Lets talk first about Refundable Vs Nonrefundable Portion Of Employee Retention Credit :
Our team here what do these men doing everyone in this room is assisting teach individuals about ERC and uh always offer a lovely breakfast and have individuals truly find out about the program we need 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 hundreds of millions of dollars literally Kevin numerous countless dollars so these are duplicate copies of the letters that go to clients validating that the check is on the method I mean you understand if you simply start to 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 indicate it’s just I imply consider how many actual clients 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 verified 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
get this you understand the check is opted for sure which’s when they pay so they do not pay anything up until they in fact receive the cash they do not pay bottom line Wonder trust anything until this letter is verified the check is on the way they deposit it into their checking account and they can really rely on Wonder trust that the process has actually been finished and the number of you think you’ve processed because you started this we’re about 35 000 of these for
about six billion dollars wow so plainly they know what they’re doing which’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 talking about something actually essential today the worker retention credit which most of you have never ever become aware of I definitely had not become aware of it until really just recently and found out a lot about it due to the fact that this is most likely the lowest cost of capital for any small business anywhere
anytime if you have staff members in between five and five hundred so I have actually got the professional with me this is Josh Fox he’s the founder and CEO of bottom line Concepts they’re the largest processor of these ERC credits this is a 170 page program so it’s hard this isn’t like PPP we just call your bank manager and say give 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 love this program it’s disappearing soon you got to learn everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply begin there so throughout 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 nearly everybody it makes a big difference right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
fix the money money payroll tax refund alright go on sorry I simply have to make certain we got that point I imply that’s a huge difference a loan versus cash cash I like money money that’s what we’re discussing 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 lovely hard check in the mail where you get actual money from the internal revenue service all right so let’s discuss how it works because it sounds like to me if it’s a if it’s staff member retention credit that individual needed to be a staff member so I’m going to make the Presumption this cash is not for the owner not for individuals on the cap table not for shareholders it’s for employees right you had to have owned an organization but it’s based on you having W-2 employees in America not 10.99. so 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 need 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 two three and four of 2020 and you had quarters one 2 and three of 2021. okay so that’s how it’s determined you have to be on the W-2 throughout that duration now let’s talk my favorite part money how much can you return per worker that was on a W-2 in those 6 quarters so the estimation in 2020 to be exact Kevin is 50 of the employee’s salary to an optimum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the staff member’s wage to an optimum of seven thousand per quarter how did that happen um they simply altered the rules in.
2021 versus because the mayhem 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 after that what takes place 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 staff member that is because that’s a lot of money it is now there’s a caveat here the PPP cash would have to be reduced from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would decrease the 26 000 so what we’re seeing on average Kevin is if you took PPP money somewhere around 10 thousand dollars an individual so let’s say 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 obviously now the huge question is why does nobody know about this because look when I first heard about this when I first satisfied Josh you understand I have actually got great deals of financial investments in great deals of companies I’m a major supporter for entrepreneurship in America and make lots of lots of financial investments in entrepreneurs of which many suffered through the pandemic when I first heard about this I called BS I do not believe 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 which were well deserved and we used them carefully to stay alive throughout the pandemic so when I heard about this I stated nah it can’t be true but when I dug around I even called to my politician friends Governor Senators they didn’t learn about it I indicate 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 due to the fact that you took the PPP likewise not true so let’s ask Josh why does nobody learn about the staff member retention credit you understand what’s fascinating you’re speaking 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 nation and they would process procedure 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 since keep in mind in the original cares act you could not do both programs so if you had actually done PPP you might refrain from doing ERC in the initial 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 federal government never ever made it clear to anybody about how to.
do this does your CFO know how to do this not actually she or he’s never ever done it before 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 before unless you have an account that entered into this service and bottom line my company Kevin has been in business considering that 2009 and we have actually been working with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 business so a great deal of our big big corporate customers have actually dealt with bottom line to recover 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 federal government programs.
The staff member retention tax credit is a broad based refundable tax credit designed to encourage.
employers to keep employees on their payroll. The credit is 50% of up to $10,000 in salaries paid by an.
Because of COVID-19 or whose gross receipts, employer whose business is fully or partially suspended.
decline by more than 50%.
1. The credit is offered to all employers no matter size including tax exempt companies. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) little.
businesses who take Small Business Loans.
2. To qualify, the employer needs to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s business is totally or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross receipts are below 50% of the equivalent quarter in 2019. When the.
company’s gross receipts exceed 80% of a comparable 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 incomes paid up to $10,000 in overall.
It works for wages paid after March 13th and before December 31, 2020.
The definition of qualifying wages differs by whether an employer had, usually, basically than.
100 staff members in 2019.
Business that focus on ERC filing assistance typically provide competence and assistance to assist organizations navigate the complex procedure of claiming the credit. They can use different services, including:.
How is the employee retention credit calculated? Refundable Vs Nonrefundable Portion Of Employee Retention Credit
Eligibility Evaluation: These business will assess your company’s eligibility for the ERC based upon aspects such as your market, revenue, and operations. If you satisfy the requirements for the credit and recognize the optimum credit amount you can declare, they can assist identify.
Paperwork and Computation: ERC filing services will assist in gathering the necessary paperwork, such as payroll records and financial statements, to support your claim. They will likewise assist calculate the credit amount based upon eligible salaries and other qualifying expenses.
Retroactive Claim Review: If you are eligible to claim the ERC for previous quarters, these companies can review your previous payroll records and financials to recognize potential chances for retroactive credits. They can help you modify prior income tax return to claim these refunds.
Filing Support: Companies specializing in ERC filings will prepare and send the needed types and documentation in your place. This consists of finishing Form 941 or any other necessary tax forms.
Compliance and Updates: ERC guidelines and assistance have actually progressed over time. These companies stay updated with the most recent changes and ensure that your filings abide by the most current standards. They can also provide continuous support if the IRS requests extra info or conducts an audit related to your ERC claim.
It is very important to research study and veterinarian any business using ERC filing assistance to guarantee their reliability and proficiency. Search for established firms with experience in tax and payroll services, or consider reaching out to trusted accounting firms or tax experts who offer ERC submitting support.
Keep in mind that while these companies can offer important support, it’s always an excellent concept to have a basic understanding of the ERC requirements and procedure yourself. This will assist you make informed decisions and ensure accurate filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief procedures. The goal of the ERC is to motivate services to maintain and pay their workers throughout the pandemic, even if their operations have been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to eligible companies, including for-profit services, tax-exempt organizations, and specific governmental entities. To qualify, companies should meet one of two criteria:.
Business operations were fully or partly suspended due to a government order related to COVID-19.
The business experienced a significant decrease in gross receipts. As mentioned previously, for 2021, a substantial decline is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decline 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 portion (as much as 70%) of certified salaries paid to staff members, consisting of certain health plan expenditures. 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, businesses that got a Paycheck Security Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 allows services to claim the ERC even if they received a PPP loan. However, the same salaries can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively expanded and boosted, permitting eligible employers to declare the credit for certified incomes paid as far back as March 13, 2020. This retroactive provision offers an opportunity for businesses to change prior-year income tax return and receive refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their work tax returns, typically Type 941. The excess can be refunded to the company if the credit exceeds the quantity of employment taxes owed.
It is essential to keep in mind that the ERC arrangements and eligibility criteria have actually evolved in time. The very best strategy is to seek advice from a tax expert or check out the main IRS site for the most detailed and current information regarding the ERC, including any recent legal changes or updates.
To get approved for the ERC, a service must satisfy one of the following requirements:.
Business operations were totally or partially suspended due to a government order related to COVID-19.
The business experienced a considerable decrease in gross invoices. For 2021, a significant decline is specified as a 20% decline in gross invoices 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 same quarter in 2019, or a 20% decline in gross invoices compared to the immediately preceding quarter.
The ERC is offered to companies of all sizes, including tax-exempt organizations, but there are some exceptions. For instance, federal government entities and businesses that got a PPP loan might have limitations on claiming the credit.
The process for claiming the ERC includes completing the required kinds and consisting of the credit on your employment income tax return (usually Kind 941). The exact time it takes to process the credit can differ based upon several aspects, including the intricacy of your organization and the work of the IRS. It’s advised to talk to a tax expert for assistance specific to your scenario.
There are numerous companies that can help with the procedure of claiming the ERC. Some well-known companies that use assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the information provided here is based on basic understanding and may not show the most current updates or modifications to the ERC. It is very important to seek advice from a tax professional or check out the official IRS website for the most up-to-date and precise info concerning eligibility, declaring procedures, and offered help.
Less than 100. The credit is based if the employer had 100 or less employees on average in 2019.
on earnings paid to all staff members whether they really 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. The credit is if the employer had more than 100 staff members on average in 2019.
permitted just for earnings paid to employees who did not work during the calendar quarter.
In both cases, “incomes” includes not just money payments but likewise a portion of the expense of company.
offered health care. Refundable Vs Nonrefundable Portion Of Employee Retention Credit
Employers can be immediately repaid for the credit by reducing the amount of payroll taxes they.