Lets talk first about What Are Qualifying Wages For Employee Retention Credit :
Our group here what do these people doing everybody in this room is assisting teach people about ERC and uh constantly offer a stunning breakfast and have people really discover the program we ought to head to the space where we have the ability to show some 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 customers validating that the check is on the way I mean you understand if you simply start to take a look at some of these here I imply 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 actual 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 client so that’s how you’re able to track it you understand when you
get this you know the check is gone for sure and that’s when they pay so they do not pay anything till they in fact receive the money they do not pay bottom line Wonder trust anything until this letter is validated the check is on the method they transfer it into their bank account and they can genuinely trust Wonder trust that the procedure has been ended up and how many you believe you have actually processed given that you began this we’re about 35 000 of these for
about 6 billion dollars wow so plainly 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 actually essential today the employee retention credit which most of you have never ever become aware of I definitely had not heard of it up until extremely just recently and discovered a lot about it because this is probably the most affordable expense of capital for any small business anywhere
anytime if you have workers in between five and five hundred so I’ve got the specialist with me this is Josh Fox he’s the creator and CEO of bottom line Concepts they’re the biggest processor of these ERC credits this is a 170 page program so it’s not easy this isn’t like PPP we simply contact your bank manager and state give me a loan it does not work there’s not a loan it’s an application and Josh is going to inform all of us about it and how to get it and why I have actually become yes the Ambassador and paid spokesperson for this I enjoy this program it’s disappearing very soon you got to learn everything about it let’s talk worker retention credit Josh Fox what is an ERC let’s simply begin there so during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act offered businesses three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everyone it makes a huge difference right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
remedy the cash cash payroll tax refund okay go on sorry I simply have to ensure we got that point I imply that’s a big difference a loan versus money cash I like cash money that’s what we’re speaking about alright 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 lovely hard check in the mail where you get actual money from the IRS all right so let’s talk about how it works since it seems like to me if it’s a if it’s employee 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 people on the cap table not for investors it’s for workers right you needed to have actually owned a company however it’s based on you having W-2 employees in America not 10.99. so as long as you had W-2 staff members 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 need to be on payroll for the first six months of 2021 on the W-2 appropriate so there were six quarters the program was open well walk us through the six quarters so you had quarters two 3 and 4 of 2020 and you had quarters one 2 and 3 of 2021. okay so that’s how it’s determined you have to be on the W-2 throughout that duration now let’s talk my preferred part cash just how much can you return per worker 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 an optimum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers escalated to 70 of the worker’s salary to a maximum of seven thousand per quarter how did that happen um they just changed the rules in.
2021 versus since the mayhem 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 as much as five thousand Max and then what takes place 21 000 Max in 2021 oh that’s how you create twenty 6 thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty 6 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 need to be minimized from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would minimize the 26 000 so what we’re seeing usually Kevin is if you took PPP money somewhere around 10 thousand dollars an individual so let’s say hypothetically you owned a restaurant in New york city City where I’m from and you had a hundred employees and you took PPP money you would still get a million dollar in the mail from the internal revenue service so it’s huge certainly now the huge question is why does nobody know about this because look when I initially became aware of this when I first satisfied Josh you know I have actually got great deals of investments in great deals of business I’m a major supporter for entrepreneurship in America and make numerous many investments in business owners of which many suffered through the pandemic when I first found out about this I called BS I do not think it because I use the PPP we went through the money center Banks to get it it was very easy to do we had our CEOs call the banks they got their loans and that were well deserved and we utilized them wisely to stay alive during the pandemic so when I found out about this I said nah it can’t hold true however when I dug around I even contacted us to my political leader friends Guv Senators they didn’t understand about it I suggest that’s how you know that’s how misinformation 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 real so let’s ask Josh why does no one know about the worker retention credit you understand what’s fascinating you’re discussing the banks Kevin because in the PPP loan process 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 simply procedure process 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 altered the law in 2021 the banks were not doing ERC due to the fact that 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 understand how to do this not truly she or he’s never done it before 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 accounting professional’s never done this before unless you have an account that entered into this service and bottom line my company Kevin has stayed in business given that 2009 and we’ve been dealing with the federal government and the state federal government to recuperate money for Fortune 500 Fortune 1000 companies so a lot of our big big business customers have actually 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 property tax all of these other federal government programs.
The worker retention tax credit is a broad based refundable tax credit designed to encourage.
employers to keep staff members on their payroll. The credit is 50% of as much as $10,000 in incomes paid by an.
employer whose organization is totally or partly suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
1. The credit is available to all employers despite size including tax exempt organizations. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) little.
companies who take Small company Loans.
2. To qualify, the employer needs to satisfy one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s company is fully or partly suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross invoices are below 50% of the comparable quarter in 2019. Once the.
employer’s gross invoices exceed 80% of a similar quarter in 2019 they no longer qualify.
after the end of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the certifying salaries paid up to $10,000 in total.
It is effective for wages paid after March 13th and prior to December 31, 2020.
The definition of certifying salaries differs by whether a company had, typically, more or less than.
100 workers in 2019.
Business that specialize in ERC filing support generally supply knowledge and support to assist organizations navigate the intricate procedure of claiming the credit. They can provide different services, consisting of:.
How is the employee retention credit calculated? What Are Qualifying Wages For Employee Retention Credit
Eligibility Evaluation: These companies will evaluate your service’s eligibility for the ERC based upon aspects such as your industry, revenue, and operations. They can assist figure out if you fulfill the requirements for the credit and identify the maximum credit quantity you can declare.
Documents and Computation: ERC filing services will assist in collecting the needed paperwork, such as payroll records and financial statements, to support your claim. They will likewise assist determine the credit quantity based upon eligible wages and other qualifying expenditures.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for previous quarters, these companies can review your previous payroll records and financials to recognize possible chances for retroactive credits. They can assist you change previous income tax return to claim these refunds.
Filing Help: Business specializing in ERC filings will prepare and submit the necessary forms and documents on your behalf. This consists of finishing Form 941 or any other necessary tax forms.
Compliance and Updates: ERC guidelines and guidance have developed over time. These business stay updated with the most recent changes and make sure that your filings adhere to the most current standards. If the IRS demands extra details or conducts an audit associated to your ERC claim, they can also provide ongoing assistance.
It is necessary to research study and veterinarian any company using ERC filing help to guarantee their trustworthiness and know-how. Search for established companies with experience in tax and payroll services, or think about connecting to trusted accounting companies or tax experts who use ERC submitting assistance.
Bear in mind that while these companies can supply valuable support, it’s always a good idea to have a basic understanding of the ERC requirements and process yourself. This will assist you make notified decisions and guarantee precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief procedures. The objective of the ERC is to motivate companies to retain and pay their employees throughout the pandemic, even if their operations have actually been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is available to qualified employers, consisting of for-profit services, tax-exempt organizations, and particular governmental entities. To certify, companies should satisfy one of two requirements:.
The business operations were fully or partly suspended due to a federal government order related to COVID-19.
The business experienced a significant decrease in gross invoices. As mentioned previously, for 2021, a significant decrease is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decrease in gross receipts 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 quantity amounts to a percentage (up to 70%) of qualified incomes paid to employees, consisting of specific health plan expenses. The maximum 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 Defense 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 received a PPP loan. The exact same earnings can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively expanded and enhanced, allowing eligible employers to claim the credit for certified salaries paid as far back as March 13, 2020. This retroactive provision provides an opportunity for businesses to amend prior-year tax returns and receive refunds.
Declaring the Credit: Employers can declare the ERC by reporting it on their work tax returns, generally Type 941. The excess can be reimbursed to the employer if the credit exceeds the quantity of employment taxes owed.
It is necessary to note that the ERC provisions and eligibility criteria have developed gradually. The best strategy is to talk to a tax professional or go to the official IRS site for the most in-depth and up-to-date details relating to the ERC, including any current legislative changes or updates.
To receive the ERC, a service must fulfill one of the following requirements:.
Business operations were totally or partially suspended due to a government order related to COVID-19.
Business experienced a considerable decline in gross invoices. For 2021, a considerable decline is defined as a 20% decrease 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 receipts compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the instantly preceding quarter.
The ERC is available to companies of all sizes, consisting of tax-exempt companies, however there are some exceptions. Government entities and companies that received a PPP loan might have restrictions on claiming the credit.
The process for declaring the ERC includes completing the essential types and including the credit on your employment income tax return (typically Kind 941). The exact time it requires to process the credit can vary based on a number of factors, consisting of the complexity of your organization and the work of the IRS. It’s recommended to consult with a tax professional for assistance particular to your scenario.
There are numerous companies that can assist with the process of claiming the ERC. Some popular business that provide assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the information provided here is based on general understanding and may not reflect the most recent updates or changes to the ERC. It is essential to consult with a tax expert or visit the main internal revenue service website for the most precise and up-to-date details concerning eligibility, declaring procedures, and offered assistance.
Less than 100. If the employer had 100 or less workers on average in 2019, then the credit is based.
on wages paid to all staff members whether they in fact worked or not. Simply put, even if the.
employees 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 workers on average in 2019, then the credit is.
enabled only for wages paid to workers who did not work throughout the calendar quarter.
In both cases, “earnings” consists of not simply cash payments but likewise a part of the cost of company.
offered health care. What Are Qualifying Wages For Employee Retention Credit
Companies can be immediately reimbursed for the credit by decreasing the amount of payroll taxes they.