Lets talk first about Is Employee Retention Credit Refund Taxable :
Our group here what do these people doing everybody in this space is assisting teach individuals about ERC and uh always supply a beautiful breakfast and have individuals truly discover the program we ought to head to the space where we have the ability 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 numerous millions of dollars literally Kevin numerous countless dollars so these are replicate copies of the letters that go to clients verifying that the check is on the way I mean you understand if you simply begin to take a 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 mean it’s simply I indicate 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 confirmed and the check is on the mail in the mail from the internal revenue service heading to the client so that’s how you’re able to track it you know when you
receive this you understand the check is opted for sure and that’s when they pay so they don’t pay anything till they really receive the cash they don’t pay bottom line Wonder trust anything till 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 been finished and how many you think you’ve processed because you started this we have to do with 35 000 of these for
about six billion dollars wow so clearly they know what they’re doing which’s what you require 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 Fantastic here you’re at my YouTube channel we’re talking about something actually essential today the worker retention credit which the majority of you have actually never ever become aware of I definitely had not heard of it until very recently and discovered a lot about it since this is most likely the most affordable cost of capital for any small business anywhere
anytime if you have workers between five 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 largest processor of these ERC credits this is a 170 page program so it’s challenging this isn’t like PPP we simply call your bank supervisor and state give 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 become yes the Ambassador and paid spokesperson for this I enjoy this program it’s going away very soon you got to discover everything 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 3 opportunities 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 precisely so the ERC is a refund that’s.
fix the money money payroll tax refund all right go on sorry I simply need to ensure we got that point I imply that’s a big difference a loan versus money money I like cash money 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 original cares Act is the ERC and yes Kevin it is a beautiful tough check in the mail where you get actual cash from the internal revenue service all right so let’s discuss how it works due to the fact that it sounds like to me if it’s a if it’s staff member retention credit that person needed to be an employee 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 staff members right you had to have actually owned a business however it’s based on you having W-2 staff members 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 first 6 months of 2021 on the W-2 appropriate so there were six quarters the program was open well stroll us through the six quarters so you had quarters 2 three and four of 2020 and you had quarters one 2 and three of 2021. okay so that’s how it’s measured you need to be on the W-2 throughout that duration now let’s talk my preferred part cash just how much can you get back per staff member that was on a W-2 in those six quarters so the estimation in 2020 to be exact Kevin is 50 of the staff member’s income to a maximum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s salary to an optimum of 7 thousand per quarter how did that take place um they simply changed the rules in.
2021 versus since the chaos 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 as much as 5 thousand Max and after that what occurs 21 000 Max in 2021 oh that’s how you come up with twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty six thousand dollars per employee that is because that’s a lot of money it is now there’s a caveat here the PPP cash would have to be minimized from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would reduce 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 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 huge certainly now the big question is why does nobody understand about this since appearance when I first found out about this when I first met Josh you understand I have actually got lots of investments in lots of business I’m a major supporter for entrepreneurship in America and make lots of lots of investments in entrepreneurs of which many suffered through the pandemic when I first heard about this I called BS I don’t think it due to the fact that I utilize 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 utilized them wisely to survive during the pandemic so when I found out about this I stated nah it can’t hold true but when I dug around I even called to my politician good friends Governor Senators they didn’t know about it I imply that’s how you understand that’s how misinformation is that there’s no information out there then a lot of people informed me well you can’t get it since you took the PPP likewise not real so let’s ask Josh why does nobody understand about the staff member retention credit you understand what’s intriguing you’re discussing the banks Kevin because 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 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 just procedure process that’s all um and here there was mayhem since remember in the initial cares act you might not do both programs so if you had actually done PPP you could not do ERC in the initial program and when they altered the law in 2021 the banks were refraining from doing ERC due to the fact that it’s not alone so you’re getting a tax refund so the government never made it clear to anybody about how to.
do this does your CFO know how to do this not truly he or she’s never done it previously 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 company 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 actually stayed in business because 2009 and we’ve been dealing with the federal government and the state federal government to recuperate cash for Fortune 500 Fortune 1000 business so a lot of our huge huge business clients have actually dealt with bottom line to recover other federal government programs we’ve done sales tax and use tax unemployment tax work opportunity 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 created to motivate.
companies to keep employees on their payroll. The credit is 50% of up to $10,000 in earnings paid by an.
Because of COVID-19 or whose gross invoices, employer whose service is completely or partly suspended.
decline by more than 50%.
1. The credit is readily available to all companies no matter size consisting of tax exempt organizations. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
organizations who take Small company Loans.
2. To certify, the employer needs to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s company is completely or partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the company’s gross receipts are below 50% of the equivalent quarter in 2019. When the.
company’s gross invoices go above 80% of a similar quarter in 2019 they no longer certify.
after completion of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the certifying incomes paid up to $10,000 in total.
It works for salaries paid after March 13th and before December 31, 2020.
The definition of certifying incomes varies by whether an employer had, typically, basically than.
100 staff members in 2019.
Companies that concentrate on ERC filing support generally supply know-how and assistance to help services navigate the complicated procedure of claiming the credit. They can use numerous services, including:.
How is the employee retention credit calculated? Is Employee Retention Credit Refund Taxable
Eligibility Assessment: These business will evaluate your business’s eligibility for the ERC based on elements such as your market, profits, and operations. They can help identify if you satisfy the requirements for the credit and identify the maximum credit quantity you can declare.
Documents and Calculation: ERC filing services will help in collecting the required documents, such as payroll records and financial statements, to support your claim. They will likewise help determine the credit amount based upon qualified salaries and other qualifying costs.
Retroactive Claim Review: If you are qualified to claim the ERC for previous quarters, these business can review your previous payroll records and financials to recognize possible opportunities for retroactive credits. They can help you modify prior income tax return to claim these refunds.
Filing Help: Business specializing in ERC filings will prepare and send the essential forms and documentation in your place. This includes completing Kind 941 or any other required tax forms.
Compliance and Updates: ERC guidelines and assistance have developed in time. These business remain updated with the latest modifications and guarantee that your filings abide by the most current standards. They can also supply ongoing assistance if the IRS demands extra info or conducts an audit related to your ERC claim.
It is very important to research and vet any company providing ERC filing assistance to guarantee their credibility and know-how. Try to find recognized companies with experience in tax and payroll services, or think about reaching out to relied on accounting firms or tax professionals who use ERC filing assistance.
Bear in mind that while these companies can offer valuable assistance, it’s constantly a good idea to have a fundamental understanding of the ERC requirements and procedure yourself. This will assist you make notified decisions and make sure accurate filings.
The Worker Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief procedures. The objective of the ERC is to encourage businesses to keep 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 offered to eligible employers, consisting of for-profit organizations, tax-exempt companies, and specific governmental entities. To certify, employers should satisfy one of two criteria:.
The business operations were completely or partly suspended due to a federal government order related to COVID-19.
Business experienced a considerable decline in gross receipts. As discussed previously, for 2021, a considerable decline is specified as a 20% decline in gross invoices 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 exact same quarter in 2019, or a 20% decrease in gross receipts compared to the right away preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount is equal to a percentage (up to 70%) of qualified salaries paid to staff members, consisting of specific 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: At first, businesses that received a Paycheck Defense Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 enables organizations to claim the ERC even if they received a PPP loan. The very same incomes can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and boosted, enabling eligible companies to declare the credit for certified incomes paid as far back as March 13, 2020. This retroactive provision supplies a chance for businesses to modify prior-year tax returns and receive refunds.
Claiming the Credit: Employers can claim 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 refunded to the employer.
It is very important to keep in mind that the ERC provisions and eligibility requirements have evolved with time. The best course of action is to seek advice from a tax professional or check out the official internal revenue service site for the most comprehensive and updated information relating to the ERC, including any current legal changes or updates.
To qualify for the ERC, a business must satisfy among the following requirements:.
Business operations were completely or partially suspended due to a federal government order related to COVID-19.
The business experienced a considerable decline in gross receipts. For 2021, a substantial decrease is specified as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
The ERC is available to organizations of all sizes, including tax-exempt organizations, but there are some exceptions. For example, federal government entities and organizations that received a PPP loan may have constraints on claiming the credit.
The process for declaring the ERC involves completing the essential forms and consisting of the credit on your work tax return (generally Form 941). The exact time it requires to process the credit can differ based upon numerous factors, consisting of the complexity of your business and the workload of the IRS. It’s advised to seek advice from a tax expert for guidance specific to your scenario.
There are numerous business that can help with the procedure of claiming the ERC. Some widely known business that provide help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the information provided here is based upon basic knowledge and might not show the most current updates or modifications to the ERC. It is necessary to talk to a tax professional or visit the main IRS website for the most up-to-date and accurate information relating to eligibility, declaring treatments, and offered assistance.
Less than 100. The credit is based if the company had 100 or fewer staff members on average in 2019.
on wages paid to all employees whether they actually worked or not. Simply put, even if the.
employees worked full time and earned money for full time work, the employer still gets the credit.
Greater than 100. The credit is if the company had more than 100 employees on average in 2019.
allowed just for wages paid to staff members who did not work throughout the calendar quarter.
In both cases, “incomes” includes not simply money payments but also a part of the cost of company.
supplied healthcare. Is Employee Retention Credit Refund Taxable
Employers can be instantly compensated for the credit by decreasing the amount of payroll taxes they.