Lets talk first about How Much Is Employee Retention Credit :
Our team here what do these men doing everyone in this space is helping teach people about ERC and uh constantly provide a stunning breakfast and have people really learn 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 hundreds of countless dollars literally Kevin numerous millions of dollars so these are duplicate copies of the letters that go to clients verifying that the check is on the method I indicate you understand if you just start 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 mean it’s just I suggest think about the number of real 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 confirmed and the check is on the mail in the mail from the internal revenue service heading to the customer so that’s how you’re able 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 till they actually receive the money they do not 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 genuinely trust Wonder trust that the procedure has actually been completed and the number of you believe you have actually processed since you started this we’re about 35 000 of these for
about 6 billion dollars wow so plainly they understand what they’re doing and that’s what you require you need professionals 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 discussing something actually important today the employee retention credit which most of you have actually never heard of I definitely hadn’t become aware of it up until really recently and found out a lot about it since this is probably the lowest cost of capital for any small business anywhere
anytime if you have employees between five and five hundred so I’ve got the expert with me this is Josh Fox he’s the founder and CEO of bottom line Principles they’re the biggest processor of these ERC credits this is a 170 page program so it’s difficult this isn’t like PPP we simply call up your bank manager and state give 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 have actually become yes the Ambassador and paid representative for this I enjoy 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 just begin there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act provided businesses 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everybody it makes a big distinction right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the money cash payroll tax refund fine go on sorry I simply need to make certain we got that point I suggest that’s a huge distinction a loan versus money money I like money cash that’s what we’re talking 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 gorgeous difficult check in the mail where you get real money from the IRS all right so let’s discuss how it works because it seems like to me if it’s a if it’s employee retention credit that person needed to be a worker 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 needed to have owned a company however it’s based upon you having W-2 employees in America not 10.99. As long as you had W-2 workers 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 6 quarters the program was open well walk us through the six quarters so you had quarters 2 three and 4 of 2020 and you had quarters one two and 3 of 2021. alright so that’s how it’s determined you have to be on the W-2 throughout that period 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 estimation in 2020 to be exact Kevin is 50 of the employee’s wage to an optimum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers escalated to 70 of the employee’s salary to a maximum of 7 thousand per quarter how did that take place um they just 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 after that what takes place 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 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 decreased from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would reduce 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 City where I’m from and you had a hundred staff members 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 big question is why does nobody know about this because appearance when I initially became aware of this when I first satisfied Josh you understand I have actually got lots of investments in lots of business I’m a major advocate for entrepreneurship in America and make many 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 due to the fact that I use the PPP we went through the cash 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 carefully to survive throughout 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 false information is that there’s no information out there then a lot of people informed me well you can’t get it due to the fact that you took the PPP likewise not real 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 process the federal government made it very clear that if you wanted 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 just process procedure that’s all um and here there was turmoil due to the fact that remember in the original cares act you might not do both programs so if you had done PPP you might refrain from doing ERC in the initial program and when they altered the law in 2021 the banks were refraining from doing ERC because it’s not alone so you’re getting a tax refund so the government never ever made it clear to any person about how to.
do this does your CFO know how to do this not actually she or he’s never ever done it previously 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 business your accounting professional no your accounting professional’s never done this before unless you have an account that entered into this service and bottom line my firm Kevin has actually stayed in business given that 2009 and we have actually been working with the federal government and the state government to recover money for Fortune 500 Fortune 1000 business so a lot of our huge huge business clients have actually dealt with bottom line to recuperate other federal government programs we have actually done sales tax and use tax joblessness 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 designed to encourage.
companies to keep employees on their payroll. The credit is 50% of up to $10,000 in incomes paid by an.
Because of COVID-19 or whose gross invoices, company whose company is fully or partly suspended.
decline by more than 50%.
1. The credit is readily available to all employers regardless of 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 Business Loans.
2. To certify, the company has to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s service is completely or partially suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross invoices are listed below 50% of the similar quarter in 2019. Once the.
company’s gross invoices exceed 80% of a similar quarter in 2019 they no longer qualify.
after completion of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the qualifying wages paid up to $10,000 in total.
It works for salaries paid after March 13th and prior to December 31, 2020.
The meaning of certifying incomes varies by whether an employer had, usually, more or less than.
100 employees in 2019.
Companies that concentrate on ERC filing assistance typically provide know-how and support to assist businesses browse the intricate process of declaring the credit. They can offer different services, including:.
How is the employee retention credit calculated? How Much Is Employee Retention Credit
Eligibility Assessment: These companies will assess your organization’s eligibility for the ERC based on elements such as your industry, earnings, and operations. They can assist figure out if you fulfill the requirements for the credit and determine the maximum credit amount you can claim.
Documentation and Estimation: ERC filing services will help in collecting the required documents, such as payroll records and financial statements, to support your claim. They will likewise assist determine the credit quantity based upon eligible salaries and other qualifying expenses.
Retroactive Claim Review: If you are qualified to declare the ERC for prior quarters, these companies can examine your past payroll records and financials to determine prospective opportunities for retroactive credits. They can assist you amend previous tax returns to declare these refunds.
Filing Assistance: Business concentrating on ERC filings will prepare and send the needed kinds and paperwork on your behalf. This consists of completing Kind 941 or any other required tax forms.
Compliance and Updates: ERC guidelines and guidance have progressed with time. These business stay updated with the current modifications and guarantee that your filings comply with the most current standards. If the IRS requests extra info or carries out an audit associated to your ERC claim, they can likewise offer ongoing support.
It’s important to research study and vet any business using ERC filing help to guarantee their credibility and knowledge. Search for established firms with experience in tax and payroll services, or consider connecting to relied on accounting companies or tax experts who use ERC submitting assistance.
Bear in mind that while these companies can provide important help, 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 guarantee accurate filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief steps. The objective of the ERC is to motivate services to keep and pay their workers throughout the pandemic, even if their operations have actually been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is available to qualified companies, including for-profit services, tax-exempt companies, and certain governmental entities. To certify, employers should fulfill one of two criteria:.
Business operations were completely or partially suspended due to a federal government order related to COVID-19.
Business experienced a considerable decline in gross receipts. As mentioned earlier, for 2021, a significant decline is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decline in gross receipts 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 quantity amounts to a portion (up to 70%) of qualified salaries paid to workers, including specific health plan expenses. The maximum credit per worker 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. Nevertheless, legislation passed in late 2020 and extended in 2021 permits organizations to claim the ERC even if they got a PPP loan. However, the very same incomes can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and improved, permitting eligible employers to claim the credit for qualified salaries paid as far back as March 13, 2020. This retroactive arrangement offers an opportunity for companies to modify prior-year income tax return and receive refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their work income tax return, generally Form 941. The excess can be refunded to the company if the credit surpasses the amount of employment taxes owed.
It is essential to keep in mind that the ERC provisions and eligibility criteria have actually developed gradually. The very best course of action is to speak with a tax professional or visit the official IRS website for the most in-depth and updated information regarding the ERC, consisting of any recent legal modifications or updates.
To get approved for the ERC, a business should fulfill among the following requirements:.
The business operations were completely or partly suspended due to a federal government order related to COVID-19.
Business experienced a significant decline in gross receipts. For 2021, a significant decline is specified as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a substantial decline is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross receipts compared to the immediately preceding quarter.
The ERC is readily available to organizations of all sizes, including tax-exempt companies, however there are some exceptions. Federal government entities and businesses that got a PPP loan may have constraints on declaring the credit.
The procedure for declaring the ERC involves completing the required kinds and including the credit on your work income tax return (generally Kind 941). The exact time it requires to process the credit can differ based upon a number of elements, consisting of the complexity of your company and the workload of the internal revenue service. It’s recommended to speak with a tax professional for guidance specific to your scenario.
There are a number of companies that can assist with the procedure of declaring the ERC. Some popular companies that offer support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the info provided here is based on general knowledge and may not reflect the most current updates or modifications to the ERC. It is very important to seek advice from a tax expert or check out the official internal revenue service website for the most current and precise info regarding eligibility, declaring procedures, and offered help.
Less than 100. The credit is based if the company had 100 or less staff members on average in 2019.
on incomes paid to all employees whether they actually worked or not. To put it simply, even if the.
employees worked full-time and got paid for full-time work, the company still gets the credit.
Greater than 100. The credit is if the employer had more than 100 employees on average in 2019.
permitted only for wages paid to staff members who did not work during the calendar quarter.
In both cases, “earnings” includes not just money payments but also a part of the cost of company.
offered health care. How Much Is Employee Retention Credit
Companies can be immediately reimbursed for the credit by reducing the amount of payroll taxes they.