Lets talk first about Recovery Startup Business Employee Retention Credit :
Our team here what do these men doing everyone in this space is helping teach individuals about ERC and uh always provide a stunning breakfast and have people really find out about the program we need to head to the space where we are able 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 hundreds of countless dollars literally Kevin hundreds of countless dollars so these are replicate copies of the letters that go to clients confirming that the check is on the method I imply you know if you just start to take a look at a few of these here I indicate this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I mean it’s just I suggest consider 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 confirmed 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 know when you
receive this you know the check is opted for sure which’s when they pay so they do not pay anything until they really get the money they do not pay bottom line Wonder trust anything until this letter is confirmed the check is on the method they deposit it into their checking account and they can truly rely on Wonder trust that the process has 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 6 billion dollars wow so plainly they understand what they’re doing which’s what you need 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 Terrific here you’re at my YouTube channel we’re talking about something truly essential today the employee retention credit which the majority of you have never become aware of I certainly had not heard of it up until extremely just recently and discovered a lot about it because this is probably the lowest cost of capital for any small business anywhere
anytime if you have employees in between five and five hundred so I’ve got the professional 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 not easy this isn’t like PPP we just 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 have actually ended up being yes the Ambassador and paid representative for this I love this program it’s going away 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 throughout the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act used services 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everyone 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.
correct the cash money payroll tax refund okay go on sorry I just have to make certain we got that point I imply that’s a huge distinction a loan versus money money I like money cash 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 lovely tough check in the mail where you get real cash from the internal revenue service all right so let’s talk about how it works since it seems like to me if it’s a if it’s employee retention credit that individual needed to be a worker 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 workers right you had to have actually owned a service however it’s based on you having W-2 workers 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 need to be on payroll in 2020 on the W-2 and you have to be on payroll for the first 6 months of 2021 on the W-2 appropriate so there were 6 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 two and 3 of 2021. okay 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 employee that was on a W-2 in those six quarters so the calculation in 2020 to be specific Kevin is 50 of the staff member’s wage to a maximum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the worker’s salary to a maximum of 7 thousand per quarter how did that occur um they just altered 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 five thousand Max and then what happens 21 000 Max in 2021 oh that’s how you develop twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty 6 thousand dollars per employee that is because that’s a lot of cash it is now there’s a caveat here the PPP cash would need to be decreased from the twenty 6 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 ten thousand dollars an individual 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 IRS so it’s huge clearly now the huge concern is why does no one learn about this because look when I initially found out about this when I first met Josh you understand I have actually got great deals of investments in great deals of business I’m a significant advocate for entrepreneurship in America and make numerous many financial investments in business owners of which lots of suffered through the pandemic when I initially heard about this I called BS I do not think it because I use the PPP we went through the money center Banks to get it it was very easy to do we had our CEOs call the banks they got their loans and that were well should have and we used them carefully to survive during 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 politician good friends Guv Senators they didn’t know about it I suggest that’s how you know 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 know about the staff member retention credit you know what’s fascinating you’re discussing the banks Kevin due to the fact that in the PPP loan process the federal government made it very 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 procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply process procedure that’s all um and here there was turmoil since keep in mind in the original cares act you might refrain from doing both programs so if you had actually done PPP you could not do 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 any person about how to.
do this does your CFO know how to do this not actually 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 company your accounting professional no your accountant’s never done this prior to unless you have an account that went into this service and bottom line my company Kevin has actually been in business given that 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 big huge corporate clients have actually worked with bottom line to recuperate other government programs we’ve done sales tax and use tax unemployment tax work chance tax credits research and development tax credits unclaimed property real estate tax all of these other federal government programs.
The staff member retention tax credit is a broad based refundable tax credit designed to encourage.
employers to keep workers on their payroll. The credit is 50% of approximately $10,000 in salaries paid by an.
company whose service is totally or partly suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
1. The credit is readily available to all companies no matter size including 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 company’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 invoices are below 50% of the similar quarter in 2019. When the.
company’s gross invoices go above 80% of an equivalent quarter in 2019 they no longer qualify.
after the end of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the qualifying wages paid up to $10,000 in overall.
It works for salaries paid after March 13th and prior to December 31, 2020.
The meaning of qualifying salaries varies by whether an employer had, on average, more or less than.
100 employees in 2019.
Business that specialize in ERC filing assistance generally offer know-how and support to assist organizations navigate the intricate procedure of claiming the credit. They can offer various services, consisting of:.
How is the employee retention credit calculated? Recovery Startup Business Employee Retention Credit
Eligibility Assessment: These companies will examine your company’s eligibility for the ERC based upon factors such as your market, revenue, and operations. They can assist figure out if you meet the requirements for the credit and identify the maximum credit quantity you can claim.
Documents and Calculation: ERC filing services will help in gathering the necessary documents, such as payroll records and financial statements, to support your claim. They will likewise assist compute the credit amount based on qualified earnings and other qualifying expenditures.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for previous quarters, these business can evaluate your previous payroll records and financials to recognize potential chances for retroactive credits. They can assist you change previous income tax return to claim these refunds.
Filing Assistance: Business concentrating on ERC filings will prepare and send the essential forms and paperwork on your behalf. This includes finishing Form 941 or any other required tax return.
Compliance and Updates: ERC regulations and guidance have actually evolved gradually. These companies stay updated with the current modifications and make sure that your filings comply with the most current standards. They can also offer continuous assistance if the internal revenue service demands additional details or conducts an audit related to your ERC claim.
It’s important to research and veterinarian any business providing ERC filing support to ensure their trustworthiness and knowledge. Try to find established companies with experience in tax and payroll services, or consider reaching out to trusted accounting firms or tax professionals who offer ERC submitting support.
Remember that while these companies can offer important help, it’s always a great concept to have a fundamental understanding of the ERC requirements and process yourself. This will help you make notified decisions and make sure precise filings.
The Worker 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 motivate businesses to maintain and pay their workers during the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to qualified employers, consisting of for-profit services, tax-exempt companies, and specific governmental entities. To qualify, employers need to satisfy one of two criteria:.
Business operations were totally or partially suspended due to a government order related to COVID-19.
The business experienced a substantial decrease in gross receipts. As discussed previously, for 2021, a considerable decrease is defined as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decline 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.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount amounts to a portion (as much as 70%) of certified earnings paid to staff members, including specific health plan expenses. The optimum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, services that got an Income Security Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 permits companies to claim the ERC even if they got a PPP loan. The same incomes can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and enhanced, allowing qualified employers to claim the credit for certified earnings paid as far back as March 13, 2020. This retroactive provision provides an opportunity for businesses to amend prior-year income tax return and get refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their employment tax returns, typically Form 941. The excess can be reimbursed to the employer if the credit surpasses the amount of work taxes owed.
It is very important to keep in mind that the ERC arrangements and eligibility requirements have evolved with time. The best strategy is to consult with a tax expert or visit the official internal revenue service site for the most detailed and updated details relating to the ERC, including any recent legal modifications or updates.
To receive the ERC, an organization needs to fulfill one of the following criteria:.
Business operations were completely or partially suspended due to a federal government order related to COVID-19.
The business experienced a significant decrease in gross receipts. For 2021, a significant decline is specified as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decline in gross receipts 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 example, federal government entities and organizations that received a PPP loan may have constraints on claiming the credit.
The process for claiming the ERC involves completing the needed kinds and consisting of the credit on your employment income tax return (normally Form 941). The exact time it requires to process the credit can differ based upon numerous aspects, consisting of the intricacy of your company and the work of the internal revenue service. It’s recommended to consult with a tax expert for assistance specific to your circumstance.
There are several business that can assist with the process of claiming the ERC. These consist of accounting companies, tax advisory services, and payroll company. Some well-known companies that offer assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research and get in touch with these companies directly to ask about their services and fees.
Please note that the details offered here is based upon basic understanding and may not reflect the most current updates or modifications to the ERC. It’s important to talk to a tax professional or visit the main internal revenue service site for the most precise and current information regarding eligibility, declaring procedures, and available assistance.
Less than 100. If the employer had 100 or less employees on average in 2019, then the credit is based.
on incomes paid to all staff members whether they actually worked or not. To put it simply, even if the.
workers worked full-time and earned money for full-time work, the employer still gets the credit.
Greater than 100. If the employer had more than 100 employees on average in 2019, then the credit is.
enabled only for earnings paid to workers who did not work during the calendar quarter.
In both cases, “salaries” consists of not just cash payments however also a part of the cost of employer.
offered health care. Recovery Startup Business Employee Retention Credit
Employers can be instantly reimbursed for the credit by lowering the quantity of payroll taxes they.