Lets talk first about What Businesses Qualify For The Employee Retention Credit :
Our group here what do these people doing everyone in this room is helping teach individuals about ERC and uh always provide a beautiful breakfast and have individuals really learn about the program we need to head to the space 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 hundreds of millions of dollars literally Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to clients confirming that the check is on the way I mean you understand if you simply start 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 suggest it’s just I indicate think of how many actual 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 validated and the check is on the mail in the mail from the IRS heading to the customer so that’s how you’re able to track it you understand when you
get this you understand the check is opted for sure which’s when they pay so they do not pay anything till they actually get the cash they do not pay bottom line Wonder trust anything until this letter is verified the check is on the way they transfer it into their bank account and they can genuinely trust Wonder trust that the procedure has actually been completed and the number of you believe you’ve processed considering that you began this we have to do with 35 000 of these for
about 6 billion dollars wow so plainly they understand what they’re doing which’s what you need you need 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 speaking about something truly important today the staff member retention credit which most of you have never become aware of I certainly had not heard of it until extremely just recently and learned a lot about it because this is probably the lowest expense of capital for any small company anywhere
anytime if you have workers between 5 and five hundred so I’ve got the specialist 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 challenging this isn’t like PPP we just call your bank manager and state offer 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’ve ended up being yes the Ambassador and paid representative for this I love this program it’s going away very soon you got to discover all 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 developed the cares Act and the cares act used organizations three 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 distinction right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
remedy the cash money payroll tax refund okay go on sorry I just have to make sure we got that point I imply that’s a huge distinction a loan versus money money I like cash cash 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 original cares Act is the ERC and yes Kevin it is a gorgeous difficult check in the mail where you get actual money from the IRS all right so let’s speak about how it works due to the fact that it sounds like to me if it’s a if it’s worker retention credit that person needed to be an employee so I’m going to make the Presumption this money 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 owned an organization however it’s based upon you having W-2 employees in America not 10.99. so as long as you had W-2 employees 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 correct so there were six quarters the program was open well walk us through the six quarters so you had quarters 2 three and 4 of 2020 and you had quarters one 2 and three of 2021. alright so that’s how it’s determined you need to be on the W-2 throughout that period now let’s talk my favorite part money 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 exact Kevin is 50 of the staff member’s income to an optimum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers escalated to 70 of the staff member’s wage to a maximum of seven thousand per quarter how did that happen um they just altered the rules in.
2021 versus because the mayhem of the pandemic so they wanted 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 after that what happens 21 000 Max in 2021 oh that’s how you develop twenty 6 thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per employee that is because that’s a lot of money it is now there’s a caution here the PPP cash would have to be minimized from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would lower the 26 000 so what we’re seeing on average Kevin is if you took PPP money someplace around ten thousand dollars a person 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 internal revenue service so it’s huge certainly now the huge question is why does nobody learn about this due to the fact that appearance when I initially became aware of this when I first satisfied Josh you know I’ve got great deals of investments in lots of companies I’m a major supporter for entrepreneurship in America and make many many investments in business owners of which numerous 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 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 been worthy of and we utilized them wisely to stay alive during 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 good friends Guv Senators they didn’t understand 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 people informed me well you can’t get it since you took the PPP likewise not true so let’s ask Josh why does no one understand about the employee retention credit you know what’s fascinating you’re talking about the banks Kevin since 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 big 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 original cares act you might refrain from doing both programs so if you had actually done PPP you could refrain from doing ERC in the initial program and when they altered the law in 2021 the banks were refraining from doing ERC because 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 he or she’s never ever done it in the past do the banks do it nope the banks do not do it the payroll companies yeah some of them are doing it as a payroll business your accounting professional no your accounting professional’s never ever done this before unless you have an account that entered into this business and bottom line my company Kevin has actually been in business considering that 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 great deal of our big big corporate clients have dealt with bottom line to recover other federal government programs we’ve 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 government programs.
The staff member retention tax credit is a broad based refundable tax credit designed to motivate.
employers to keep employees on their payroll. The credit is 50% of up to $10,000 in salaries paid by an.
Because of COVID-19 or whose gross invoices, company whose company is totally or partly suspended.
decrease by more than 50%.
1. The credit is readily available to all employers regardless of size including tax exempt organizations. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
companies who take Small company Loans.
2. To certify, the company has to satisfy one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s organization is totally or partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the company’s gross receipts are below 50% of the equivalent quarter in 2019. Once the.
company’s gross invoices go above 80% of a similar quarter in 2019 they no longer certify.
after completion of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the certifying salaries paid up to $10,000 in overall.
It is effective for salaries paid after March 13th and prior to December 31, 2020.
The meaning of certifying wages differs by whether an employer had, on average, more or less than.
100 employees in 2019.
Business that specialize in ERC filing support usually offer know-how and support to help businesses navigate the complicated procedure of declaring the credit. They can use numerous services, including:.
How is the employee retention credit calculated? What Businesses Qualify For The Employee Retention Credit
Eligibility Assessment: These business will assess your organization’s eligibility for the ERC based on factors such as your market, income, and operations. If you meet the requirements for the credit and determine the maximum credit amount you can declare, they can help determine.
Paperwork and Calculation: ERC filing services will assist in collecting the essential documentation, such as payroll records and financial declarations, to support your claim. They will likewise help determine the credit quantity based on eligible salaries and other certifying expenditures.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for previous quarters, these companies can examine your past payroll records and financials to recognize prospective opportunities for retroactive credits. They can help you modify previous tax returns to claim these refunds.
Filing Help: Business concentrating on ERC filings will prepare and send the necessary types and documents in your place. This includes completing Type 941 or any other required tax return.
Compliance and Updates: ERC guidelines and guidance have actually developed in time. These companies remain upgraded with the latest changes and make sure that your filings abide by the most present standards. If the Internal revenue service demands additional details or conducts an audit related to your ERC claim, they can likewise offer continuous assistance.
It is very important to research study and veterinarian any business using ERC filing assistance to guarantee their credibility and expertise. Look for established companies with experience in tax and payroll services, or think about connecting to relied on accounting companies or tax specialists who use ERC submitting assistance.
Keep in mind that while these companies can offer important support, it’s always an excellent idea to have a fundamental 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 introduced by the U.S. federal government as part of COVID-19 relief procedures. The goal of the ERC is to encourage services to retain and pay their staff members throughout the pandemic, even if their operations have actually been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to eligible employers, consisting of for-profit businesses, tax-exempt organizations, and particular governmental entities. To qualify, companies should satisfy one of two requirements:.
The business operations were totally or partly suspended due to a federal government order related to COVID-19.
Business experienced a substantial decrease in gross receipts. As pointed out previously, for 2021, a significant decrease is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decline in gross receipts compared to the exact 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 employer’s share of Social Security taxes. The credit amount amounts to a portion (up to 70%) of qualified wages paid to employees, including specific health plan expenses. The maximum credit per staff member is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, businesses that received a Paycheck Protection Program (PPP) loan were not eligible 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 very same wages can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and boosted, allowing eligible employers to claim the credit for qualified salaries paid as far back as March 13, 2020. This retroactive provision offers an opportunity for companies to change prior-year income tax return and get refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their work income tax return, normally Form 941. The excess can be refunded to the company if the credit surpasses the quantity of work taxes owed.
It is essential to keep in mind that the ERC provisions and eligibility requirements have progressed gradually. The best course of action is to speak with a tax expert or check out the official internal revenue service site for the most in-depth and current information regarding the ERC, consisting of any recent legislative changes or updates.
To get approved for the ERC, an organization should satisfy among the following criteria:.
Business operations were totally or partially suspended due to a federal government order related to COVID-19.
Business experienced a substantial decrease in gross receipts. For 2021, a significant decrease is specified as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decrease is specified as a 20% decline in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross invoices compared to the right away preceding quarter.
The ERC is available to businesses of all sizes, consisting of tax-exempt organizations, however there are some exceptions. Federal government entities and organizations that received a PPP loan may have constraints on declaring the credit.
The process for claiming the ERC involves completing the needed kinds and including the credit on your work income tax return (typically Form 941). The exact time it takes to process the credit can differ based upon several elements, including the intricacy of your service and the work of the internal revenue service. It’s recommended to speak with a tax professional for assistance particular to your scenario.
There are a number of business that can help with the process of claiming the ERC. Some widely known companies that provide support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the info provided here is based upon general knowledge and may not show the most recent updates or changes to the ERC. It is very important to speak with a tax expert or go to the official internal revenue service website for the most up-to-date and precise details regarding eligibility, declaring procedures, and available help.
Less than 100. If the company had 100 or less workers on average in 2019, then the credit is based.
on wages paid to all staff members whether they really 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.
enabled just for salaries paid to workers who did not work during the calendar quarter.
In both cases, “wages” includes not simply money payments however also a portion of the cost of employer.
provided health care. What Businesses Qualify For The Employee Retention Credit
Companies can be right away reimbursed for the credit by minimizing the quantity of payroll taxes they.