Lets talk first about What Are Employee Retention Credits :
Our team here what do these men doing everyone in this room is helping teach individuals about ERC and uh constantly supply a gorgeous breakfast and have individuals actually discover the program we need to head to the space where we have the ability to show a few of the checks that we are getting for business and I want to see that what is this this is uh hundreds of countless dollars actually Kevin numerous millions of dollars so these are replicate copies of the letters that go to clients confirming that the check is on the method I suggest you know if you simply begin to look at some 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 actual clients that went through the program yeah this is the very end this is the party at the end when the check is validated the numbers are confirmed and the check is on the mail in the mail from the internal revenue service heading to the consumer so that’s how you’re able to track it you understand when you
receive this you know the check is gone for sure and that’s when they pay so they don’t pay anything up until they in fact receive the cash they do not pay bottom line Wonder trust anything until this letter is validated the check is on the method they deposit it into their bank account and they can truly rely on Wonder trust that the procedure has been ended up and the number of you believe you have actually processed because you began this we’re about 35 000 of these for
about six billion dollars wow so plainly they know what they’re doing which’s what you need you require experts 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 Terrific here you’re at my YouTube channel we’re talking about something actually important today the employee retention credit which the majority of you have never ever become aware of I certainly had not become aware of it up until really recently and found out a lot about it because this is probably the most affordable expense of capital for any small company anywhere
anytime if you have employees in 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 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 simply phone 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’ve ended up being yes the Ambassador and paid representative for this I love this program it’s disappearing soon you got to discover all about it let’s talk staff member 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 companies 3 chances 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.
correct the cash money payroll tax refund okay go on sorry I just need to make certain we got that point I mean that’s a big distinction a loan versus cash money I like money money that’s what we’re discussing 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 beautiful difficult check in the mail where you get real money from the IRS all right so let’s talk about how it works due to the fact that it seems like to me if it’s a if it’s staff member retention credit that person needed to be an employee 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 needed to have actually owned an organization but it’s based upon you having W-2 workers in America not 10.99. As long as you had W-2 staff members 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 very first 6 months of 2021 on the W-2 right so there were six quarters the program was open well stroll us through the six quarters so you had quarters two 3 and 4 of 2020 and you had quarters one 2 and three of 2021. okay so that’s how it’s measured you need to be on the W-2 during that duration now let’s talk my favorite part cash just 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 precise Kevin is 50 of the staff member’s salary to an optimum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the worker’s income to an optimum of 7 thousand per quarter how did that take place um they just altered the rules in.
2021 versus since the mayhem 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 as much as 5 thousand Max and then what occurs 21 000 Max in 2021 oh that’s how you create twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty 6 thousand dollars per staff member that is because that’s a lot of money it is now there’s a caveat here the PPP money would have to be reduced from the twenty six 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 somewhere around 10 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 employees and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s big obviously now the big question is why does nobody know about this since look when I initially found out about this when I initially fulfilled Josh you understand I’ve got great deals of investments in lots of companies I’m a major advocate for entrepreneurship in America and make lots of lots of financial investments in entrepreneurs of which lots of suffered through the pandemic when I initially found out about this I called BS I do not think it since I utilize the PPP we went through the money 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 deserved and we utilized them sensibly to survive during the pandemic so when I found out about this I stated nah it can’t hold true but when I dug around I even called to my political leader friends Governor Senators they didn’t learn about it I suggest that’s how you understand that’s how false information is that there’s no information out there then a lot of individuals informed me well you can’t get it because you took the PPP also not true so let’s ask Josh why does nobody know about the worker retention credit you know what’s interesting you’re talking about 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 huge banks in our country and they would process process in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply process process that’s all um and here there was mayhem because keep in mind in the original cares act you might refrain from doing both programs so if you had actually done PPP you might refrain from doing ERC in the initial program and when they altered the law in 2021 the banks were not doing ERC because it’s not alone so you’re getting a tax refund so the federal government never made it clear to any person about how to.
do this does your CFO understand how to do this not actually she or he’s never done it in the past do the banks do it nope the banks don’t do it the payroll business yeah a few of them are doing it as a payroll company your accounting professional no your accountant’s never ever done this prior to unless you have an account that entered into this business and bottom line my firm Kevin has actually been 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 business so a lot of our huge big corporate customers have worked with bottom line to recover other government programs we have actually done sales tax and use tax joblessness 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 created to encourage.
employers to keep employees on their payroll. The credit is 50% of up to $10,000 in earnings paid by an.
Because of COVID-19 or whose gross invoices, employer whose organization is completely or partially suspended.
decline by more than 50%.
1. The credit is available to all companies no matter size consisting of tax exempt organizations. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
companies who take Small Business Loans.
2. To qualify, the company has to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s business is fully or partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the company’s gross receipts are listed below 50% of the comparable quarter in 2019. Once the.
employer’s gross invoices exceed 80% of a comparable quarter in 2019 they no longer certify.
after completion of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the certifying incomes paid up to $10,000 in overall.
It works for wages paid after March 13th and before December 31, 2020.
The definition of certifying earnings varies by whether a company had, usually, more or less than.
100 employees in 2019.
Companies that focus on ERC filing support usually provide proficiency and support to help services navigate the complex procedure of claiming the credit. They can provide various services, including:.
How is the employee retention credit calculated? What Are Employee Retention Credits
Eligibility Evaluation: These business will examine your business’s eligibility for the ERC based upon aspects such as your industry, income, and operations. They can assist figure out if you fulfill the requirements for the credit and recognize the maximum credit amount you can claim.
Documentation and Calculation: ERC filing services will help in collecting the required documents, such as payroll records and financial statements, to support your claim. They will also assist compute the credit quantity based on qualified incomes and other certifying expenses.
Retroactive Claim Review: If you are qualified to claim the ERC for prior quarters, these business can review your past payroll records and financials to identify possible opportunities for retroactive credits. They can help you change prior income tax return to claim these refunds.
Filing Help: Business specializing in ERC filings will prepare and submit the essential kinds and documents on your behalf. This consists of finishing Form 941 or any other required tax return.
Compliance and Updates: ERC policies and guidance have actually evolved over time. These business remain upgraded with the latest modifications and make sure that your filings adhere to the most present standards. If the IRS demands additional info or conducts an audit related to your ERC claim, they can also offer continuous support.
It is necessary to research and veterinarian any company using ERC filing help to ensure their credibility and expertise. Look for recognized companies with experience in tax and payroll services, or think about connecting to trusted accounting companies or tax professionals who offer ERC filing support.
Bear in mind that while these business can offer valuable assistance, it’s always a great concept to have a fundamental understanding of the ERC requirements and procedure yourself. This will assist you make informed choices and make sure precise filings.
The Worker Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief measures. The objective of the ERC is to encourage businesses to keep and pay their employees during the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to qualified companies, consisting of for-profit organizations, tax-exempt companies, and particular governmental entities. To qualify, employers need to satisfy one of two requirements:.
Business operations were totally or partly suspended due to a government order related to COVID-19.
Business experienced a significant decline in gross receipts. As pointed out previously, for 2021, a significant decline is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross invoices 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 amount amounts to a percentage (up to 70%) of qualified earnings paid to workers, consisting of particular health plan 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: At first, services that received an Income Defense Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 permits services to declare the ERC even if they received a PPP loan. The exact 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 boosted, permitting eligible companies to declare the credit for certified earnings paid as far back as March 13, 2020. This retroactive provision supplies a chance for businesses to change prior-year tax returns and get refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their employment income tax return, usually Form 941. The excess can be refunded to the employer if the credit goes beyond the quantity of employment taxes owed.
It is very important to note that the ERC provisions and eligibility requirements have actually progressed over time. The best strategy is to consult with a tax professional or check out the main IRS website for the most comprehensive and updated details concerning the ERC, consisting of any current legislative changes or updates.
To get approved for the ERC, a business needs to meet one of the following requirements:.
Business operations were fully or partially suspended due to a federal government order related to COVID-19.
The business experienced a substantial decrease in gross receipts. For 2021, a significant decline is specified as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross invoices compared to the right away preceding quarter.
The ERC is offered to services of all sizes, including tax-exempt organizations, but there are some exceptions. Federal government entities and services that got a PPP loan may have restrictions on claiming the credit.
The process for claiming the ERC involves finishing the essential types and consisting of the credit on your work tax return (generally Type 941). The exact time it takes to process the credit can differ based on numerous elements, including the intricacy of your company and the workload of the internal revenue service. It’s advised to talk to a tax expert for assistance particular to your scenario.
There are numerous companies that can assist with the process of claiming the ERC. Some widely known business that provide assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the details provided here is based on basic understanding and may not reflect the most recent updates or modifications to the ERC. It’s important to speak with a tax professional or go to the official IRS site for the most up-to-date and precise information regarding eligibility, declaring treatments, and offered support.
Less than 100. If the employer had 100 or fewer staff members typically in 2019, then the credit is based.
on incomes paid to all employees whether they really worked or not. In other words, even if the.
employees worked full-time and made money for full time work, the employer still gets the credit.
Greater than 100. If the company had more than 100 staff members usually in 2019, then the credit is.
permitted only for wages paid to employees who did not work during the calendar quarter.
In both cases, “incomes” includes not just cash payments but likewise a part of the expense of employer.
provided healthcare. What Are Employee Retention Credits
Employers can be instantly compensated for the credit by lowering the amount of payroll taxes they.