Lets talk first about How To Use Employee Retention Credit :
Our team here what do these guys doing everyone in this room is helping teach people about ERC and uh always supply a lovely 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 wish 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 simply 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 mean it’s simply I mean think about 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 verified the numbers are confirmed and the check is on the mail in the mail from the internal revenue service heading to the consumer so that’s how you’re able to track it you understand when you
get this you understand the check is chosen sure and that’s when they pay so they don’t pay anything up until they really get the money they do not pay bottom line Wonder trust anything till this letter is verified the check is on the way they transfer it into their checking account and they can truly rely on Wonder trust that the process has been finished and how many you believe you’ve processed because you began this we have to do with 35 000 of these for
about 6 billion dollars wow so clearly they know 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 Wonderful here you’re at my YouTube channel we’re talking about something truly crucial today the employee retention credit which the majority of you have never ever become aware of I certainly had not heard of it until really just recently and discovered a lot about it since this is most likely the most affordable expense of capital for any small company anywhere
anytime if you have workers between 5 and five hundred so I have actually got the expert with me this is Josh Fox he’s the founder 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 simply contact your bank supervisor and say 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 ended up being yes the Ambassador and paid representative for this I like this program it’s disappearing soon you got to learn everything about it let’s talk worker retention credit Josh Fox what is an ERC let’s simply start there so throughout the Trump Administration when President Trump was enacted they developed the cares Act and the cares act provided organizations 3 opportunities 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 cash money payroll tax refund fine go on sorry I just need to make sure we got that point I mean that’s a big difference a loan versus money money I like cash cash that’s what we’re talking 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 stunning difficult check in the mail where you get real cash from the IRS all right so let’s speak about how it works because it sounds like to me if it’s a if it’s employee retention credit that person had to be an employee so I’m going to make the Presumption this money is not for the owner not for people on the cap table not for investors it’s for staff members right you had to have owned a business however it’s based upon you having W-2 workers 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 eligible so you need to be on payroll in 2020 on the W-2 and you need to be on payroll for the very first 6 months of 2021 on the W-2 proper so there were 6 quarters the program was open well walk us through the 6 quarters so you had quarters 2 3 and 4 of 2020 and you had quarters one 2 and three of 2021. all right so that’s how it’s determined you need to be on the W-2 throughout that period now let’s talk my preferred part money just 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 specific Kevin is 50 of the employee’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 worker’s income to a maximum of 7 thousand per quarter how did that occur um they just altered the rules in.
2021 versus because the mayhem of the pandemic so they wished 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 up to five thousand Max and after that what takes place 21 000 Max in 2021 oh that’s how you create twenty 6 thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per worker that is because that’s a lot of cash it is now there’s a caveat here the PPP money would have to be lowered from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would lower the 26 000 so what we’re seeing usually Kevin is if you took PPP cash someplace around 10 thousand dollars an individual so let’s say hypothetically you owned a restaurant in New york city 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 substantial clearly now the big concern is why does nobody understand about this because look when I first found out about this when I initially fulfilled Josh you understand I’ve got great deals of financial investments in lots of business I’m a major supporter for entrepreneurship in America and make many numerous financial investments in entrepreneurs of which many suffered through the pandemic when I initially found out about this I called BS I don’t believe 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 which were well been worthy of and we utilized them sensibly to stay alive during the pandemic so when I heard about this I said nah it can’t be true however when I dug around I even called to my politician good friends Guv Senators they didn’t know about it I imply that’s how you know that’s how misinformation is that there’s no info 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 employee retention credit you know what’s interesting you’re talking about the banks Kevin since in the PPP loan procedure 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 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 process that’s all um and here there was turmoil since keep in mind in the initial cares act you might refrain from doing both programs so if you had 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 due to the fact that it’s not alone so you’re getting a tax refund so the federal government never ever made it clear to anybody about how to.
do this does your CFO understand how to do this not really she or he’s never done it previously do the banks do it nope the banks don’t 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 prior to unless you have an account that entered into this business and bottom line my firm Kevin has stayed in business given that 2009 and we’ve been working with the federal government and the state government to recuperate money for Fortune 500 Fortune 1000 business so a lot of our huge big business customers have actually worked with bottom line to recuperate other federal government programs we’ve done sales tax and use tax joblessness tax work chance tax credits research and development tax credits unclaimed property property tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit created to motivate.
companies to keep workers on their payroll. The credit is 50% of up to $10,000 in wages paid by an.
employer whose organization is totally or partly suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
Availability.
1. The credit is readily available to all companies no matter size including tax exempt companies. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) little.
organizations who take Small Business Loans.
2. To certify, the employer needs to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s service is fully or partially suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross receipts are listed below 50% of the similar quarter in 2019. When the.
company’s gross invoices go above 80% of a comparable quarter in 2019 they no longer qualify.
after the end of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the qualifying earnings paid up to $10,000 in overall.
It is effective for earnings paid after March 13th and prior to December 31, 2020.
The definition of certifying earnings varies by whether an employer had, usually, basically than.
100 workers in 2019.
Business that specialize in ERC filing help generally offer proficiency and assistance to assist organizations navigate the complex procedure of declaring the credit. They can use different services, including:.
How is the employee retention credit calculated? How To Use Employee Retention Credit
Eligibility Evaluation: These business will assess your organization’s eligibility for the ERC based on factors such as your industry, earnings, and operations. They can help figure out if you fulfill the requirements for the credit and recognize the maximum credit quantity you can declare.
Paperwork and Computation: ERC filing services will assist in collecting the required paperwork, such as payroll records and financial declarations, to support your claim. They will also help calculate the credit quantity based on qualified earnings and other certifying costs.
Retroactive Claim Review: If you are qualified to claim the ERC for prior quarters, these companies can evaluate your past payroll records and financials to determine prospective chances for retroactive credits. They can assist you modify prior income tax return to claim these refunds.
Filing Support: Business concentrating on ERC filings will prepare and send the required types and paperwork in your place. This consists of completing Form 941 or any other required tax forms.
Compliance and Updates: ERC guidelines and guidance have actually evolved in time. These business remain updated with the latest changes and guarantee that your filings adhere to the most current standards. They can also provide ongoing assistance if the internal revenue service demands extra info or carries out an audit related to your ERC claim.
It is very important to research and vet any business offering ERC filing help to guarantee their trustworthiness and know-how. Try to find established firms with experience in tax and payroll services, or consider reaching out to trusted accounting companies or tax experts who use ERC filing assistance.
Bear in mind that while these companies can offer important assistance, it’s always a great concept to have a basic understanding of the ERC requirements and process yourself. This will help you make notified choices and ensure precise filings.
The Worker Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief measures. The objective of the ERC is to motivate organizations to maintain and pay their workers throughout the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to eligible companies, consisting of for-profit businesses, tax-exempt companies, and particular governmental entities. To certify, employers should meet one of two requirements:.
Business operations were totally or partially suspended due to a federal government order related to COVID-19.
The business experienced a considerable decrease in gross receipts. As mentioned previously, for 2021, a substantial decline is defined as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the immediately 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 (as much as 70%) of certified earnings paid to workers, including particular health plan costs. 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, services that received an Income Security Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 permits companies to claim the ERC even if they got a PPP loan. However, the very same earnings can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively broadened and enhanced, permitting eligible companies to claim the credit for qualified earnings paid as far back as March 13, 2020. This retroactive provision offers a chance for services to change prior-year income tax return and get refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their employment income tax return, typically Form 941. The excess can be reimbursed to the employer if the credit surpasses the quantity of employment taxes owed.
It’s important to keep in mind that the ERC arrangements and eligibility requirements have developed in time. The very best strategy is to seek advice from a tax professional or go to the official internal revenue service site for the most current and in-depth information concerning the ERC, including any current legislative modifications or updates.
To receive the ERC, a service should fulfill one of the following requirements:.
Business operations were totally or partially suspended due to a federal government order related to COVID-19.
Business experienced a substantial decrease in gross invoices. For 2021, a substantial decrease is defined as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a substantial decrease 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 instantly preceding quarter.
The ERC is readily available to businesses of all sizes, including tax-exempt organizations, however there are some exceptions. Government entities and businesses that received a PPP loan might have restrictions on claiming the credit.
The process for declaring the ERC involves finishing the necessary forms and consisting of the credit on your work tax return (typically Form 941). The exact time it takes to process the credit can vary based on a number of factors, consisting of the intricacy of your organization and the workload of the internal revenue service. It’s advised to seek advice from a tax professional for assistance specific to your circumstance.
There are several companies that can assist with the procedure of claiming the ERC. Some popular companies that provide help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the details provided here is based upon basic understanding and might not show the most recent updates or changes to the ERC. It is very important to speak with a tax professional or check out the main IRS website for the most current and accurate info regarding eligibility, claiming procedures, and available support.
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 really worked or not. Simply put, even if the.
workers worked full time and got paid for full time work, the company still gets the credit.
Greater than 100. If the employer had more than 100 staff members on average in 2019, then the credit is.
permitted just for wages paid to employees who did not work throughout the calendar quarter.
In both cases, “incomes” consists of not simply money payments however also a part of the cost of employer.
offered healthcare. How To Use Employee Retention Credit
Payment.
Employers can be right away compensated for the credit by minimizing the quantity of payroll taxes they.