Lets talk first about Revised Employee Retention Credit :
Our team here what do these people doing everyone in this room is helping teach people about ERC and uh constantly provide a lovely breakfast and have individuals really find out about the program we need to head to the room 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 millions of dollars actually Kevin hundreds of countless dollars so these are duplicate copies of the letters that go to clients validating 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 imply this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I imply it’s just I imply consider the number of actual clients that went through the program yeah this is the very end this is the party at the end when the check is verified the numbers are validated and the check is on the mail in the mail from the internal revenue service heading to the customer so that’s how you have the ability to track it you understand when you
receive this you know the check is opted for sure and that’s when they pay so they do not pay anything up until they actually receive the cash they don’t pay bottom line Wonder trust anything up until this letter is verified the check is on the way they transfer it into their savings account and they can genuinely rely on Wonder trust that the procedure has actually been finished and the number of you believe you have actually processed because you began this we have to do with 35 000 of these for
about six billion dollars wow so clearly they know what they’re doing and that’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 Wonderful here you’re at my YouTube channel we’re speaking about something really essential today the employee retention credit which most of you have actually never heard of I certainly hadn’t become aware of it until very just recently and discovered a lot about it because this is most likely the most affordable expense of capital for any small business anywhere
anytime if you have staff members between 5 and five hundred so I have actually got the expert with me this is Josh Fox he’s the founder and CEO of bottom line Principles 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 simply contact your bank supervisor and state give me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to inform all of us about it and how to get it and why I’ve become yes the Ambassador and paid representative for this I enjoy this program it’s going away very soon you got to discover everything about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply begin there so throughout the Trump Administration when President Trump was enacted they created 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 almost 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.
remedy the cash cash payroll tax refund alright go on sorry I simply have to ensure we got that point I suggest that’s a big distinction a loan versus money money I like money cash that’s what we’re discussing 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 initial cares Act is the ERC and yes Kevin it is a beautiful difficult check in the mail where you get actual cash from the IRS all right so let’s speak about how it works because it seems like to me if it’s a if it’s employee retention credit that individual needed to be an employee so I’m going to make the Presumption this cash is not for the owner not for people on the cap table not for shareholders it’s for staff members right you needed to have owned a company but 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 first six months of 2021 on the W-2 correct so there were six quarters the program was open well walk us through the six quarters so you had quarters 2 3 and four of 2020 and you had quarters one 2 and three of 2021. all right so that’s how it’s determined you need to be on the W-2 throughout that period now let’s talk my favorite part cash how much can you return per employee that was on a W-2 in those 6 quarters so the estimation in 2020 to be exact Kevin is 50 of the worker’s wage 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 a maximum of 7 thousand per quarter how did that happen um they just changed the rules in.
2021 versus since the chaos 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 five thousand Max and after that 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 six thousand dollars per employee that is because that’s a lot of cash it is now there’s a caution here the PPP cash would need to be minimized 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 on average Kevin is if you took PPP money someplace around ten thousand dollars a person so let’s say hypothetically you owned a dining establishment in New York City where I’m from and you had a hundred employees and you took PPP cash 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 no one learn about this since appearance when I initially heard about this when I initially met Josh you understand I have actually got great deals of financial investments in great deals of companies I’m a major advocate for entrepreneurship in America and make numerous numerous financial investments in entrepreneurs of which many suffered through the pandemic when I initially heard about this I called BS I do not think it due to the fact that I utilize the PPP we went through the cash center Banks to get it it was very 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 hold true however when I dug around I even contacted us to my politician pals 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 bunch of people told me well you can’t get it since you took the PPP likewise not real so let’s ask Josh why does no one learn about the worker retention credit you understand what’s interesting you’re discussing the banks Kevin because in the PPP loan procedure the federal government made it really 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 procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s just process procedure that’s all um and here there was turmoil since keep in mind in the initial cares act you could not do both programs so if you had actually done PPP you could not do ERC in the original program and when they altered the law in 2021 the banks were refraining from doing ERC since it’s not alone so you’re getting a tax refund so the government never ever made it clear to anyone about how to.
do this does your CFO understand 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 business your accountant no your accounting professional’s never ever done this before unless you have an account that entered into this company and bottom line my company Kevin has been in business since 2009 and we have actually been working with the federal government and the state federal government to recuperate cash for Fortune 500 Fortune 1000 companies so a great deal of our big huge corporate customers have actually worked with bottom line to recover other government programs we’ve done sales tax and use tax unemployment tax work chance tax credits research and development tax credits unclaimed home property tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit developed to encourage.
companies to keep employees on their payroll. The credit is 50% of as much as $10,000 in earnings paid by an.
Due to the fact that of COVID-19 or whose gross invoices, employer whose company is totally or partially suspended.
decrease by more than 50%.
1. The credit is readily available to all employers regardless of size including tax exempt organizations. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) little.
businesses who take Small company Loans.
2. To certify, the company needs to meet one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s company is fully or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross invoices are below 50% of the equivalent quarter in 2019. When the.
employer’s gross invoices exceed 80% of an equivalent quarter in 2019 they no longer qualify.
after the end of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the certifying salaries paid up to $10,000 in overall.
It is effective for earnings paid after March 13th and before December 31, 2020.
The definition of certifying wages differs by whether a company had, usually, more or less than.
100 workers in 2019.
Companies that specialize in ERC filing help typically supply proficiency and assistance to help organizations browse the intricate process of declaring the credit. They can offer different services, consisting of:.
How is the employee retention credit calculated? Revised Employee Retention Credit
Eligibility Evaluation: These business will assess your company’s eligibility for the ERC based upon elements such as your market, revenue, and operations. They can help identify if you satisfy the requirements for the credit and recognize the maximum credit quantity you can declare.
Paperwork and Calculation: ERC filing services will assist in gathering the needed documentation, such as payroll records and monetary declarations, to support your claim. They will likewise assist calculate the credit quantity based upon qualified earnings and other qualifying costs.
Retroactive Claim Review: If you are qualified to declare the ERC for prior quarters, these business can review your previous payroll records and financials to identify possible chances for retroactive credits. They can assist you amend previous income tax return to claim these refunds.
Filing Support: Companies focusing on ERC filings will prepare and send the essential kinds and documents in your place. This includes completing Kind 941 or any other necessary tax forms.
Compliance and Updates: ERC guidelines and guidance have actually developed gradually. These business stay updated with the latest changes and guarantee that your filings adhere to the most existing standards. If the IRS requests extra details or performs an audit related to your ERC claim, they can likewise offer continuous support.
It is very important to research study and veterinarian any company offering ERC filing help to guarantee their credibility and know-how. Search for recognized companies with experience in tax and payroll services, or consider connecting to trusted accounting firms or tax specialists who use ERC submitting support.
Bear in mind that while these companies can provide important support, it’s always a great concept to have a basic understanding of the ERC requirements and procedure yourself. This will assist you make informed choices and ensure precise filings.
The Worker Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief steps. The objective of the ERC is to encourage services to maintain and pay their staff members during the pandemic, even if their operations have actually been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to qualified companies, consisting of for-profit companies, tax-exempt organizations, and specific governmental entities. To certify, companies need to meet one of two requirements:.
Business operations were totally or partially suspended due to a federal government order related to COVID-19.
Business experienced a considerable decline in gross invoices. As mentioned earlier, for 2021, a substantial decrease is defined as a 20% decrease in gross invoices 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% decline in gross receipts 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 quantity is equal to a percentage (approximately 70%) of qualified wages paid to employees, consisting of certain health insurance 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 received an Income Security Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 allows organizations to claim the ERC even if they got a PPP loan. The exact same salaries can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively broadened and enhanced, permitting eligible employers to claim the credit for qualified earnings paid as far back as March 13, 2020. This retroactive arrangement offers an opportunity for businesses to change prior-year tax returns and receive refunds.
Declaring the Credit: Employers can declare the ERC by reporting it on their employment tax returns, generally Kind 941. The excess can be reimbursed to the company if the credit goes beyond the quantity of work taxes owed.
It is necessary to keep in mind that the ERC provisions and eligibility criteria have progressed over time. The very best course of action is to seek advice from a tax professional or go to the official internal revenue service site for the most comprehensive and current info regarding the ERC, consisting of any recent legal modifications or updates.
To get approved for the ERC, a service must fulfill among the following criteria:.
The business operations were totally or partially suspended due to a federal government order related to COVID-19.
Business experienced a substantial decline in gross invoices. For 2021, a considerable decrease is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decline in gross invoices compared to the instantly preceding quarter.
The ERC is readily available to services of all sizes, consisting of tax-exempt companies, however there are some exceptions. Federal government entities and services that got a PPP loan may have constraints on claiming the credit.
The process for claiming the ERC involves finishing the needed types and consisting of the credit on your employment income tax return (normally Type 941). The exact time it takes to process the credit can vary based on a number of aspects, consisting of the intricacy of your service and the workload of the IRS. It’s advised to talk to a tax professional for assistance particular to your circumstance.
There are numerous companies that can assist with the process of claiming the ERC. These consist of accounting firms, tax advisory services, and payroll service providers. Some well-known companies that provide assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research and get in touch with these companies directly to ask about their services and charges.
Please keep in mind that the details supplied here is based on general understanding and may not reflect the most current updates or modifications to the ERC. It is essential to consult with a tax professional or go to the official internal revenue service website for the most current and precise info relating to eligibility, declaring procedures, and available help.
Less than 100. If the company had 100 or less workers typically in 2019, then the credit is based.
on earnings paid to all staff members whether they really worked or not. To put it simply, even if the.
employees worked full time and got paid for full-time work, the company still gets the credit.
Greater than 100. If the company had more than 100 employees on average in 2019, then the credit is.
allowed only for earnings paid to employees who did not work during the calendar quarter.
In both cases, “earnings” consists of not simply money payments however also a part of the cost of employer.
offered healthcare. Revised Employee Retention Credit
Employers can be instantly repaid for the credit by reducing the amount of payroll taxes they.