Lets talk first about Qualified Wages For Purposes Of The Employee Retention Credit :
Our group here what do these people doing everyone in this room is helping teach individuals about ERC and uh constantly provide a lovely breakfast and have individuals actually find out about 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 want to see that what is this this is uh hundreds of countless 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 imply you know if you just begin to take a look at some of these here I indicate this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s just I suggest consider the number of real clients that went through the program yeah this is the very end this is the party at the end when the check is validated 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 have the ability to track it you understand when you
get this you understand the check is opted for sure and that’s when they pay so they do not pay anything till they in fact get the money they don’t pay bottom line Wonder trust anything till this letter is validated the check is on the method they transfer it into their bank account and they can genuinely rely on Wonder trust that the process has actually been finished and the number of you believe you’ve processed considering that you began 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 Terrific here you’re at my YouTube channel we’re talking about something truly essential today the worker retention credit which most of you have never heard of I definitely had not heard of it till really just recently and found out a lot about it due to the fact that this is probably the lowest expense of capital for any small company anywhere
anytime if you have staff members in between five and five hundred so I have actually got the specialist 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 phone 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 inform us all about it and how to get it and why I’ve become yes the Ambassador and paid representative for this I love this program it’s disappearing very soon you got to learn everything about it let’s talk employee retention credit Josh Fox what is an ERC let’s just start there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act used businesses three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everybody it makes a huge difference right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
remedy the cash cash payroll tax refund okay go on sorry I simply have to make sure we got that point I indicate that’s a huge difference a loan versus money cash I like cash cash that’s what we’re talking about fine 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 cash from the internal revenue service all right so let’s discuss how it works due to the fact that it seems like to me if it’s a if it’s worker retention credit that person needed to be a staff member so I’m going to make the Presumption this money is not for the owner not for individuals on the cap table not for investors it’s for staff members right you needed to have owned an organization however it’s based on you having W-2 employees in America not 10.99. As long as you had W-2 workers 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 very first six months of 2021 on the W-2 correct so there were 6 quarters the program was open well stroll us through the 6 quarters so you had quarters 2 3 and four of 2020 and you had quarters one two and three of 2021. fine so that’s how it’s measured you need to be on the W-2 throughout that period now let’s talk my favorite part money just how much can you return per employee that was on a W-2 in those 6 quarters so the estimation in 2020 to be specific Kevin is 50 of the staff member’s wage to an optimum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the worker’s income to a maximum of 7 thousand per quarter how did that take place um they simply altered the rules in.
2021 versus due to the fact that 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 as much as five 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 staff member that is because that’s a great deal of cash it is now there’s a caveat here the PPP money would need to be decreased 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 on average Kevin is if you took PPP cash someplace around 10 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 staff members and you took PPP money you would still get a million dollar in the mail from the internal revenue service so it’s substantial clearly now the big concern is why does nobody learn about this since look when I initially found out about this when I initially met Josh you know I have actually got great deals of investments in lots of business I’m a major advocate for entrepreneurship in America and make lots of many investments in business owners of which lots of suffered through the pandemic when I first found out about this I called BS I don’t think it because 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 should have and we used them sensibly to stay alive throughout the pandemic so when I became aware of this I said nah it can’t be true but when I dug around I even called to my political leader buddies Governor Senators they didn’t learn about it I suggest that’s how you know that’s how misinformation is that there’s no details out there then a bunch of individuals informed me well you can’t get it since you took the PPP also not real so let’s ask Josh why does nobody know about the worker retention credit you understand what’s interesting you’re talking about the banks Kevin because 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 nation and they would process procedure 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 chaos due to the fact that remember in the initial cares act you might refrain from doing both programs so if you had actually done PPP you could refrain from doing ERC in the original program and when they changed the law in 2021 the banks were not doing ERC since 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 know how to do this not really she or he’s never done it before do the banks do it nope the banks don’t do it the payroll business yeah a few of them are doing it as a payroll company your accountant no your accountant’s never done this before unless you have an account that entered into this company and bottom line my company Kevin has actually been in business because 2009 and we’ve been dealing with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 business so a great deal of our huge big corporate customers have dealt with bottom line to recover other federal government programs we have actually done sales tax and utilize tax unemployment tax work chance tax credits research and development tax credits unclaimed property real estate 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 workers on their payroll. The credit is 50% of approximately $10,000 in wages paid by an.
employer whose organization is fully or partly suspended because of COVID-19 or whose gross invoices.
decrease by more than 50%.
Availability.
1. The credit is available to all companies no matter size including tax exempt organizations. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) little.
services who take Small Business Loans.
2. To qualify, the company needs to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s business 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.
employer’s gross receipts go above 80% of an equivalent 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 qualifying salaries paid up to $10,000 in overall.
It works for wages paid after March 13th and prior to December 31, 2020.
The meaning of certifying wages varies by whether an employer had, usually, more or less than.
100 employees in 2019.
Business that concentrate on ERC filing help normally provide know-how and assistance to assist organizations navigate the intricate process of declaring the credit. They can offer different services, consisting of:.
How is the employee retention credit calculated? Qualified Wages For Purposes Of The Employee Retention Credit
Eligibility Evaluation: These companies will assess your business’s eligibility for the ERC based upon aspects such as your industry, income, and operations. They can help identify if you meet the requirements for the credit and determine the maximum credit amount you can declare.
Documents and Calculation: ERC filing services will help in collecting the essential paperwork, such as payroll records and financial statements, to support your claim. They will likewise assist calculate the credit quantity based upon eligible wages and other qualifying expenses.
Retroactive Claim Review: If you are eligible to declare the ERC for prior quarters, these business can evaluate your previous payroll records and financials to recognize possible opportunities for retroactive credits. They can help you modify prior income tax return to declare these refunds.
Filing Assistance: Business focusing on ERC filings will prepare and submit the essential forms and documentation on your behalf. This includes finishing Form 941 or any other required tax forms.
Compliance and Updates: ERC guidelines and assistance have developed in time. These companies remain updated with the most recent modifications and ensure that your filings comply with the most present standards. They can likewise supply continuous assistance if the internal revenue service requests additional information or carries out an audit related to your ERC claim.
It is very important to research and veterinarian any business offering ERC filing help to guarantee their trustworthiness and expertise. Look for established companies with experience in tax and payroll services, or think about connecting to relied on accounting companies or tax specialists who offer ERC filing assistance.
Keep in mind that while these companies can supply important help, it’s constantly an excellent idea to have a basic understanding of the ERC requirements and process yourself. This will assist you make notified choices and make sure precise 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 encourage organizations to maintain and pay their employees during the pandemic, even if their operations have actually been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to qualified employers, consisting of for-profit companies, tax-exempt organizations, and certain governmental entities. To qualify, employers must fulfill one of two criteria:.
The business operations were totally or partly suspended due to a government order related to COVID-19.
The business experienced a significant decrease in gross receipts. As discussed previously, for 2021, a considerable decrease is defined as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decline 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 portion (up to 70%) of certified incomes paid to staff members, including specific health insurance expenses. 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, companies that received an Income Defense Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 permits businesses to declare the ERC even if they received a PPP loan. Nevertheless, the same wages can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and enhanced, permitting qualified employers to declare the credit for certified earnings paid as far back as March 13, 2020. This retroactive arrangement offers a chance for companies to change prior-year tax returns and receive refunds.
Declaring the Credit: Employers can declare the ERC by reporting it on their work income tax return, usually Type 941. If the credit exceeds the quantity of employment taxes owed, the excess can be reimbursed to the employer.
It is very important to keep in mind that the ERC arrangements and eligibility requirements have actually evolved over time. The best course of action is to seek advice from a tax professional or check out the official IRS site for the most in-depth and up-to-date information relating to the ERC, including any current legislative changes or updates.
To qualify for the ERC, an organization needs to meet among the following criteria:.
The business operations were totally or partly suspended due to a government order related to COVID-19.
Business experienced a substantial decline in gross receipts. For 2021, a substantial decline is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decrease is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decrease 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. Government entities and companies that received a PPP loan may have limitations on claiming the credit.
The procedure for claiming the ERC includes completing the essential types and including the credit on your employment tax return (typically Type 941). The exact time it takes to process the credit can vary based upon a number of factors, consisting of the complexity of your company and the work of the IRS. It’s advised to seek advice from a tax professional for guidance particular to your scenario.
There are several business that can help with the procedure of declaring the ERC. These include accounting companies, tax advisory services, and payroll service providers. Some well-known business that use assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research and contact these companies straight to inquire about their services and fees.
Please note that the information supplied here is based on general knowledge and might not show the most recent updates or changes to the ERC. It’s important to seek advice from a tax expert or visit the main internal revenue service website for the most current and accurate details relating to eligibility, claiming procedures, and readily available support.
Less than 100. If the employer had 100 or fewer workers usually in 2019, then the credit is based.
on earnings paid to all employees whether they really worked or not. To put it simply, even if the.
staff members worked full time and earned money for full time work, the employer still gets the credit.
Greater than 100. The credit is if the employer had more than 100 staff members on average in 2019.
allowed just for salaries paid to employees who did not work during the calendar quarter.
In both cases, “salaries” consists of not simply money payments however likewise a portion of the expense of employer.
supplied healthcare. Qualified Wages For Purposes Of The Employee Retention Credit
Payment.
Employers can be immediately compensated for the credit by minimizing the quantity of payroll taxes they.