Lets talk first about The New Employee Retention Credit :
Our team here what do these men doing everybody in this room is assisting teach people about ERC and uh always offer a lovely breakfast and have people really learn more about the program we must head to the room where we are able to show a few 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 literally Kevin numerous millions of dollars so these are replicate copies of the letters that go to clients verifying that the check is on the method I suggest 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 imply it’s just I mean consider how many real customers 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 verified and the check is on the mail in the mail from the internal revenue service heading to the client so that’s how you’re able to track it you know when you
receive this you understand the check is opted for sure and that’s when they pay so they do not pay anything up until they really get the cash they don’t pay bottom line Wonder trust anything till this letter is confirmed the check is on the way they deposit it into their bank account and they can truly trust Wonder trust that the process has been finished and how many you think you’ve processed considering that 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 require you need 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 actually crucial today the employee retention credit which the majority of you have actually never heard of I certainly hadn’t heard of it till very just recently and learned a lot about it because this is most likely the most affordable expense of capital for any small company anywhere
anytime if you have workers between five and five hundred so I have actually got the professional with me this is Josh Fox he’s the creator and CEO of bottom line Ideas they’re the biggest processor of these ERC credits this is a 170 page program so it’s difficult this isn’t like PPP we simply phone your bank supervisor and say offer me a loan it does not 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 become yes the Ambassador and paid representative for this I enjoy this program it’s going away soon you got to discover everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just begin there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act used services 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody it makes a huge difference right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the cash cash payroll tax refund fine go on sorry I just have to ensure we got that point I imply that’s a huge distinction a loan versus cash cash I like cash money that’s what we’re talking about 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 stunning difficult check in the mail where you get actual cash from the IRS all right so let’s talk about how it works because it seems like to me if it’s a if it’s staff member retention credit that individual had to be an employee so I’m going to make the Presumption this money is not for the owner not for people on the cap table not for shareholders it’s for workers right you had to have actually owned a company however it’s based upon you having W-2 staff members in America not 10.99. As long as you had W-2 employees 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 first six months of 2021 on the W-2 proper so there were six quarters the program was open well stroll us through the 6 quarters so you had quarters 2 3 and four of 2020 and you had quarters one 2 and 3 of 2021. alright so that’s how it’s measured 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 staff member that was on a W-2 in those 6 quarters so the computation in 2020 to be exact Kevin is 50 of the staff member’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 wage to an optimum of 7 thousand per quarter how did that occur um they just changed the rules in.
2021 versus because the mayhem of the pandemic so they wanted 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 as much as five thousand Max and after that what happens 21 000 Max in 2021 oh that’s how you develop twenty 6 thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty six thousand dollars per employee that is because that’s a great deal of money it is now there’s a caution here the PPP money would have to be reduced from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would lower the 26 000 so what we’re seeing on average Kevin is if you took PPP money someplace 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 workers and you took PPP cash you would still get a million dollar in the mail from the IRS so it’s big undoubtedly now the big question is why does nobody learn about this due to the fact that appearance when I initially heard about this when I initially fulfilled Josh you understand I have actually got great deals of financial investments in lots of companies I’m a significant supporter for entrepreneurship in America and make numerous many investments in entrepreneurs of which many suffered through the pandemic when I first heard about this I called BS I don’t think it due to the fact that 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 and that were well been worthy of and we utilized them carefully to survive throughout the pandemic so when I heard about this I stated nah it can’t be true however when I dug around I even called to my politician pals Governor Senators they didn’t learn about it I imply that’s how you understand that’s how misinformation is that there’s no info out there then a bunch of individuals told me well you can’t get it since you took the PPP likewise not real so let’s ask Josh why does nobody learn about the employee retention credit you understand what’s interesting you’re discussing the banks Kevin since 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 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 procedure procedure that’s all um and here there was chaos since remember in the original cares act you could not do both programs so if you had actually done PPP you could refrain from doing ERC in the initial 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 made it clear to anyone about how to.
do this does your CFO understand how to do this not really she or he’s never done it before do the banks do it nope the banks do not do it the payroll companies yeah some 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 service and bottom line my company Kevin has been in business because 2009 and we have actually been working with the federal government and the state federal government to recover cash for Fortune 500 Fortune 1000 companies so a great deal of our huge big corporate clients have dealt with bottom line to recuperate other government programs we’ve done sales tax and use tax unemployment tax work opportunity tax credits research and development tax credits unclaimed property property tax all of these other government programs.
The staff member retention tax credit is a broad based refundable tax credit created to motivate.
companies to keep staff members on their payroll. The credit is 50% of as much as $10,000 in earnings paid by an.
Because of COVID-19 or whose gross receipts, company whose company is fully or partly suspended.
decline by more than 50%.
1. The credit is readily available to all employers despite size including tax exempt organizations. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) little.
businesses who take Small company Loans.
2. To qualify, the employer has to satisfy one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s business is totally or partly suspended by government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross receipts are below 50% of the equivalent quarter in 2019. As soon as the.
employer’s gross invoices exceed 80% of an equivalent quarter in 2019 they no longer certify.
after completion of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the qualifying earnings paid up to $10,000 in total.
It works for earnings paid after March 13th and prior to December 31, 2020.
The definition of certifying salaries varies by whether an employer had, typically, more or less than.
100 employees in 2019.
Companies that focus on ERC filing help usually offer expertise and assistance to assist services navigate the complicated process of claiming the credit. They can provide different services, including:.
How is the employee retention credit calculated? The New Employee Retention Credit
Eligibility Assessment: These business will examine your organization’s eligibility for the ERC based on factors such as your industry, earnings, and operations. They can help identify if you satisfy the requirements for the credit and identify the optimum credit quantity you can declare.
Documentation and Calculation: ERC filing services will assist in collecting the essential paperwork, such as payroll records and monetary statements, to support your claim. They will likewise assist determine the credit amount based upon qualified wages and other qualifying expenditures.
Retroactive Claim Evaluation: If you are eligible to claim the ERC for previous quarters, these business can evaluate your past payroll records and financials to recognize potential opportunities for retroactive credits. They can assist you modify previous income tax return to declare these refunds.
Filing Support: Companies specializing in ERC filings will prepare and submit the essential kinds and paperwork in your place. This includes finishing Kind 941 or any other necessary tax return.
Compliance and Updates: ERC policies and guidance have actually evolved gradually. These companies stay upgraded with the latest changes and make sure that your filings adhere to the most present standards. They can likewise supply ongoing support if the IRS demands additional information or carries out an audit related to your ERC claim.
It is very important to research and vet any business providing ERC filing support to ensure their trustworthiness and expertise. Try to find recognized firms with experience in tax and payroll services, or consider reaching out to trusted accounting companies or tax professionals who use ERC submitting support.
Bear in mind that while these business can provide important assistance, it’s constantly a great concept to have a basic understanding of the ERC requirements and process yourself. This will help you make notified choices and guarantee accurate filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief steps. The goal of the ERC is to encourage businesses to retain and pay their staff members throughout the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to eligible employers, consisting of for-profit services, tax-exempt companies, and particular governmental entities. To qualify, employers should satisfy one of two requirements:.
Business operations were totally or partly suspended due to a government order related to COVID-19.
The business experienced a considerable decline in gross receipts. As mentioned earlier, for 2021, a significant decline is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a significant decrease 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 immediately preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit amount amounts to a percentage (as much as 70%) of certified incomes paid to staff members, including specific health insurance costs. The optimum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, companies that got an Income Defense Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 enables organizations to declare the ERC even if they received a PPP loan. Nevertheless, the same earnings can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and enhanced, permitting eligible companies to claim the credit for certified wages paid as far back as March 13, 2020. This retroactive arrangement offers a chance for services to amend prior-year tax returns and receive refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their work tax returns, typically Form 941. If the credit exceeds the amount of work taxes owed, the excess can be refunded to the company.
It’s important to note that the ERC provisions and eligibility requirements have actually evolved gradually. The very best strategy is to talk to a tax expert or visit the official IRS website for the most in-depth and up-to-date information regarding the ERC, including any recent legal changes or updates.
To get approved for the ERC, an organization should satisfy one of the following requirements:.
Business operations were totally or partially suspended due to a federal government order related to COVID-19.
Business experienced a considerable decrease in gross receipts. For 2021, a significant decline is defined as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a considerable decline 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.
The ERC is available to services of all sizes, including tax-exempt organizations, however there are some exceptions. For example, federal government entities and businesses that got a PPP loan might have limitations on claiming the credit.
The procedure for declaring the ERC includes finishing the required kinds and including the credit on your employment tax return (normally Kind 941). The exact time it requires to process the credit can vary based upon a number of elements, consisting of the complexity of your business and the work of the IRS. It’s recommended to talk to a tax professional for assistance particular to your situation.
There are several business that can assist with the procedure of claiming the ERC. Some widely known business that use support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the info offered here is based on general understanding and may not reflect the most recent updates or changes to the ERC. It’s important to talk to a tax professional or go to the main internal revenue service site for the most up-to-date and precise information relating to eligibility, claiming procedures, and readily available help.
Less than 100. If the company had 100 or less employees typically in 2019, then the credit is based.
on wages paid to all workers 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 employer still gets the credit.
Greater than 100. The credit is if the company had more than 100 staff members on average in 2019.
enabled only for wages paid to workers who did not work throughout the calendar quarter.
In both cases, “incomes” includes not just money payments but likewise a portion of the expense of employer.
offered health care. The New Employee Retention Credit
Companies can be instantly reimbursed for the credit by minimizing the quantity of payroll taxes they.