Lets talk first about What Are Employee Retention Credit Claims :
Our team here what do these guys doing everybody in this space is helping teach people about ERC and uh always offer a lovely breakfast and have people truly learn more about the program we ought to head to the room where we are able to show a few of the checks that we are getting for companies and I want to see that what is this this is uh hundreds of millions of dollars literally Kevin hundreds of countless dollars so these are replicate copies of the letters that go to customers verifying that the check is on the method I imply you know if you simply begin 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 mean it’s just I mean think of the number of real clients that went through the program yeah this is the very end this is the celebration at the end when the check is validated 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 have the ability to track it you understand when you
receive this you understand the check is chosen sure and that’s when they pay so they don’t pay anything until they in fact receive the cash they do not pay bottom line Wonder trust anything until this letter is confirmed the check is on the method they transfer it into their bank account and they can truly rely on Wonder trust that the process has been finished and the number of you believe you have actually processed since you began this we’re about 35 000 of these for
about six billion dollars wow so plainly they understand 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 one of these that’s what matters all right Mr Wonderful here you’re at my YouTube channel we’re talking about something really important today the employee retention credit which the majority of you have actually never ever become aware of I certainly had not become aware of it up until very just recently and discovered a lot about it due to the fact that this is most likely the lowest expense of capital for any small business anywhere
anytime if you have employees between 5 and five hundred so I have actually got the specialist with me this is Josh Fox he’s the founder and CEO of bottom line Concepts 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 call up your bank supervisor and say provide me a loan it does not work there’s not a loan it’s an application and Josh is going to inform us all about it and how to get it and why I have actually become yes the Ambassador and paid representative for this I enjoy this program it’s disappearing very soon you got to discover everything about it let’s talk worker 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 organizations 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everybody it makes a huge 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 simply have to make sure we got that point I suggest that’s a huge difference a loan versus cash money I like cash cash 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 difficult check in the mail where you get actual money from the IRS all right so let’s talk about how it works because it sounds 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 Presumption this money is not for the owner not for people on the cap table not for shareholders it’s for employees right you needed to have owned a company however it’s based upon you having W-2 workers 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 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 proper so there were six quarters the program was open well walk us through the six quarters so you had quarters 2 3 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 favorite part money how much can you get back per worker that was on a W-2 in those six quarters so the computation in 2020 to be precise Kevin is 50 of the staff member’s salary to a maximum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s salary to an optimum of seven thousand per quarter how did that happen um they simply altered the rules in.
2021 versus because the turmoil of the pandemic so they wished to even get more to keep those workers 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 then what happens 21 000 Max in 2021 oh that’s how you create twenty 6 thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty 6 thousand dollars per employee that is since that’s a great deal of money it is now there’s a caveat here the PPP money would have to be decreased from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would reduce the 26 000 so what we’re seeing on average Kevin is if you took PPP cash someplace around 10 thousand dollars an individual so let’s state 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 money you would still get a million dollar in the mail from the IRS so it’s substantial clearly now the huge concern is why does no one learn about this since appearance when I initially heard about this when I initially fulfilled Josh you understand I have actually got great deals of investments in great deals of companies I’m a major supporter for entrepreneurship in America and make many many financial investments in business owners of which many suffered through the pandemic when I first found out about this I called BS I don’t think it due to the fact that I use 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 should have and we used them carefully to survive during the pandemic so when I became aware of this I said 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 info out there then a lot of individuals informed me well you can’t get it since you took the PPP also not true so let’s ask Josh why does no one understand about the employee retention credit you know what’s fascinating you’re discussing the banks Kevin since in the PPP loan procedure the federal government made it extremely clear that if you desired 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 chaos since keep in mind in the original cares act you could not do both programs so if you had done PPP you could not do 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 truly he or she’s never 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 business your accounting professional no your accountant’s never ever done this prior to unless you have an account that entered into this service and bottom line my company Kevin has actually stayed in business since 2009 and we have actually been dealing with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 companies so a great deal of our big huge business clients have worked with bottom line to recover other government programs we have actually done sales tax and utilize tax joblessness tax work chance tax credits research and development tax credits unclaimed property property tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit designed to motivate.
employers to keep staff members on their payroll. The credit is 50% of up to $10,000 in earnings paid by an.
Since of COVID-19 or whose gross receipts, employer whose organization is totally or partially suspended.
decrease by more than 50%.
1. The credit is readily available to all companies no matter size consisting of tax exempt companies. There are.
just two exceptions: (1) state and city governments and their instrumentalities and (2) small.
companies who take Small company Loans.
2. To qualify, the company needs to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s organization is completely or partly suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the equivalent quarter in 2019. As soon as the.
company’s gross invoices exceed 80% of an equivalent quarter in 2019 they no longer qualify.
after completion of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the qualifying earnings paid up to $10,000 in overall.
It is effective for incomes paid after March 13th and prior to December 31, 2020.
The meaning of qualifying earnings differs by whether a company had, on average, more or less than.
100 employees in 2019.
Business that specialize in ERC filing help normally supply competence and assistance to help organizations navigate the complicated process of declaring the credit. They can use numerous services, consisting of:.
How is the employee retention credit calculated? What Are Employee Retention Credit Claims
Eligibility Evaluation: These companies will assess your service’s eligibility for the ERC based upon elements such as your industry, revenue, and operations. They can assist determine if you fulfill the requirements for the credit and determine the maximum credit quantity you can declare.
Documents and Computation: ERC filing services will help in gathering the essential paperwork, such as payroll records and financial declarations, to support your claim. They will also help calculate the credit amount based upon eligible earnings and other certifying expenses.
Retroactive Claim Review: If you are eligible to claim the ERC for previous quarters, these companies can review your past payroll records and financials to recognize potential chances for retroactive credits. They can assist you modify previous tax returns to claim these refunds.
Filing Assistance: Companies concentrating on ERC filings will prepare and submit the essential kinds and documentation on your behalf. This includes finishing Form 941 or any other necessary tax forms.
Compliance and Updates: ERC regulations and assistance have developed gradually. These business remain updated with the most recent modifications and guarantee that your filings adhere to the most existing standards. If the Internal revenue service demands additional details or performs an audit associated to your ERC claim, they can also supply ongoing support.
It’s important to research study and veterinarian any company using ERC filing help to guarantee their trustworthiness and know-how. Search for recognized companies with experience in tax and payroll services, or think about reaching out to relied on accounting companies or tax specialists who offer ERC submitting assistance.
Remember that while these companies can provide valuable support, it’s constantly a great concept to have a standard understanding of the ERC requirements and process yourself. This will assist you make informed decisions and guarantee accurate filings.
The Worker Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief procedures. The objective of the ERC is to encourage services to keep and pay their employees throughout the pandemic, even if their operations have been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is available to qualified employers, including for-profit businesses, tax-exempt companies, and particular governmental entities. To qualify, companies need to satisfy one of two criteria:.
Business operations were completely or partly suspended due to a government order related to COVID-19.
Business experienced a significant decline in gross receipts. As pointed out earlier, for 2021, a considerable decrease is specified as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decrease in gross invoices compared to the very 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 (approximately 70%) of qualified wages paid to staff members, including specific health insurance expenditures. 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 Protection Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 enables companies to declare the ERC even if they got a PPP loan. The same salaries can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and enhanced, allowing qualified companies to declare the credit for certified wages paid as far back as March 13, 2020. This retroactive arrangement supplies a chance for businesses to modify prior-year income tax return and receive refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their employment income tax return, normally Form 941. The excess can be refunded to the employer if the credit goes beyond the amount of employment taxes owed.
It’s important to note that the ERC arrangements and eligibility requirements have progressed gradually. The very best course of action is to seek advice from a tax expert or go to the official IRS site for the most detailed and updated info relating to the ERC, including any current legal changes or updates.
To receive the ERC, a business should meet among the following requirements:.
Business operations were completely or partly suspended due to a government order related to COVID-19.
The business experienced a substantial decline in gross receipts. For 2021, a substantial decrease is specified as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a substantial decrease is specified as a 20% decline in gross invoices compared to the same quarter in 2019, or a 20% decline in gross invoices compared to the immediately preceding quarter.
The ERC is readily available to services of all sizes, consisting of tax-exempt companies, but there are some exceptions. Federal government entities and organizations that got a PPP loan may have limitations on claiming the credit.
The procedure for claiming the ERC includes completing the essential kinds and including the credit on your work income tax return (typically Kind 941). The exact time it requires to process the credit can vary based upon numerous factors, consisting of the intricacy of your organization and the work of the internal revenue service. It’s advised to speak with a tax professional for assistance particular to your scenario.
There are numerous business that can help with the procedure of declaring the ERC. Some popular companies that use support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the details provided here is based on basic understanding and might not show the most current updates or changes to the ERC. It is essential to talk to a tax professional or go to the official internal revenue service site for the most current and accurate information regarding eligibility, claiming treatments, and offered assistance.
Less than 100. If the company had 100 or fewer workers usually in 2019, then the credit is based.
on incomes paid to all staff members whether they in fact worked or not. To put it simply, even if the.
workers worked full-time and made money 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.
permitted just for earnings paid to workers who did not work throughout the calendar quarter.
In both cases, “wages” consists of not just money payments however also a part of the cost of employer.
offered healthcare. What Are Employee Retention Credit Claims
Employers can be immediately reimbursed for the credit by lowering the quantity of payroll taxes they.