Lets talk first about Irs Guidance Employee Retention Credit :
Our group here what do these people doing everybody in this room is helping teach individuals about ERC and uh always provide a beautiful breakfast and have individuals actually learn more about the program we ought to head to the room where we are able to display some 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 hundreds of millions of dollars so these are replicate copies of the letters that go to clients validating that the check is on the way I indicate you understand if you simply start to take a look at a few of these here I suggest this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s just I mean consider the number of real 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 verified 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 understand the check is gone for sure which’s when they pay so they do not pay anything until they really receive the money they don’t pay bottom line Wonder trust anything till this letter is validated the check is on the way they deposit it into their savings account and they can really rely on Wonder trust that the process has been finished and the number of you believe you’ve processed because you started 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 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 speaking about something actually essential today the employee retention credit which most of you have never ever become aware of I definitely had not heard of it up until extremely recently and discovered a lot about it because this is most likely the most affordable cost of capital for any small business 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 Concepts 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 just call up your bank supervisor and say offer 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’ve ended up being yes the Ambassador and paid representative for this I love this program it’s going away very soon you got to learn all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply start there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act used businesses 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone it makes a big distinction right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the cash money payroll tax refund fine go on sorry I just have to make certain we got that point I suggest that’s a huge difference a loan versus cash cash I like money cash that’s what we’re talking about 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 stunning tough check in the mail where you get real cash from the IRS all right so let’s talk about how it works since it sounds like to me if it’s a if it’s staff member retention credit that person had to be an employee so I’m going to make the Assumption this money is not for the owner not for individuals on the cap table not for investors it’s for workers right you needed to have owned an organization however it’s based on you having W-2 staff members 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 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 six quarters so you had quarters 2 3 and four of 2020 and you had quarters one two and 3 of 2021. all right so that’s how it’s determined you have 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 worker that was on a W-2 in those six quarters so the calculation in 2020 to be exact Kevin is 50 of the staff member’s wage to a maximum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers increased 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 due to the fact that the turmoil of the pandemic so they wished to even get more to keep those workers 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 happens 21 000 Max in 2021 oh that’s how you create twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per staff member that is since that’s a great deal 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 typically Kevin is if you took PPP cash somewhere 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 workers and you took PPP money you would still get a million dollar in the mail from the IRS so it’s substantial undoubtedly now the huge concern is why does no one know about this due to the fact that look when I first heard about this when I initially fulfilled Josh you understand I’ve got lots of financial investments in great deals of business I’m a major supporter for entrepreneurship in America and make many lots of financial investments in entrepreneurs of which numerous suffered through the pandemic when I first found out about this I called BS I don’t think it since 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 and that were well deserved and we used them sensibly to stay alive throughout the pandemic so when I heard about this I stated nah it can’t hold true but when I dug around I even called to my political leader pals Guv Senators they didn’t know about it I imply that’s how you know that’s how false information is that there’s no information out there then a lot of individuals told me well you can’t get it because you took the PPP likewise not true so let’s ask Josh why does no one know about the staff member retention credit you know what’s interesting you’re speaking about the banks Kevin because in the PPP loan process the federal government made it really clear that if you wanted a PPP loan you would call Wells Fargo Citibank Bank of America any of the huge banks in our nation 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 turmoil since remember in the initial cares act you might 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 he or she’s never done it in the past do the banks do it nope the banks don’t 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 company and bottom line my company Kevin has actually been in business since 2009 and we’ve been working with the federal government and the state government to recuperate money for Fortune 500 Fortune 1000 companies so a lot of our huge huge corporate customers have actually worked with bottom line to recover other government programs we have actually done sales tax and use tax joblessness tax work opportunity 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.
companies to keep employees on their payroll. The credit is 50% of approximately $10,000 in incomes paid by an.
Because of COVID-19 or whose gross invoices, employer whose business is totally or partially suspended.
decrease by more than 50%.
1. The credit is readily available to all companies regardless of size consisting of tax exempt companies. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
businesses who take Small company Loans.
2. To qualify, the company has to meet one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s company is fully or partly suspended by 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 invoices go above 80% of a comparable quarter in 2019 they no longer certify.
after the end of that quarter.
Computation 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 incomes paid after March 13th and before December 31, 2020.
The definition of certifying incomes varies by whether an employer had, on average, more or less than.
100 staff members in 2019.
Companies that concentrate on ERC filing assistance typically supply proficiency and assistance to help businesses navigate the complicated process of claiming the credit. They can use various services, consisting of:.
How is the employee retention credit calculated? Irs Guidance Employee Retention Credit
Eligibility Assessment: These companies will assess your organization’s eligibility for the ERC based upon factors such as your industry, profits, and operations. If you satisfy the requirements for the credit and identify the maximum credit quantity you can declare, they can assist figure out.
Documentation and Computation: ERC filing services will assist in gathering the necessary paperwork, such as payroll records and monetary declarations, to support your claim. They will likewise help calculate the credit amount based on qualified earnings and other certifying costs.
Retroactive Claim Review: If you are eligible to claim the ERC for previous quarters, these business can evaluate your past payroll records and financials to recognize possible opportunities for retroactive credits. They can help you amend previous tax returns to declare these refunds.
Filing Support: Companies concentrating on ERC filings will prepare and send the needed kinds and documentation on your behalf. This includes finishing Form 941 or any other necessary tax return.
Compliance and Updates: ERC regulations and guidance have progressed with time. These companies stay upgraded with the most recent modifications and ensure that your filings comply with the most present standards. If the IRS demands additional details or performs an audit related to your ERC claim, they can also provide continuous assistance.
It is necessary to research study and veterinarian any company offering ERC filing support to ensure their trustworthiness and know-how. Search for recognized companies with experience in tax and payroll services, or think about connecting to relied on accounting companies or tax specialists who provide ERC filing support.
Keep in mind that while these companies can offer valuable assistance, it’s always an excellent idea to have a basic understanding of the ERC requirements and process yourself. This will help you make notified choices and ensure 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 measures. The goal of the ERC is to encourage businesses to retain and pay their staff members during the pandemic, even if their operations have actually been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to eligible companies, consisting of for-profit businesses, tax-exempt organizations, and particular governmental entities. To certify, companies need to satisfy one of two criteria:.
The business operations were totally or partly suspended due to a federal government order related to COVID-19.
Business experienced a considerable decrease in gross invoices. As mentioned earlier, for 2021, a significant decline is specified as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decrease is specified 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.
Credit Amount: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit amount is equal to a percentage (approximately 70%) of certified wages paid to workers, including certain health insurance expenditures. The maximum credit per staff member is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, businesses that got a Paycheck Security Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 permits services to claim the ERC even if they got a PPP loan. However, the same earnings can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively expanded and improved, permitting eligible employers to declare the credit for certified incomes paid as far back as March 13, 2020. This retroactive arrangement provides an opportunity for businesses to modify prior-year tax returns and get refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their employment income tax return, normally Type 941. If the credit surpasses the amount of employment taxes owed, the excess can be reimbursed to the company.
It is necessary to note that the ERC arrangements and eligibility requirements have actually progressed with time. The best strategy is to consult with a tax professional or visit the official IRS site for the most updated and comprehensive info relating to the ERC, consisting of any recent legislative changes or updates.
To get approved for the ERC, a company must meet one of the following criteria:.
Business operations were completely or partly suspended due to a government order related to COVID-19.
The business experienced a considerable decrease in gross invoices. 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 considerable decrease is defined as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decline 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, but there are some exceptions. Government entities and organizations that received a PPP loan might have restrictions on claiming the credit.
The process for declaring the ERC includes finishing the required types and consisting of the credit on your work tax return (usually Type 941). The exact time it takes to process the credit can vary based upon numerous factors, consisting of the intricacy of your organization and the workload of the internal revenue service. It’s advised to consult with a tax professional for guidance particular to your circumstance.
There are numerous business that can help with the procedure of declaring the ERC. These consist of accounting companies, tax advisory services, and payroll company. Some well-known companies that offer support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research and call these companies straight to ask about their services and fees.
Please keep in mind that the information provided here is based on basic knowledge and may not reflect the most recent updates or changes to the ERC. It is necessary to seek advice from a tax expert or visit the main IRS site for the most current and accurate info regarding eligibility, declaring treatments, and readily available assistance.
Less than 100. The credit is based if the employer had 100 or less staff members on average in 2019.
on wages paid to all staff members whether they in fact worked or not. To put it simply, even if the.
staff members 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 staff members on average in 2019, then the credit is.
permitted only for earnings paid to staff members who did not work during the calendar quarter.
In both cases, “incomes” consists of not just cash payments however likewise a portion of the expense of company.
offered healthcare. Irs Guidance Employee Retention Credit
Employers can be instantly compensated for the credit by decreasing the quantity of payroll taxes they.