Lets talk first about What Are The Rules For The Employee Retention Credit :
Our team here what do these guys doing everyone in this room is helping teach individuals about ERC and uh constantly provide a stunning breakfast and have people actually discover the program we must head to the space where we are able to display some of the checks that we are getting for business and I wish to see that what is this this is uh numerous countless dollars literally Kevin hundreds of millions of dollars so these are duplicate copies of the letters that go to clients confirming that the check is on the method I suggest you know if you just begin to look at a few of these here I mean this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I mean it’s just I suggest think of 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 verified the numbers are confirmed and the check is on the mail in the mail from the IRS heading to the consumer so that’s how you have the ability to track it you know when you
receive this you understand the check is gone for sure and that’s when they pay so they do not pay anything up until they in fact get the cash they don’t pay bottom line Wonder trust anything up until this letter is verified the check is on the way they deposit it into their savings account and they can really rely on Wonder trust that the process has actually been finished and the number of you believe you have actually processed because you started this we have to do with 35 000 of these for
about six billion dollars wow so plainly they understand what they’re doing which’s what you require you require professionals 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 speaking about something really essential today the worker retention credit which the majority of you have actually never ever heard of I definitely hadn’t heard of it until very recently and discovered a lot about it since this is probably the lowest expense of capital for any small business anywhere
anytime if you have workers in between 5 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 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 manager and say give me a loan it doesn’t 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 ended up being yes the Ambassador and paid representative for this I love this program it’s going away very soon you got to find out all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply begin there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act used 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 big distinction right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the money money payroll tax refund fine go on sorry I just need to make sure we got that point I imply that’s a huge distinction a loan versus cash cash I like money money that’s what we’re talking about all right 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 lovely difficult check in the mail where you get actual 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 worker retention credit that person needed 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 had to have actually owned a company however it’s based on you having W-2 workers 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 very first 6 months of 2021 on the W-2 right so there were six quarters the program was open well walk us through the six quarters so you had quarters two three and four of 2020 and you had quarters one 2 and three of 2021. fine so that’s how it’s determined you need to be on the W-2 during that period now let’s talk my favorite part money how much can you return per worker 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 five thousand dollars per staff member for the year of 2020 and in 2021 the numbers increased to 70 of the employee’s wage to an optimum of seven thousand per quarter how did that occur um they simply altered the rules in.
2021 versus because the mayhem 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 after that what occurs 21 000 Max in 2021 oh that’s how you come up with twenty 6 thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty 6 thousand dollars per worker 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 minimized 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 someplace around ten 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 staff members and you took PPP money you would still get a million dollar in the mail from the IRS so it’s substantial obviously now the huge concern is why does nobody know about this because appearance when I initially heard about this when I initially fulfilled Josh you know I have actually got great deals of financial investments in great deals of business I’m a major advocate for entrepreneurship in America and make numerous lots of investments in entrepreneurs of which many suffered through the pandemic when I initially found out about this I called BS I do not think it because I utilize 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 wisely to stay alive throughout the pandemic so when I became aware of this I said nah it can’t be true however when I dug around I even called to my politician 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 info out there then a bunch of people told me well you can’t get it since you took the PPP likewise not real so let’s ask Josh why does no one know about the worker retention credit you understand what’s interesting you’re talking about 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 huge banks in our country and they would process procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s just procedure process that’s all um and here there was turmoil because remember in the original cares act you could refrain from doing both programs so if you had 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 federal 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 in the past 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 accounting professional’s never ever done this prior to unless you have an account that went into this organization and bottom line my firm Kevin has been in business given that 2009 and we have actually been dealing with the federal government and the state government to recover money for Fortune 500 Fortune 1000 business so a great deal of our huge huge business clients have actually dealt with bottom line to recuperate other federal government programs we’ve done sales tax and use tax unemployment tax work chance tax credits research and development tax credits unclaimed home real estate tax all of these other government programs.
The staff member retention tax credit is a broad based refundable tax credit designed to encourage.
companies to keep staff members on their payroll. The credit is 50% of approximately $10,000 in salaries paid by an.
Since of COVID-19 or whose gross receipts, company whose company is completely or partially suspended.
decline by more than 50%.
1. The credit is available to all employers no matter size including tax exempt organizations. There are.
just 2 exceptions: (1) state and city governments and their instrumentalities and (2) little.
organizations who take Small Business Loans.
2. To qualify, the employer needs to meet one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s company is fully or partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross invoices are below 50% of the similar quarter in 2019. Once the.
employer’s gross receipts go above 80% of a comparable 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 salaries paid up to $10,000 in total.
It works for wages paid after March 13th and prior to December 31, 2020.
The definition of qualifying salaries varies by whether an employer had, on average, basically than.
100 staff members in 2019.
Companies that specialize in ERC filing help usually offer proficiency and assistance to help organizations browse the complicated process of claiming the credit. They can provide different services, including:.
How is the employee retention credit calculated? What Are The Rules For The Employee Retention Credit
Eligibility Assessment: These companies will examine your business’s eligibility for the ERC based upon factors such as your market, income, and operations. They can help figure out if you meet the requirements for the credit and identify the maximum credit quantity you can declare.
Paperwork and Computation: ERC filing services will assist in gathering the required documents, such as payroll records and financial statements, to support your claim. They will likewise assist determine the credit amount based upon qualified wages and other certifying expenditures.
Retroactive Claim Evaluation: If you are eligible to claim the ERC for prior quarters, these companies can examine your past payroll records and financials to determine possible chances for retroactive credits. They can help you change previous income tax return to claim these refunds.
Filing Support: Business specializing in ERC filings will prepare and submit the necessary kinds and documents in your place. This includes finishing Kind 941 or any other required tax return.
Compliance and Updates: ERC guidelines and assistance have developed over time. These companies stay updated with the current changes and ensure that your filings abide by the most existing guidelines. They can likewise supply continuous support if the IRS requests extra info or performs an audit related to your ERC claim.
It’s important to research and veterinarian any company offering ERC filing assistance to guarantee their credibility and know-how. Try to find established companies with experience in tax and payroll services, or consider connecting to trusted accounting companies or tax experts who provide ERC submitting assistance.
Keep in mind that while these companies can provide valuable help, it’s always a great concept to have a fundamental understanding of the ERC requirements and process yourself. This will help you make informed choices and make sure precise filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief procedures. The objective of the ERC is to motivate businesses to maintain and pay their workers throughout the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to qualified companies, consisting of for-profit organizations, tax-exempt companies, and particular governmental entities. To qualify, employers need to fulfill one of two requirements:.
Business operations were fully or partly suspended due to a federal government order related to COVID-19.
Business experienced a substantial decline in gross invoices. As discussed earlier, for 2021, a considerable decline is specified as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a considerable decrease is specified as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decrease in gross receipts 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 certified wages paid to staff members, consisting of specific health plan expenses. The optimum credit per staff member 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 Protection Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 allows organizations to claim the ERC even if they got a PPP loan. The same incomes can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively broadened and improved, allowing eligible employers to declare the credit for certified earnings paid as far back as March 13, 2020. This retroactive arrangement provides a chance for services to amend prior-year tax returns and get refunds.
Declaring the Credit: Employers can declare the ERC by reporting it on their work tax returns, generally Form 941. The excess can be reimbursed to the employer if the credit surpasses the quantity of work taxes owed.
It’s important to keep in mind that the ERC arrangements and eligibility requirements have developed over time. The very best strategy is to talk to a tax professional or visit the official IRS site for the most current and in-depth details concerning the ERC, including any recent legal changes or updates.
To qualify for the ERC, a service must satisfy among the following requirements:.
The business operations were totally or partially suspended due to a government order related to COVID-19.
The business experienced a significant decrease in gross receipts. For 2021, a substantial decrease is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross receipts compared to the right away preceding quarter.
The ERC is offered to services of all sizes, consisting of tax-exempt organizations, but there are some exceptions. Government entities and companies that got a PPP loan may have limitations on declaring the credit.
The procedure for claiming the ERC involves finishing the required kinds and consisting of 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 aspects, consisting of the intricacy of your business and the work of the IRS. It’s suggested to speak with a tax professional for assistance particular to your situation.
There are a number of companies that can assist with the process of claiming the ERC. Some well-known companies that provide assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the details supplied here is based on general understanding and may not show the most current updates or changes to the ERC. It is very important to talk to a tax professional or go to the official internal revenue service site for the most current and accurate information concerning eligibility, declaring procedures, and offered assistance.
Less than 100. The credit is based if the employer had 100 or less workers on average in 2019.
on wages paid to all workers whether they in fact worked or not. In other words, even if the.
workers worked full-time and got paid for full-time work, the employer still gets the credit.
Greater than 100. The credit is if the employer had more than 100 staff members on average in 2019.
allowed just for wages paid to staff members who did not work during the calendar quarter.
In both cases, “incomes” consists of not just money payments but also a portion of the expense of company.
offered healthcare. What Are The Rules For The Employee Retention Credit
Employers can be instantly repaid for the credit by decreasing the amount of payroll taxes they.