Lets talk first about Us Employee Retention Credit :
Our group here what do these guys doing everyone in this space is helping teach people about ERC and uh constantly provide a stunning breakfast and have individuals actually learn about the program we should head to the room where we are able to display a few of the checks that we are getting for business and I want to see that what is this this is uh numerous countless 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 way I indicate you know if you simply start to look at a few of these here I suggest this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s simply I imply think of 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 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’re able to track it you know when you
receive this you know the check is gone for sure which’s when they pay so they do not pay anything up until they really receive the cash they don’t pay bottom line Wonder trust anything until this letter is validated 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 ended up and how many you think you’ve 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 require experts 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 really essential today the employee retention credit which most of you have never become aware of I certainly had not heard of it up until very recently and discovered a lot about it due to the fact that this is most likely the most affordable cost of capital for any small company anywhere
anytime if you have employees between 5 and five hundred so I’ve got the professional 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 hard this isn’t like PPP we simply contact 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 all of us about it and how to get it and why I’ve ended up being yes the Ambassador and paid representative for this I love 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 start there so during the Trump Administration when President Trump was enacted they created the cares Act and the cares act offered businesses 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everyone it makes a huge distinction right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the money cash payroll tax refund alright go on sorry I simply need to make sure we got that point I imply that’s a big difference a loan versus cash money I like cash money that’s what we’re speaking 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 original cares Act is the ERC and yes Kevin it is a gorgeous tough check in the mail where you get actual money from the internal revenue service 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 needed to be a worker so I’m going to make the Presumption this cash is not for the owner not for individuals on the cap table not for investors it’s for staff members right you had to have owned an organization however it’s based on you having W-2 staff members 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 eligible so you have 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 appropriate so there were six quarters the program was open well stroll us through the 6 quarters so you had quarters two three and 4 of 2020 and you had quarters one two and three of 2021. okay so that’s how it’s measured you have to be on the W-2 throughout that period now let’s talk my preferred part cash how much can you get back per staff member that was on a W-2 in those 6 quarters so the computation in 2020 to be specific Kevin is 50 of the staff member’s salary to a maximum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers escalated to 70 of the worker’s income to a maximum of seven thousand per quarter how did that occur um they just altered the rules in.
2021 versus because 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 up to five thousand Max and then 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 lot of cash it is now there’s a caution here the PPP cash would have to be reduced from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would lower the 26 000 so what we’re seeing usually 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 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 question is why does no one know about this since look when I first heard about this when I first met Josh you know I have actually got great deals of financial investments in lots of companies I’m a significant supporter for entrepreneurship in America and make lots of lots of investments in entrepreneurs of which lots of suffered through the pandemic when I first heard about this I called BS I do not think it because I use the PPP we went through the cash center Banks to get it it was extremely easy to do we had our CEOs call the banks they got their loans which were well should have and we utilized them sensibly to stay alive throughout the pandemic so when I found out about this I said nah it can’t be true however when I dug around I even called to my political leader good friends Governor Senators they didn’t understand about it I imply that’s how you understand that’s how false information is that there’s no details out there then a bunch 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 no one know about the worker retention credit you understand what’s fascinating you’re talking about the banks Kevin since in the PPP loan procedure 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 huge 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 just process process that’s all um and here there was turmoil due to the fact that keep in mind in the original cares act you might not do both programs so if you had actually done PPP you might refrain from doing 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 anyone about how to.
do this does your CFO know how to do this not truly he or she’s never ever done it previously do the banks do it nope the banks don’t do it the payroll companies yeah a few 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 stayed in business given that 2009 and we’ve been working with the federal government and the state federal government to recuperate money for Fortune 500 Fortune 1000 business so a lot of our big big corporate customers have worked with bottom line to recover other government programs we have actually 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 worker retention tax credit is a broad based refundable tax credit created to encourage.
companies to keep staff members on their payroll. The credit is 50% of up to $10,000 in wages paid by an.
Since of COVID-19 or whose gross invoices, company whose business is totally or partially suspended.
decrease by more than 50%.
1. The credit is offered to all employers regardless of size consisting of tax exempt organizations. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
organizations who take Small Business 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 partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the similar quarter in 2019. As soon as the.
employer’s gross invoices go above 80% of an equivalent quarter in 2019 they no longer certify.
after completion of that quarter.
Computation of the Credit.
The quantity of the credit is 50% of the qualifying incomes paid up to $10,000 in overall.
It is effective for earnings paid after March 13th and prior to December 31, 2020.
The meaning of qualifying salaries differs by whether a company had, typically, more or less than.
100 employees in 2019.
Companies that focus on ERC filing assistance usually provide proficiency and support to assist companies browse the complicated process of claiming the credit. They can provide various services, consisting of:.
How is the employee retention credit calculated? Us Employee Retention Credit
Eligibility Assessment: These companies will assess your company’s eligibility for the ERC based upon elements such as your market, income, and operations. They can help figure out if you satisfy the requirements for the credit and recognize the maximum credit amount you can claim.
Documents and Calculation: ERC filing services will assist in gathering the essential documentation, such as payroll records and financial declarations, to support your claim. They will likewise assist calculate the credit amount based on qualified incomes and other certifying costs.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for prior quarters, these business can evaluate your previous payroll records and financials to recognize potential chances for retroactive credits. They can assist you modify prior income tax return to claim these refunds.
Filing Help: Companies concentrating on ERC filings will prepare and submit the required kinds and documentation on your behalf. This consists of finishing Form 941 or any other required tax return.
Compliance and Updates: ERC policies and assistance have evolved over time. These companies remain upgraded with the current changes and make sure that your filings adhere to the most present guidelines. They can likewise provide ongoing support if the internal revenue service demands extra information or performs an audit related to your ERC claim.
It is essential to research study and veterinarian any business using ERC filing help to guarantee their credibility and proficiency. Look for recognized companies with experience in tax and payroll services, or think about connecting to relied on accounting firms or tax experts who offer ERC submitting support.
Bear in mind that while these business can provide important support, it’s always a great concept to have a fundamental understanding of the ERC requirements and procedure yourself. This will assist you make notified choices and ensure precise 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 measures. The goal of the ERC is to motivate organizations to retain and pay their workers throughout the pandemic, even if their operations have actually been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to eligible employers, including for-profit services, tax-exempt organizations, and specific governmental entities. To certify, companies should meet one of two criteria:.
The business operations were fully or partly suspended due to a government order related to COVID-19.
Business experienced a substantial decline in gross receipts. As discussed previously, for 2021, a substantial decline is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a considerable decrease is specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decline in gross invoices compared to the right away 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 portion (up to 70%) of qualified salaries paid to workers, including 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: Initially, organizations that got an Income Security Program (PPP) loan were not eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 permits companies to claim the ERC even if they received a PPP loan. The exact same wages can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and enhanced, enabling eligible employers to declare the credit for qualified incomes paid as far back as March 13, 2020. This retroactive arrangement offers a chance for companies to change prior-year income tax return and receive refunds.
Declaring the Credit: Employers can declare the ERC by reporting it on their employment tax returns, normally Form 941. The excess can be reimbursed to the company if the credit exceeds the quantity of work taxes owed.
It’s important to keep in mind that the ERC provisions and eligibility requirements have evolved with time. The best strategy is to speak with a tax expert or check out the main internal revenue service site for the most detailed and updated details concerning the ERC, including any recent legislative modifications or updates.
To receive the ERC, a business must meet among the following requirements:.
The business operations were fully or partially suspended due to a federal government order related to COVID-19.
The business experienced a considerable decline in gross receipts. For 2021, a substantial decline is defined as a 20% decline in gross invoices 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 exact same quarter in 2019, or a 20% decrease in gross receipts compared to the immediately preceding quarter.
The ERC is readily available to companies of all sizes, consisting of tax-exempt organizations, but there are some exceptions. Federal government entities and services that received a PPP loan might have limitations on claiming the credit.
The process for claiming the ERC involves finishing the required kinds and including the credit on your work income tax return (generally Kind 941). The exact time it requires to process the credit can vary based on a number of elements, including the complexity of your business and the workload of the internal revenue service. It’s recommended to speak with a tax professional for guidance specific to your situation.
There are a number of companies that can assist with the process of claiming the ERC. Some well-known business that offer support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the info provided here is based on general understanding and might not show the most recent updates or changes to the ERC. It is essential to talk to a tax expert or visit the official IRS site for the most precise and updated details regarding eligibility, declaring treatments, and available support.
Less than 100. The credit is based if the employer had 100 or fewer employees on average in 2019.
on incomes paid to all employees whether they in fact worked or not. Simply put, 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 workers on average in 2019.
enabled just for wages paid to employees who did not work throughout the calendar quarter.
In both cases, “salaries” consists of not simply cash payments however likewise a portion of the expense of company.
provided health care. Us Employee Retention Credit
Employers can be instantly reimbursed for the credit by lowering the quantity of payroll taxes they.