josh Fox he’s the creator and CEO of bottom line Principles they’re the largest processor of these ERC credits this is a 170 page program so it’s not easy this isn’t like PPP we simply contact your bank manager and say offer me a loan it does not 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’ve ended up being yes the Ambassador and paid spokesperson for this I enjoy this program it’s disappearing very soon you got to learn all 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 came up with the cares Act and the cares act offered businesses 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everyone it makes a huge distinction right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the money money payroll tax refund fine go on sorry I just have to ensure we got that point I suggest that’s a big difference a loan versus money money I like money cash that’s what we’re speaking about alright 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 difficult check in the mail where you get actual cash from the IRS all right so let’s discuss how it works since it sounds like to me if it’s a if it’s worker retention credit that individual needed to be an employee so I’m going to make the Presumption this cash is not for the owner not for individuals on the cap table not for investors it’s for employees right you had to have owned a business but it’s based on you having W-2 workers 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 first 6 months of 2021 on the W-2 proper so there were six quarters the program was open well walk us through the six quarters so you had quarters two three and 4 of 2020 and you had quarters one 2 and 3 of 2021. all right so that’s how it’s determined you need to be on the W-2 throughout that duration now let’s talk my preferred part money how much can you get back per staff member that was on a W-2 in those six quarters so the calculation in 2020 to be precise Kevin is 50 of the worker’s wage 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 income to an optimum of 7 thousand per quarter how did that occur um they simply altered the rules in.
2021 versus due to the fact that the turmoil of the pandemic so they wished 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 5 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 6 thousand dollars per staff member that is since that’s a lot of money it is now there’s a caution here the PPP money would need to be reduced from the twenty 6 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 ten thousand dollars a person so let’s state hypothetically you owned a restaurant 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 big certainly now the huge concern is why does no one know about this because appearance when I first heard about this when I first fulfilled Josh you know I have actually got great deals of investments in great deals of business I’m a significant supporter for entrepreneurship in America and make lots of many financial investments in business owners of which many suffered through the pandemic when I first became aware of this I called BS I don’t think it due to the fact that 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 during the pandemic so when I heard about this I said nah it can’t be true however when I dug around I even contacted us to my political leader friends Guv Senators they didn’t know about it I suggest that’s how you understand that’s how false information is that there’s no info out there then a bunch of people informed me well you can’t get it because you took the PPP also not real so let’s ask Josh why does no one know about the employee retention credit you understand what’s fascinating you’re speaking about the banks Kevin due to the fact that in the PPP loan procedure 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 huge 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 turmoil because remember in the original cares act you could refrain from doing both programs so if you had actually done PPP you might not do 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 federal government never made it clear to anybody about how to.
do this does your CFO know how to do this not truly she or he’s never ever done it before do the banks do it nope the banks do not do it the payroll companies yeah some of them are doing it as a payroll business your accountant no your accounting professional’s never done this before unless you have an account that went into this organization and bottom line my company Kevin has stayed in business since 2009 and we have actually been working with the federal government and the state federal government to recuperate cash for Fortune 500 Fortune 1000 business so a lot of our big huge corporate customers have actually worked with bottom line to recuperate other federal government programs we’ve done sales tax and use tax unemployment tax work chance tax credits research and development tax credits unclaimed home real estate tax all of these other federal government programs.
The staff member retention tax credit is a broad based refundable tax credit created to motivate.
employers to keep employees on their payroll. The credit is 50% of approximately $10,000 in salaries paid by an.
Due to the fact that of COVID-19 or whose gross receipts, company whose organization is totally or partly suspended.
decline by more than 50%.
1. The credit is available to all employers despite size consisting of tax exempt organizations. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
organizations who take Small Business Loans.
2. To certify, the company has to fulfill one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s service is completely or partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross invoices are listed below 50% of the equivalent quarter in 2019. Once the.
company’s gross receipts exceed 80% of an equivalent quarter in 2019 they no longer certify.
after the end of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the certifying wages paid up to $10,000 in overall.
It is effective for incomes paid after March 13th and prior to December 31, 2020.
The definition of certifying salaries differs by whether an employer had, on average, basically than.
100 workers in 2019.
Companies that specialize in ERC filing help usually provide competence and assistance to help businesses browse the intricate procedure of claiming the credit. They can offer numerous services, including:.
How is the employee retention credit calculated? How Does The Employee Retention Credit Work
Eligibility Assessment: These business will examine your organization’s eligibility for the ERC based on elements such as your market, income, and operations. If you satisfy the requirements for the credit and determine the optimum credit amount you can declare, they can help identify.
Documentation and Estimation: ERC filing services will assist in gathering the required documentation, such as payroll records and monetary declarations, to support your claim. They will also assist compute the credit quantity based on eligible salaries and other certifying costs.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for prior quarters, these companies can examine your past payroll records and financials to identify possible opportunities for retroactive credits. They can help you modify previous tax returns to declare these refunds.
Filing Help: Companies focusing on ERC filings will prepare and send the essential forms and paperwork on your behalf. This consists of finishing Type 941 or any other required tax return.
Compliance and Updates: ERC guidelines and guidance have actually evolved with time. These business remain upgraded with the current modifications 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 supply continuous assistance.
It’s important to research and vet any business using ERC filing help to guarantee their credibility and proficiency. Try to find recognized companies with experience in tax and payroll services, or consider reaching out to relied on accounting firms or tax specialists who use ERC submitting assistance.
Remember that while these companies can provide valuable support, it’s constantly a great idea to have a standard understanding of the ERC requirements and process yourself. This will help you make notified decisions and make sure accurate filings.
The Worker Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief procedures. The objective of the ERC is to motivate organizations to retain 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 offered to eligible companies, consisting of for-profit companies, tax-exempt organizations, and specific governmental entities. To certify, companies need to 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 decrease in gross invoices. As mentioned previously, for 2021, a considerable decrease is specified 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% decrease in gross invoices 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 quantity amounts to a portion (up to 70%) of qualified wages paid to workers, consisting of certain 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, businesses that received an Income Defense Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 enables services to claim the ERC even if they received a PPP loan. The same incomes can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and enhanced, allowing eligible companies to declare the credit for qualified incomes paid as far back as March 13, 2020. This retroactive provision offers an opportunity for organizations to change prior-year tax returns and receive refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their work tax returns, normally Type 941. If the credit goes beyond the amount of employment taxes owed, the excess can be reimbursed to the employer.
It is very important to keep in mind that the ERC provisions and eligibility criteria have actually developed gradually. The very best strategy is to speak with a tax professional or go to the official IRS website for the most in-depth and current information concerning the ERC, consisting of any current legal modifications or updates.
To get approved for the ERC, a company needs to meet among the following requirements:.
Business operations were totally or partially suspended due to a government order related to COVID-19.
Business experienced a considerable decrease in gross receipts. For 2021, a considerable decrease is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decrease is specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross invoices compared to the right away preceding quarter.
The ERC is readily available to services of all sizes, consisting of tax-exempt companies, however there are some exceptions. For instance, government entities and services that got a PPP loan may have restrictions on declaring the credit.
The procedure for claiming the ERC involves finishing the necessary forms and consisting of the credit on your employment income tax return (normally Form 941). The exact time it takes to process the credit can differ based upon a number of factors, consisting of the complexity 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 help with the process of claiming the ERC. Some widely known companies that provide support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the details supplied here is based upon basic knowledge and might not reflect the most current updates or changes to the ERC. It is very important to consult with a tax expert or go to the official IRS site for the most current and precise information concerning eligibility, declaring treatments, and available assistance.
Less than 100. The credit is based if the company had 100 or less workers on average in 2019.
on earnings paid to all employees whether they actually worked or not. To put it simply, even if the.
workers worked full-time and got paid for full time work, the employer still gets the credit.
Greater than 100. If the employer had more than 100 workers on average in 2019, then the credit is.
permitted only for incomes paid to employees who did not work throughout the calendar quarter.
In both cases, “earnings” includes not just money payments but likewise a part of the cost of employer.
provided healthcare. How Does The Employee Retention Credit Work
Companies can be right away compensated for the credit by minimizing the quantity of payroll taxes they.