Lets talk first about What Does Employee Retention Credit Mean :
Our group here what do these men doing everyone in this room is assisting teach people about ERC and uh always offer a stunning breakfast and have individuals truly learn about the program we need to head to the space where we have the ability 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 millions of dollars literally Kevin hundreds of countless dollars so these are replicate copies of the letters that go to clients validating that the check is on the method I suggest you know if you just start to take a 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 suggest it’s simply I indicate think of how many real clients that went through the program yeah this is the very end this is the party 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 customer so that’s how you’re able to track it you understand when you
receive this you understand the check is chosen sure which’s when they pay so they do not pay anything until they actually receive the cash they do not pay bottom line Wonder trust anything up until this letter is verified the check is on the method they transfer it into their checking account and they can genuinely trust Wonder trust that the procedure has been finished and how many you believe you’ve processed since 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 specialists 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 discussing something actually crucial today the employee retention credit which the majority of you have never heard of I definitely had not become aware of it till really recently and found out a lot about it since this is probably the lowest cost of capital for any small company anywhere
anytime if you have employees between 5 and five hundred so I have actually got the expert with me this is Josh Fox he’s the creator and CEO of bottom line Principles 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 call up your bank manager and state provide me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to tell all of us about it and how to get it and why I have actually become yes the Ambassador and paid representative for this I like this program it’s disappearing soon you got to learn all about it let’s talk employee retention credit Josh Fox what is an ERC let’s just start there so throughout the Trump Administration when President Trump was enacted they created 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 difference right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
fix 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 cash cash I like money money that’s what we’re talking about 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 hard check in the mail where you get actual money from the internal revenue service all right so let’s speak about how it works since it sounds like to me if it’s a if it’s worker retention credit that person had to be a worker so I’m going to make the Assumption this money is not for the owner not for people on the cap table not for shareholders it’s for workers right you had to have owned an organization but it’s based on you having W-2 employees in America not 10.99. so as long as you had W-2 workers and you paid federal payroll taxes that’s why you would be eligible so you need 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 proper so there were 6 quarters the program was open well stroll us through the six quarters so you had quarters 2 3 and four of 2020 and you had quarters one two and three of 2021. okay so that’s how it’s measured you need to be on the W-2 throughout that duration now let’s talk my favorite part money just how much can you get back per employee that was on a W-2 in those 6 quarters so the computation in 2020 to be specific Kevin is 50 of the worker’s income to a maximum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers escalated to 70 of the worker’s salary to an optimum of seven thousand per quarter how did that take place um they just altered the rules in.
2021 versus because the chaos 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 then what occurs 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 staff member that is because that’s a great deal of money it is now there’s a caveat here the PPP money would have to be lowered from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would reduce the 26 000 so what we’re seeing on average Kevin is if you took PPP cash someplace around ten thousand dollars a person so let’s state hypothetically you owned a restaurant in New York 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 substantial clearly now the huge concern is why does nobody learn about this because look when I initially heard about this when I initially fulfilled Josh you know I’ve got great deals of financial investments in great deals of companies I’m a significant supporter for entrepreneurship in America and make lots of many investments in entrepreneurs of which many suffered through the pandemic when I first heard about this I called BS I do not think it since 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 deserved and we used them carefully to stay alive during the pandemic so when I heard about this I stated nah it can’t be true but when I dug around I even called to my politician buddies Guv Senators they didn’t understand about it I mean that’s how you know that’s how misinformation is that there’s no information out there then a lot of people told me well you can’t get it since you took the PPP likewise not true so let’s ask Josh why does nobody know about the staff member retention credit you know what’s fascinating you’re speaking about the banks Kevin because in the PPP loan process the federal government made it really clear that if you wanted 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 just process process that’s all um and here there was mayhem since remember in the initial cares act you could not do both programs so if you had done PPP you could 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 ever made it clear to anyone about how to.
do this does your CFO understand how to do this not truly she or he’s never ever done it in the past do the banks do it nope the banks don’t do it the payroll companies yeah some 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 went into this service and bottom line my firm Kevin has actually been in business given that 2009 and we’ve been working with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 companies so a great deal of our big huge business customers have actually worked with bottom line to recuperate other federal government programs we’ve done sales tax and utilize tax joblessness 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 encourage.
companies to keep workers on their payroll. The credit is 50% of approximately $10,000 in salaries paid by an.
Due to the fact that of COVID-19 or whose gross invoices, employer whose business is fully or partially suspended.
decrease by more than 50%.
1. The credit is offered to all employers regardless of size consisting of tax exempt organizations. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) little.
services who take Small Business Loans.
2. To qualify, the employer has to fulfill one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s business is totally or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are below 50% of the equivalent quarter in 2019. Once the.
company’s gross invoices exceed 80% of a similar 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 certifying incomes 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 incomes differs by whether a company had, usually, basically than.
100 workers in 2019.
Business that specialize in ERC filing assistance normally supply competence and support to assist companies navigate the complex procedure of declaring the credit. They can use numerous services, consisting of:.
How is the employee retention credit calculated? What Does Employee Retention Credit Mean
Eligibility Assessment: These business will examine your organization’s eligibility for the ERC based upon factors such as your market, earnings, and operations. If you fulfill the requirements for the credit and determine the maximum credit amount you can declare, they can help figure out.
Paperwork and Estimation: ERC filing services will assist in gathering the essential paperwork, such as payroll records and financial statements, to support your claim. They will also assist compute the credit quantity based upon qualified earnings and other qualifying expenses.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for prior quarters, these business can review your past payroll records and financials to recognize possible opportunities for retroactive credits. They can help you amend previous tax returns to claim these refunds.
Filing Assistance: Business focusing on ERC filings will prepare and submit the needed types and documents on your behalf. This includes completing Form 941 or any other necessary tax return.
Compliance and Updates: ERC regulations and assistance have developed in time. These companies remain updated with the latest changes and guarantee that your filings abide by the most existing standards. They can also supply continuous support if the IRS demands additional information or carries out an audit related to your ERC claim.
It is very important to research and veterinarian any business using ERC filing support to guarantee their credibility and proficiency. Search for established companies with experience in tax and payroll services, or consider reaching out to relied on accounting companies or tax experts who provide ERC filing assistance.
Keep in mind that while these business can supply valuable assistance, it’s constantly a good idea to have a basic understanding of the ERC requirements and process yourself. This will assist you make informed choices and guarantee precise filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief measures. The goal of the ERC is to encourage organizations to keep 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 available to qualified companies, consisting of for-profit businesses, tax-exempt companies, and specific governmental entities. To qualify, employers must meet one of two criteria:.
The business operations were completely or partly suspended due to a federal government order related to COVID-19.
The business experienced a significant decline in gross receipts. As mentioned previously, for 2021, a considerable decline is specified as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decline is defined as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decline 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 is equal to a portion (as much as 70%) of certified salaries paid to employees, including certain health insurance costs. 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: Initially, businesses that received an Income Defense Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 enables services to declare the ERC even if they got a PPP loan. However, the very same wages can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively broadened and boosted, allowing qualified employers to declare the credit for certified wages paid as far back as March 13, 2020. This retroactive provision supplies an opportunity for companies to amend prior-year income tax return and get refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their employment income tax return, normally Type 941. If the credit exceeds the quantity of employment taxes owed, the excess can be reimbursed to the company.
It’s important to note that the ERC arrangements and eligibility requirements have evolved over time. The very best strategy is to consult with a tax professional or visit the official IRS site for the most in-depth and updated info relating to the ERC, including any recent legal modifications or updates.
To qualify for the ERC, an organization needs to meet among the following requirements:.
The business operations were fully or partially suspended due to a federal government order related to COVID-19.
Business experienced a significant decline 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 substantial 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.
The ERC is available to companies of all sizes, consisting of tax-exempt companies, however there are some exceptions. For instance, federal government entities and organizations that got a PPP loan might have restrictions on claiming the credit.
The procedure for claiming the ERC involves completing the essential types and consisting of the credit on your work tax return (usually Type 941). The exact time it requires to process the credit can differ based on numerous factors, including the complexity of your organization and the workload of the IRS. It’s advised to seek advice from a tax expert for guidance particular to your circumstance.
There are numerous business that can help with the procedure of claiming the ERC. Some well-known business that provide support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the info provided here is based on general knowledge and may not reflect the most current updates or modifications to the ERC. It’s important to talk to a tax expert or go to the official IRS site for the most precise and updated information concerning eligibility, claiming treatments, and readily available help.
Less than 100. If the employer had 100 or less workers typically in 2019, then the credit is based.
on incomes paid to all workers whether they actually worked or not. Simply put, even if the.
employees worked full-time and got paid for full-time work, the employer still gets the credit.
Greater than 100. The credit is if the company had more than 100 workers on average in 2019.
enabled just for salaries paid to staff members who did not work throughout the calendar quarter.
In both cases, “salaries” includes not just money payments but likewise a part of the cost of employer.
supplied healthcare. What Does Employee Retention Credit Mean
Employers can be immediately repaid for the credit by lowering the quantity of payroll taxes they.