Lets talk first about Qualified Wages For The Employee Retention Credit :
Our team here what do these people doing everybody in this room is helping teach individuals about ERC and uh always provide a lovely breakfast and have people truly find out about the program we ought to head to the space 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 numerous countless dollars literally Kevin numerous millions of dollars so these are replicate copies of the letters that go to clients validating that the check is on the method I imply you understand 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 mean it’s just I imply think about the number of actual customers that went through the program yeah this is the very end this is the celebration at the end when the check is confirmed the numbers are validated and the check is on the mail in the mail from the IRS heading to the consumer so that’s how you’re able to track it you know when you
get this you understand the check is chosen sure and that’s when they pay so they don’t pay anything until they really get the cash they don’t pay bottom line Wonder trust anything till this letter is validated the check is on the method they deposit it into their bank account and they can genuinely rely on Wonder trust that the procedure has been finished and how many you believe you’ve processed because you began this we’re about 35 000 of these for
about 6 billion dollars wow so clearly they understand what they’re doing and that’s what you need 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 discussing something truly essential today the worker retention credit which most of you have actually never heard of I definitely hadn’t become aware of it until very just recently and found out a lot about it because this is most likely the most affordable expense of capital for any small business anywhere
anytime if you have employees between 5 and five hundred so I’ve got the specialist 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 challenging this isn’t like PPP we just call up 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 tell us all about it and how to get it and why I have actually ended up being 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 employee retention credit Josh Fox what is an ERC let’s simply begin there so during the Trump Administration when President Trump was enacted they created the cares Act and the cares act provided services 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 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 simply need to make sure we got that point I mean that’s a huge distinction a loan versus cash cash I like money cash that’s what we’re talking 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 lovely hard check in the mail where you get real cash from the internal revenue service all right so let’s speak about how it works since it sounds like to me if it’s a if it’s employee retention credit that individual 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 staff members right you needed to have owned a business however it’s based upon 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 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 right so there were six quarters the program was open well walk us through the 6 quarters so you had quarters 2 3 and four of 2020 and you had quarters one 2 and three of 2021. alright so that’s how it’s measured you have to be on the W-2 throughout that duration now let’s talk my favorite part money how much can you get back per employee that was on a W-2 in those 6 quarters so the computation in 2020 to be specific Kevin is 50 of the employee’s income to an optimum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers escalated to 70 of the employee’s wage to a maximum of seven thousand per quarter how did that occur um they just changed the rules in.
2021 versus due to the fact that the turmoil of the pandemic so they wanted 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 approximately 5 thousand Max and then what happens 21 000 Max in 2021 oh that’s how you come up with twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty 6 thousand dollars per worker that is because that’s a great deal of money it is now there’s a caution 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 minimize the 26 000 so what we’re seeing usually Kevin is if you took PPP cash somewhere around 10 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 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 big question is why does nobody know about this since appearance when I initially became aware of this when I first fulfilled Josh you understand I’ve got great deals of financial investments in lots of business I’m a major advocate for entrepreneurship in America and make many lots of investments in entrepreneurs of which lots of suffered through the pandemic when I initially became aware of this I called BS I don’t believe it since I utilize 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 should have and we used them carefully to survive during the pandemic so when I became aware of this I stated nah it can’t hold true but when I dug around I even contacted us to my political leader pals Guv Senators they didn’t learn about it I suggest that’s how you understand that’s how misinformation is that there’s no details out there then a lot of people told me well you can’t get it since you took the PPP likewise not true so let’s ask Josh why does no one understand about the employee retention credit you understand what’s interesting you’re speaking about 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 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 simply process process that’s all um and here there was chaos due to the fact that keep in mind in the initial 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 ever made it clear to any person about how to.
do this does your CFO understand how to do this not really she or he’s never ever done it in the past do the banks do it nope the banks do not do it the payroll business yeah a few of them are doing it as a payroll company your accounting professional no your accountant’s never ever done this before unless you have an account that went into this organization and bottom line my firm Kevin has actually been in business because 2009 and we’ve been working with the federal government and the state federal government to recuperate money for Fortune 500 Fortune 1000 companies so a great deal of our big huge corporate customers have actually dealt with bottom line to recuperate other federal government programs we’ve done sales tax and use tax joblessness tax work chance tax credits research and development tax credits unclaimed property property tax all of these other government programs.
The worker retention tax credit is a broad based refundable tax credit created to motivate.
employers to keep employees on their payroll. The credit is 50% of as much as $10,000 in wages paid by an.
Because of COVID-19 or whose gross invoices, company whose company is completely or partly suspended.
decrease by more than 50%.
1. The credit is offered to all employers despite size consisting of tax exempt companies. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) small.
services who take Small company Loans.
2. To certify, the company has to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s company is totally or partially suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross receipts are listed 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 certify.
after the end of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the certifying salaries paid up to $10,000 in overall.
It works for salaries paid after March 13th and before December 31, 2020.
The definition of certifying incomes varies by whether a company had, on average, basically than.
100 employees in 2019.
Companies that concentrate on ERC filing support generally provide competence and assistance to assist businesses browse the complicated procedure of declaring the credit. They can provide numerous services, consisting of:.
How is the employee retention credit calculated? Qualified Wages For The Employee Retention Credit
Eligibility Assessment: These companies will evaluate your company’s eligibility for the ERC based on aspects such as your market, profits, and operations. They can help determine if you meet the requirements for the credit and recognize the optimum credit quantity you can claim.
Documentation and Computation: ERC filing services will help in collecting the essential documents, such as payroll records and financial declarations, to support your claim. They will also help compute the credit amount based on eligible wages and other certifying costs.
Retroactive Claim Review: If you are qualified to declare the ERC for previous quarters, these companies can review your previous payroll records and financials to determine potential chances for retroactive credits. They can help you modify previous income tax return to declare these refunds.
Filing Assistance: Business focusing on ERC filings will prepare and submit the essential types and documents on your behalf. This consists of completing Kind 941 or any other required tax return.
Compliance and Updates: ERC guidelines and guidance have developed in time. These business remain upgraded with the most recent changes and make sure that your filings abide by the most current guidelines. If the IRS demands extra details or performs an audit associated to your ERC claim, they can also offer ongoing support.
It is essential to research study and veterinarian any company offering ERC filing support to ensure their trustworthiness and competence. Search for established companies with experience in tax and payroll services, or consider reaching out to trusted accounting companies or tax experts who provide ERC submitting assistance.
Bear in mind that while these business can provide valuable help, it’s constantly a great concept to have a fundamental understanding of the ERC requirements and process yourself. This will assist you make informed decisions and make sure precise 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 steps. The objective of the ERC is to encourage companies to maintain and pay their workers during the pandemic, even if their operations have been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to qualified employers, consisting of for-profit businesses, tax-exempt companies, and particular governmental entities. To qualify, employers must satisfy one of two requirements:.
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 pointed out earlier, for 2021, a considerable decrease is defined as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity amounts to a portion (as much as 70%) of qualified salaries paid to staff members, including specific health plan expenditures. 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, organizations that got an Income Security Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 allows companies to declare the ERC even if they got a PPP loan. Nevertheless, the very same salaries can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and enhanced, enabling eligible employers to claim the credit for qualified earnings paid as far back as March 13, 2020. This retroactive provision provides an opportunity for services to change prior-year income tax return and get refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their work tax returns, usually Form 941. If the credit exceeds the quantity of employment taxes owed, the excess can be reimbursed to the employer.
It is essential to note that the ERC provisions and eligibility requirements have actually progressed over time. The very best course of action is to speak with a tax expert or go to the main internal revenue service website for the most in-depth and updated information relating to the ERC, consisting of any recent legal changes or updates.
To receive the ERC, an organization must fulfill one of the following requirements:.
The business operations were fully or partly suspended due to a federal government order related to COVID-19.
The business experienced a significant decrease in gross receipts. For 2021, a substantial decline is specified as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a substantial decline is specified as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decrease in gross receipts compared to the immediately preceding quarter.
The ERC is readily available to organizations of all sizes, consisting of tax-exempt companies, but there are some exceptions. For instance, federal government entities and organizations that received a PPP loan may have restrictions on claiming the credit.
The process for declaring the ERC involves finishing the needed types and including the credit on your work tax return (normally Type 941). The exact time it takes to process the credit can differ based upon a number of aspects, including the complexity of your company and the workload of the IRS. It’s recommended to talk to a tax professional for assistance particular to your situation.
There are a number of business that can assist with the process of declaring the ERC. Some widely known companies that provide help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the information offered here is based upon general understanding and may not show the most current updates or changes to the ERC. It is necessary to consult with a tax professional or visit the official internal revenue service site for the most current and precise info relating to eligibility, claiming treatments, and available help.
Less than 100. The credit is based if the employer had 100 or less employees on average in 2019.
on incomes paid to all employees whether they in fact worked or not. In other words, even if the.
staff members worked full time and made money for full time work, the employer still gets the credit.
Greater than 100. If the employer had more than 100 staff members usually in 2019, then the credit is.
enabled only for incomes paid to workers who did not work throughout the calendar quarter.
In both cases, “incomes” consists of not just money payments but also a part of the cost of company.
offered healthcare. Qualified Wages For The Employee Retention Credit
Employers can be right away repaid for the credit by decreasing the amount of payroll taxes they.