Lets talk first about Section 207 Employee Retention Credit :
Our team here what do these people doing everybody in this space is helping teach individuals about ERC and uh always offer a lovely breakfast and have individuals truly discover the program we should head to the space where we have the ability to display a few of the checks that we are getting for companies and I ‘d like to see that what is this this is uh numerous countless dollars literally Kevin numerous countless dollars so these are replicate copies of the letters that go to clients confirming that the check is on the method I indicate you know if you just start to take a look at some of these here I mean this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s simply I mean think about how many real 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 verified 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 know when you
receive this you understand the check is chosen sure which’s when they pay so they do not pay anything until they actually get the money they do not pay bottom line Wonder trust anything up until this letter is verified the check is on the way they transfer it into their checking account and they can genuinely rely on Wonder trust that the process has been completed and the number of you think you’ve processed because you began this we’re about 35 000 of these for
about 6 billion dollars wow so clearly they know what they’re doing which’s what you require you need professionals 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 Wonderful here you’re at my YouTube channel we’re discussing something actually important today the worker retention credit which the majority of you have actually never ever heard of I definitely hadn’t heard of it up until very just recently and discovered a lot about it since this is probably the most affordable expense of capital for any small company anywhere
anytime if you have staff members between 5 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 Ideas they’re the largest processor of these ERC credits this is a 170 page program so it’s difficult this isn’t like PPP we just phone your bank supervisor 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’ve ended up being yes the Ambassador and paid spokesperson for this I enjoy this program it’s disappearing soon you got to discover everything about it let’s talk employee retention credit Josh Fox what is an ERC let’s just begin there so during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act provided organizations three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everyone it makes a big distinction right there two 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 fine go on sorry I just need to make sure we got that point I indicate that’s a big difference a loan versus money money I like cash money that’s what we’re discussing 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 original cares Act is the ERC and yes Kevin it is a stunning tough check in the mail where you get actual money from the IRS all right so let’s discuss how it works since it seems like to me if it’s a if it’s employee retention credit that individual had 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 staff members right you needed to have actually owned a company however it’s based upon 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 qualified so you need 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 six quarters the program was open well stroll us through the 6 quarters so you had quarters two 3 and four of 2020 and you had quarters one 2 and three of 2021. fine so that’s how it’s determined you have to be on the W-2 throughout that period now let’s talk my preferred part cash 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 exact Kevin is 50 of the worker’s salary to a maximum of 5 thousand dollars per staff member for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the employee’s income 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 5 thousand Max and after that 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 5 thousand in twenty twenty that’s twenty 6 thousand dollars per staff member that is since that’s a lot of money it is now there’s a caveat here the PPP cash would have to be lowered from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would decrease the 26 000 so what we’re seeing typically Kevin is if you took PPP cash someplace around ten thousand dollars a person so let’s say 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 cash you would still get a million dollar in the mail from the IRS so it’s big certainly now the big concern is why does nobody know about this since appearance when I initially heard about this when I initially met Josh you understand I’ve got great deals of investments in lots of companies I’m a significant advocate for entrepreneurship in America and make lots of many investments in business owners of which numerous suffered through the pandemic when I initially became aware of this I called BS I don’t think it due to the fact that I utilize the PPP we went through the money 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 been worthy of and we utilized them wisely to survive 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 pals Governor Senators they didn’t understand about it I mean that’s how you understand that’s how misinformation is that there’s no info 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 understand 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 procedure 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 procedure procedure that’s all um and here there was mayhem due to the fact that remember in the initial cares act you might refrain from doing both programs so if you had 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 government never made it clear to anybody about how to.
do this does your CFO know how to do this not really he or she’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 accounting professional’s never done this before unless you have an account that went into this company and bottom line my firm Kevin has been in business since 2009 and we have actually been dealing with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 business so a lot of our huge huge corporate customers have worked with bottom line to recuperate other federal government programs we have actually done sales tax and utilize tax joblessness tax work opportunity 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 designed to motivate.
employers to keep employees on their payroll. The credit is 50% of up to $10,000 in earnings paid by an.
company whose company is completely or partially suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
1. The credit is available to all companies regardless of size consisting of tax exempt organizations. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) small.
companies who take Small Business Loans.
2. To certify, the company has to satisfy one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s business is completely or partially suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross receipts are listed below 50% of the similar quarter in 2019. As soon as the.
employer’s gross receipts go above 80% of a comparable quarter in 2019 they no longer qualify.
after completion of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the qualifying earnings paid up to $10,000 in overall.
It works for incomes paid after March 13th and prior to December 31, 2020.
The meaning of qualifying wages varies by whether a company had, typically, more or less than.
100 staff members in 2019.
Companies that focus on ERC filing support generally provide expertise and support to assist businesses browse the complicated process of claiming the credit. They can provide different services, including:.
How is the employee retention credit calculated? Section 207 Employee Retention Credit
Eligibility Evaluation: These companies will examine your organization’s eligibility for the ERC based upon elements such as your market, earnings, and operations. They can help identify if you fulfill the requirements for the credit and recognize the maximum credit quantity you can claim.
Documents and Estimation: ERC filing services will assist in collecting the required documentation, such as payroll records and financial statements, to support your claim. They will also assist compute the credit amount based upon eligible earnings and other qualifying expenditures.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for prior quarters, these companies can evaluate your previous payroll records and financials to identify potential opportunities for retroactive credits. They can assist you amend prior tax returns to declare these refunds.
Filing Assistance: Business concentrating on ERC filings will prepare and send the needed types and documents on your behalf. This includes completing Type 941 or any other necessary tax forms.
Compliance and Updates: ERC regulations and assistance have actually evolved over time. These companies stay updated with the most recent modifications and make sure that your filings adhere to the most present standards. They can likewise offer ongoing assistance if the IRS requests additional info or conducts an audit related to your ERC claim.
It is essential to research and vet any business providing ERC filing support to guarantee their credibility and expertise. Search for recognized firms with experience in tax and payroll services, or think about reaching out to trusted accounting companies or tax experts who provide ERC filing assistance.
Remember that while these business can provide valuable assistance, it’s constantly a good concept to have a basic understanding of the ERC requirements and procedure yourself. This will assist you make notified decisions and guarantee 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 procedures. The objective of the ERC is to encourage businesses to keep and pay their workers during the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to qualified companies, consisting of for-profit companies, tax-exempt organizations, and specific governmental entities. To qualify, employers must meet one of two criteria:.
The business operations were completely or partially suspended due to a government order related to COVID-19.
The business experienced a substantial decline in gross receipts. As discussed earlier, for 2021, a significant decrease is defined as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decrease in gross invoices compared to the 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 employer’s share of Social Security taxes. The credit amount amounts to a portion (up to 70%) of qualified earnings paid to workers, consisting of particular health insurance expenses. The optimum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, companies that got an Income Security Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 permits businesses to declare the ERC even if they got a PPP loan. Nevertheless, the very same wages can not be used 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 salaries 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 claim the ERC by reporting it on their work tax returns, generally Type 941. The excess can be refunded to the employer if the credit surpasses the amount of employment taxes owed.
It is essential to keep in mind that the ERC provisions and eligibility requirements have developed in time. The best course of action is to consult with a tax expert or go to the official IRS website for the most up-to-date and detailed details concerning the ERC, consisting of any current legal modifications or updates.
To qualify for the ERC, a service must satisfy among the following requirements:.
The business operations were totally or partially suspended due to a government order related to COVID-19.
The business experienced a considerable decrease in gross receipts. For 2021, a substantial decrease is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a substantial decline is specified as a 20% decline in gross invoices compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the instantly preceding quarter.
The ERC is offered to organizations of all sizes, consisting of tax-exempt companies, but there are some exceptions. Government entities and companies that received a PPP loan may have constraints on claiming the credit.
The process for declaring the ERC involves finishing the required kinds and including the credit on your work tax return (normally Form 941). The exact time it requires to process the credit can vary based upon a number of factors, consisting of the complexity of your business and the workload of the IRS. It’s advised to speak with a tax professional for guidance specific to your scenario.
There are several business that can assist with the procedure of claiming the ERC. These include accounting firms, tax advisory services, and payroll company. Some well-known companies that provide assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research and call these business straight to inquire about their services and costs.
Please note that the info provided here is based upon general understanding and might not reflect the most recent updates or changes to the ERC. It is very important to speak with a tax professional or check out the main IRS site for the most up-to-date and precise details concerning eligibility, declaring procedures, and offered help.
Less than 100. If the company had 100 or less workers typically in 2019, then the credit is based.
on wages paid to all workers 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 company still gets the credit.
Greater than 100. The credit is if the company had more than 100 staff members on average in 2019.
enabled just for salaries paid to employees who did not work during the calendar quarter.
In both cases, “wages” includes not just cash payments however also a portion of the cost of company.
provided health care. Section 207 Employee Retention Credit
Companies can be right away repaid for the credit by decreasing the quantity of payroll taxes they.