Lets talk first about Is Employee Retention Credit Refundable :
Our group here what do these guys doing everybody in this room is helping teach individuals about ERC and uh always provide a stunning 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 business and I ‘d like to see that what is this this is uh hundreds of countless dollars actually Kevin numerous countless dollars so these are replicate copies of the letters that go to clients confirming that the check is on the way I imply you understand if you just begin 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 mean it’s just I suggest think about how many 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 IRS heading to the customer so that’s how you have the ability to track it you understand when you
receive this you understand the check is opted for sure which’s when they pay so they don’t pay anything up until they in fact get the cash they don’t pay bottom line Wonder trust anything till this letter is confirmed the check is on the way they transfer it into their bank account and they can truly rely on Wonder trust that the process has been ended up and the number of you believe you have actually processed considering that you began this we’re about 35 000 of these for
about 6 billion dollars wow so clearly they know what they’re doing which’s what you require you need specialists 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 Wonderful here you’re at my YouTube channel we’re discussing something truly essential today the worker retention credit which most of you have never heard of I definitely hadn’t heard of it up until extremely recently and discovered a lot about it because this is probably the most affordable cost of capital for any small company anywhere
anytime if you have employees in 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 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 just contact your bank manager and state provide me a loan it doesn’t 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 very soon you got to find out all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply start there so throughout the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act offered organizations three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everybody it makes a big distinction right there 2 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 just need to make sure we got that point I mean that’s a huge distinction a loan versus cash cash I like money money 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 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 staff member retention credit that person had to be a staff member so I’m going to make the Presumption this cash is not for the owner not for people on the cap table not for investors it’s for employees right you needed to have owned a service however it’s based on you having W-2 staff members in America not 10.99. so as long as you had W-2 staff members 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 six months of 2021 on the W-2 correct so there were six quarters the program was open well stroll us through the six quarters so you had quarters two three and four of 2020 and you had quarters one 2 and three of 2021. fine so that’s how it’s determined you have to be on the W-2 during that period now let’s talk my favorite part money just how much can you return per worker that was on a W-2 in those six quarters so the calculation in 2020 to be precise Kevin is 50 of the staff member’s income to a maximum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the worker’s wage to an optimum of 7 thousand per quarter how did that happen um they just changed the rules in.
2021 versus since the turmoil of the pandemic so they wished 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 approximately 5 thousand Max and after that what occurs 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 six thousand dollars per employee that is since that’s a lot of cash it is now there’s a caveat here the PPP cash would need to be lowered from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would lower the 26 000 so what we’re seeing typically Kevin is if you took PPP money somewhere around ten thousand dollars a person so let’s state hypothetically you owned a dining establishment in New York 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 internal revenue service so it’s big obviously now the huge question is why does no one know about this since look when I first heard about this when I initially met Josh you know I have actually got lots of investments in lots of companies I’m a major supporter for entrepreneurship in America and make lots of numerous financial investments in entrepreneurs of which lots of suffered through the pandemic when I first found out about this I called BS I do not 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 which were well deserved and we used them wisely to stay alive during 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 Guv Senators they didn’t understand about it I mean that’s how you know that’s how misinformation is that there’s no details out there then a lot of people informed 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 understand about the worker retention credit you know what’s fascinating you’re talking about the banks Kevin since in the PPP loan procedure the federal government made it very clear that if you desired 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 mayhem due to the fact that keep in mind in the initial cares act you could not do both programs so if you had actually done PPP you could refrain from doing ERC in the original program and when they altered 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 made it clear to anyone about how to.
do this does your CFO understand how to do this not really he or she’s never done it in the past do the banks do it nope the banks do not do it the payroll business yeah some of them are doing it as a payroll business your accountant no your accountant’s never ever done this before unless you have an account that entered into this business and bottom line my company Kevin has stayed in business considering that 2009 and we have actually been working with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 business so a lot of our big huge business clients have worked with bottom line to recuperate 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 real estate tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit designed to encourage.
employers to keep staff members on their payroll. The credit is 50% of as much as $10,000 in earnings paid by an.
Because of COVID-19 or whose gross invoices, company whose service is completely or partially suspended.
decline by more than 50%.
Schedule.
1. The credit is 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) small.
companies who take Small company Loans.
2. To qualify, the company needs to satisfy one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s business is completely or partly suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross invoices are listed below 50% of the comparable quarter in 2019. When the.
company’s gross receipts exceed 80% of a similar quarter in 2019 they no longer certify.
after the end of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the qualifying earnings paid up to $10,000 in total.
It works for salaries paid after March 13th and before December 31, 2020.
The meaning of certifying salaries differs by whether a company had, typically, more or less than.
100 staff members in 2019.
Companies that focus on ERC filing support normally offer expertise and support to assist businesses browse the complicated procedure of declaring the credit. They can use various services, including:.
How is the employee retention credit calculated? Is Employee Retention Credit Refundable
Eligibility Evaluation: These companies will evaluate your organization’s eligibility for the ERC based on aspects such as your industry, income, and operations. If you satisfy the requirements for the credit and identify the maximum credit amount you can claim, they can help identify.
Documents and Estimation: ERC filing services will help in gathering the necessary paperwork, such as payroll records and monetary statements, to support your claim. They will likewise assist determine the credit quantity based upon qualified wages and other qualifying expenses.
Retroactive Claim Review: If you are eligible to claim the ERC for previous quarters, these companies can review your past payroll records and financials to determine potential opportunities for retroactive credits. They can help you change previous income tax return to claim these refunds.
Filing Help: Companies specializing in ERC filings will prepare and send the necessary kinds and documents on your behalf. This consists of finishing Form 941 or any other required tax return.
Compliance and Updates: ERC policies and guidance have evolved gradually. These companies remain updated with the current changes and ensure that your filings comply with the most present guidelines. They can also supply ongoing assistance if the internal revenue service demands additional details or performs an audit related to your ERC claim.
It is very important to research study and veterinarian any company using ERC filing support to ensure their trustworthiness and proficiency. Look for established firms with experience in tax and payroll services, or think about connecting to relied on accounting firms or tax specialists who offer ERC submitting support.
Keep in mind that while these business can offer important help, it’s constantly an excellent idea to have a fundamental understanding of the ERC requirements and process yourself. This will help you make notified choices and make sure accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief measures. The goal of the ERC is to motivate companies to maintain and pay their workers throughout 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, including for-profit businesses, tax-exempt companies, and particular governmental entities. To qualify, employers need to meet one of two requirements:.
The business operations were totally or partially suspended due to a government order related to COVID-19.
Business experienced a significant decrease in gross invoices. As pointed out earlier, for 2021, a substantial 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 same quarter in 2019, or a 20% decline in gross invoices compared to the instantly preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount is equal to a portion (approximately 70%) of qualified wages paid to staff members, including certain 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 Defense Program (PPP) loan were not eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 enables organizations to declare the ERC even if they got a PPP loan. The very same earnings can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and enhanced, enabling qualified employers to declare the credit for certified incomes paid as far back as March 13, 2020. This retroactive arrangement provides an opportunity for organizations to change prior-year income tax return and receive refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their employment income tax return, generally Form 941. If the credit goes beyond the amount of employment taxes owed, the excess can be refunded to the employer.
It is essential to keep in mind that the ERC arrangements and eligibility requirements have progressed gradually. The very best strategy is to seek advice from a tax professional or visit the main internal revenue service website for the most detailed and up-to-date info concerning the ERC, consisting of any current legislative modifications or updates.
To receive the ERC, an organization must satisfy among the following requirements:.
Business operations were fully or partially suspended due to a government order related to COVID-19.
The business experienced a considerable decrease in gross receipts. For 2021, a significant decline is defined as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross receipts compared to the right away preceding quarter.
The ERC is readily available to organizations of all sizes, consisting of tax-exempt organizations, however there are some exceptions. For instance, government entities and companies that received a PPP loan might have constraints on claiming the credit.
The process for claiming the ERC involves completing the required types and including the credit on your work income tax return (generally Kind 941). The exact time it takes to process the credit can vary based on numerous factors, including the complexity of your service and the workload of the IRS. It’s suggested to speak with a tax professional for assistance specific to your scenario.
There are numerous business that can aid with the procedure of declaring the ERC. These consist of accounting companies, tax advisory services, and payroll provider. Some widely known business that use support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research and call these business directly to inquire about their costs and services.
Please note that the details provided here is based on general understanding and might not reflect the most recent updates or changes to the ERC. It is essential to talk to a tax professional or visit the official IRS site for the most current and accurate information regarding eligibility, declaring treatments, and offered assistance.
Less than 100. The credit is based if the employer had 100 or fewer employees on average in 2019.
on earnings paid to all employees whether they really worked or not. Simply put, even if the.
staff members worked full time and made money for full-time work, the company still gets the credit.
Greater than 100. The credit is if the company had more than 100 staff members on average in 2019.
allowed just for earnings paid to employees who did not work during the calendar quarter.
In both cases, “earnings” includes not just cash payments but also a part of the cost of company.
offered health care. Is Employee Retention Credit Refundable
Payment.
Companies can be instantly repaid for the credit by reducing the amount of payroll taxes they.