Lets talk first about Is Employee Retention Credit For Employees Or Employers :
Our group here what do these guys doing everyone in this space is helping teach people about ERC and uh always provide a lovely breakfast and have people actually learn more about the program we need to 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 countless dollars literally Kevin numerous countless dollars so these are duplicate copies of the letters that go to clients validating that the check is on the method I suggest you know if you just start to look at a few of these here I imply this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s just I suggest think about how many actual 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 IRS heading to the client so that’s how you’re able to track it you understand when you
get this you understand the check is opted for sure which’s when they pay so they don’t pay anything up until they actually get 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 genuinely trust Wonder trust that the process has actually been ended up and the number of you think you’ve processed considering that you started this we’re about 35 000 of these for
about 6 billion dollars wow so plainly they understand what they’re doing which’s what you need you need experts 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 discussing something really crucial today the staff member retention credit which most of you have never ever become aware of I certainly had not become aware of it till extremely just recently and found out 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 in between five and five hundred so I have actually got the expert with me this is Josh Fox he’s the creator and CEO of bottom line Concepts 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 your bank manager and say provide 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 become yes the Ambassador and paid spokesperson for this I enjoy this program it’s disappearing soon you got to learn all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just begin there so during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act offered companies three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everyone it makes a huge difference right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
remedy the money cash payroll tax refund okay go on sorry I just need to make certain we got that point I suggest that’s a huge difference a loan versus cash money I like money money that’s what we’re discussing 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 lovely tough check in the mail where you get actual money from the IRS all right so let’s speak about how it works due to the fact that it sounds like to me if it’s a if it’s employee retention credit that person needed to be a staff member so I’m going to make the Assumption 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 company however it’s based upon you having W-2 staff members in America not 10.99. so 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 very first 6 months of 2021 on the W-2 correct so there were 6 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 2 and 3 of 2021. okay so that’s how it’s determined you need to be on the W-2 during that duration now let’s talk my preferred part cash just how much can you return per worker that was on a W-2 in those six quarters so the computation in 2020 to be exact Kevin is 50 of the staff member’s wage to a maximum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers increased to 70 of the employee’s wage to a maximum of seven thousand per quarter how did that happen um they just altered the rules in.
2021 versus because 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 occurs 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 6 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 money would need to be minimized from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would decrease the 26 000 so what we’re seeing typically Kevin is if you took PPP cash someplace around ten thousand dollars an individual so let’s state hypothetically you owned a dining establishment in New york city 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 IRS so it’s substantial certainly now the huge concern is why does no one know about this because look when I first heard about this when I first met Josh you know I have actually got lots of financial investments in lots of companies I’m a major advocate for entrepreneurship in America and make numerous many investments in business owners of which numerous 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 cash 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 utilized them wisely to survive throughout the pandemic so when I heard about this I stated nah it can’t be true but when I dug around I even contacted us to my political leader buddies Governor Senators they didn’t understand 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 told me well you can’t get it due to the fact that you took the PPP also not real so let’s ask Josh why does no one know about the staff member retention credit you understand what’s fascinating you’re discussing the banks Kevin due to the fact that in the PPP loan process the federal government made it extremely 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 just process process that’s all um and here there was turmoil since remember in the original cares act you could refrain from doing both programs so if you had done PPP you could refrain from doing ERC in the original program and when they changed 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 federal government never made it clear to anyone about how to.
do this does your CFO understand how to do this not actually she or he’s never done it in the past do the banks do it nope the banks do not do it the payroll companies yeah a few of them are doing it as a payroll business your accountant no your accounting professional’s never ever done this prior to unless you have an account that entered into this company and bottom line my firm Kevin has been in business because 2009 and we’ve been working with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 business so a great deal of our huge big business clients have actually worked with bottom line to recover other government programs we’ve done sales tax and use tax unemployment tax work chance tax credits research and development tax credits unclaimed property property tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit developed to encourage.
employers to keep employees on their payroll. The credit is 50% of approximately $10,000 in wages paid by an.
company whose company is completely or partially suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
Availability.
1. The credit is offered to all employers no matter size consisting of tax exempt organizations. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) little.
organizations who take Small company Loans.
2. To qualify, the company has to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s company is fully or partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the company’s gross invoices are below 50% of the comparable quarter in 2019. As soon as the.
employer’s gross receipts go above 80% of a similar quarter in 2019 they no longer qualify.
after completion 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 qualifying earnings differs by whether a company had, on average, more or less than.
100 employees in 2019.
Business that concentrate on ERC filing assistance usually offer expertise and support to help businesses browse the intricate procedure of claiming the credit. They can offer various services, consisting of:.
How is the employee retention credit calculated? Is Employee Retention Credit For Employees Or Employers
Eligibility Assessment: These business will evaluate your service’s eligibility for the ERC based upon aspects such as your market, revenue, and operations. If you satisfy the requirements for the credit and recognize the maximum credit amount you can claim, they can assist identify.
Documents and Computation: ERC filing services will assist in collecting the essential documentation, such as payroll records and monetary statements, to support your claim. They will likewise assist calculate the credit amount based on qualified salaries and other qualifying expenses.
Retroactive Claim Review: If you are qualified to declare the ERC for prior quarters, these business can examine your past payroll records and financials to recognize potential chances for retroactive credits. They can assist you modify prior tax returns to declare these refunds.
Filing Support: Companies concentrating on ERC filings will prepare and send the necessary forms and documentation on your behalf. This consists of finishing Form 941 or any other necessary tax return.
Compliance and Updates: ERC guidelines and guidance have evolved over time. These business remain updated with the current modifications and guarantee that your filings comply with the most existing standards. If the Internal revenue service demands additional details or performs an audit associated to your ERC claim, they can likewise offer continuous assistance.
It is essential to research and vet any company offering ERC filing assistance to ensure their credibility and knowledge. Try to find recognized firms with experience in tax and payroll services, or consider connecting to relied on accounting companies or tax professionals who offer ERC submitting assistance.
Keep in mind that while these business can provide valuable help, it’s constantly a great idea to have a fundamental understanding of the ERC requirements and procedure yourself. This will assist you make notified choices and guarantee accurate filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief procedures. The goal of the ERC is to motivate companies to retain and pay their staff members throughout the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to qualified companies, including for-profit companies, tax-exempt companies, and specific governmental entities. To certify, employers should fulfill one of two requirements:.
Business operations were completely or partly suspended due to a federal government order related to COVID-19.
Business experienced a substantial decline in gross invoices. As discussed previously, 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 considerable decline is specified as a 20% decrease in gross invoices compared to the very 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 company’s share of Social Security taxes. The credit quantity amounts to a portion (approximately 70%) of certified wages paid to staff members, including certain health plan costs. The maximum credit per employee 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. 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 utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and boosted, permitting eligible employers to claim 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 income tax return and receive refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their employment income tax return, generally Kind 941. If the credit goes beyond the amount of employment taxes owed, the excess can be reimbursed to the employer.
It’s important to note that the ERC arrangements and eligibility requirements have actually evolved over time. The best strategy is to talk to a tax expert or visit the official internal revenue service site for the most comprehensive and up-to-date information relating to the ERC, consisting of any recent legal modifications or updates.
To qualify for the ERC, a business needs to meet one of the following requirements:.
Business operations were completely or partly suspended due to a federal government order related to COVID-19.
Business experienced a substantial decline in gross receipts. For 2021, a significant decrease is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decline in gross invoices compared to the right away preceding quarter.
The ERC is readily available to businesses of all sizes, including tax-exempt organizations, but there are some exceptions. For instance, federal government entities and services that received a PPP loan may have constraints on claiming the credit.
The process for claiming the ERC includes finishing the essential types and including the credit on your work tax return (normally Kind 941). The exact time it takes to process the credit can vary based on a number of elements, consisting of the intricacy of your organization and the workload of the IRS. It’s advised to consult with a tax professional for guidance specific to your situation.
There are a number of business that can help with the procedure of claiming the ERC. Some well-known business that provide help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the information supplied here is based on general understanding and might not reflect the most current updates or changes to the ERC. It is necessary to speak with a tax expert or visit the official internal revenue service site for the most precise and current information regarding eligibility, claiming treatments, and offered help.
Less than 100. If the employer had 100 or fewer staff members usually in 2019, then the credit is based.
on incomes paid to all staff members whether they really worked or not. Simply put, even if the.
staff members 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 usually in 2019, then the credit is.
allowed only for incomes paid to employees who did not work during the calendar quarter.
In both cases, “salaries” includes not simply cash payments but also a portion of the cost of company.
offered healthcare. Is Employee Retention Credit For Employees Or Employers
Payment.
Employers can be immediately repaid for the credit by decreasing the quantity of payroll taxes they.