Lets talk first about What Is An Employee Retention Credit :
Our team here what do these people doing everyone in this space is helping teach people about ERC and uh always offer a lovely breakfast and have people truly learn about the program we should head to the space where we have the ability to show some of the checks that we are getting for companies and I wish to see that what is this this is uh numerous millions of dollars literally Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to clients validating that the check is on the method I imply you understand if you just begin 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 imply it’s simply I indicate think about how many actual customers 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 client so that’s how you have the ability to track it you understand when you
receive this you understand the check is chosen sure and that’s when they pay so they do not pay anything up until they really get the cash they don’t pay bottom line Wonder trust anything up until this letter is confirmed the check is on the method they transfer it into their bank account and they can truly trust Wonder trust that the process has been completed and the number of you think you have actually processed considering that you started this we’re about 35 000 of these for
about six billion dollars wow so plainly they understand what they’re doing and that’s what you require you need 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 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 become aware of I certainly had not become aware of it until very recently and found out a lot about it due to the fact that this is probably the lowest expense of capital for any small company anywhere
anytime if you have employees between five and five hundred so I’ve got the professional 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 contact your bank manager and say give me a loan it does not work there’s not a loan it’s an application and Josh is going to tell 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 enjoy this program it’s going away soon you got to discover everything about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply start there so during the Trump Administration when President Trump was enacted they came up with 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 almost everyone 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.
fix the cash money payroll tax refund all right go on sorry I simply have to make sure we got that point I imply that’s a huge distinction a loan versus money 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 original cares Act is the ERC and yes Kevin it is a lovely hard check in the mail where you get actual cash from the internal revenue service all right so let’s talk about how it works since it sounds 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 shareholders it’s for staff members right you had to have actually owned a business but it’s based on 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 eligible so you have to be on payroll in 2020 on the W-2 and you have 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 stroll us through the six quarters so you had quarters 2 3 and four of 2020 and you had quarters one 2 and three of 2021. okay so that’s how it’s determined you have to be on the W-2 during that duration now let’s talk my preferred part cash just how much can you get back per staff member that was on a W-2 in those six quarters so the computation in 2020 to be exact Kevin is 50 of the staff member’s income to an optimum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the worker’s income to an optimum of 7 thousand per quarter how did that occur um they just altered the rules in.
2021 versus due to the fact that the chaos 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 up to 5 thousand Max and after that what occurs 21 000 Max in 2021 oh that’s how you create twenty 6 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 since that’s a lot of cash 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 2 you would reduce the 26 000 so what we’re seeing usually Kevin is if you took PPP money somewhere around 10 thousand dollars a person so let’s say hypothetically you owned a restaurant in New york city City where I’m from and you had a hundred workers and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s big clearly now the big concern is why does no one know about this since look when I initially found out about this when I first met Josh you know I’ve got lots of investments in great deals of companies I’m a significant supporter for entrepreneurship in America and make lots of lots of investments in business owners of which lots of suffered through the pandemic when I first heard about this I called BS I do not think it because I utilize 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 should have and we utilized them wisely to survive 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 called to my political leader pals Governor Senators they didn’t know about it I suggest that’s how you understand that’s how misinformation is that there’s no info out there then a bunch of people informed me well you can’t get it due to the fact that you took the PPP also not real so let’s ask Josh why does nobody know about the employee retention credit you know what’s interesting you’re discussing the banks Kevin because in the PPP loan process the federal government made it extremely 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 process in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply process procedure that’s all um and here there was mayhem because remember in the initial cares act you might refrain from doing both programs so if you had actually done PPP you might not do ERC in the original program and when they changed the law in 2021 the banks were refraining from 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 actually he or she’s never ever done it before 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 business your accounting professional no your accountant’s never ever done this before unless you have an account that went into this company and bottom line my company Kevin has actually been in business because 2009 and we’ve been dealing with the federal government and the state government to recuperate money for Fortune 500 Fortune 1000 business so a great deal of our huge huge business clients have dealt with bottom line to recover other government programs we’ve done sales tax and use tax unemployment tax work opportunity tax credits research and development tax credits unclaimed property real estate tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit designed to encourage.
employers to keep workers on their payroll. The credit is 50% of as much as $10,000 in earnings paid by an.
company whose organization is totally or partially suspended because of COVID-19 or whose gross invoices.
decrease by more than 50%.
1. The credit is readily available to all companies regardless of size including tax exempt organizations. There are.
just 2 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 computed each.
calendar quarter– Either.
o the employer’s organization is completely or partly suspended by government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross receipts are below 50% of the comparable quarter in 2019. When the.
employer’s gross receipts go above 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 qualifying salaries paid up to $10,000 in total.
It works for wages paid after March 13th and before December 31, 2020.
The meaning of qualifying salaries varies by whether an employer had, on average, more or less than.
100 workers in 2019.
Business that specialize in ERC filing help generally offer knowledge and support to help companies navigate the complex process of declaring the credit. They can offer various services, consisting of:.
How is the employee retention credit calculated? What Is An Employee Retention Credit
Eligibility Assessment: These business will examine your company’s eligibility for the ERC based upon aspects such as your market, income, and operations. They can help identify if you fulfill the requirements for the credit and determine the maximum credit amount you can declare.
Documents and Estimation: ERC filing services will assist in collecting the needed documentation, such as payroll records and financial statements, to support your claim. They will likewise assist determine the credit quantity based on qualified incomes and other certifying expenses.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for previous quarters, these companies can evaluate your past payroll records and financials to determine possible chances for retroactive credits. They can assist you amend previous tax returns to claim these refunds.
Filing Assistance: Companies focusing on ERC filings will prepare and send the necessary kinds and documents on your behalf. This includes completing Kind 941 or any other necessary tax forms.
Compliance and Updates: ERC guidelines and guidance have actually developed with time. These companies remain updated with the latest changes and make sure that your filings comply with the most existing guidelines. If the Internal revenue service demands extra information or performs an audit related to your ERC claim, they can likewise supply ongoing support.
It is essential to research and vet any business using ERC filing support to guarantee their reliability and expertise. Search for recognized firms with experience in tax and payroll services, or consider connecting to trusted accounting companies or tax professionals who provide ERC submitting assistance.
Remember that while these business can provide important support, it’s always an excellent concept to have a basic understanding of the ERC requirements and procedure yourself. This will assist you make informed decisions and guarantee 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 steps. The objective of the ERC is to motivate companies to retain and pay their workers during the pandemic, even if their operations have actually been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to eligible employers, consisting of for-profit organizations, tax-exempt organizations, and particular governmental entities. To qualify, companies need to meet one of two criteria:.
Business operations were fully or partly suspended due to a government order related to COVID-19.
The business experienced a significant decrease in gross receipts. As discussed earlier, for 2021, a considerable decrease is specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019, or a 20% decline 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 amount amounts to a percentage (approximately 70%) of qualified salaries paid to employees, including specific health plan costs. The maximum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, companies that received an Income Security 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. Nevertheless, the same wages can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and improved, enabling qualified companies to claim the credit for certified incomes paid as far back as March 13, 2020. This retroactive arrangement provides an opportunity for businesses to amend prior-year tax returns and get refunds.
Claiming the Credit: Companies can declare the ERC by reporting it on their employment tax returns, usually Kind 941. The excess can be reimbursed to the company if the credit surpasses the quantity of work taxes owed.
It is very important to note that the ERC arrangements and eligibility criteria have actually developed with time. The best strategy is to talk to a tax professional or go to the official internal revenue service site for the most up-to-date and comprehensive details concerning the ERC, including any recent legal changes or updates.
To get approved for the ERC, an organization should fulfill among the following criteria:.
The business operations were completely or partially suspended due to a government order related to COVID-19.
The business experienced a substantial decrease in gross receipts. For 2021, a substantial decline is defined 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 receipts compared to the very same quarter in 2019, or a 20% decrease in gross receipts compared to the right away preceding quarter.
The ERC is available to organizations of all sizes, consisting of tax-exempt organizations, but there are some exceptions. Federal government entities and companies that got a PPP loan might have restrictions on claiming the credit.
The procedure for claiming the ERC involves finishing the needed types and including the credit on your employment tax return (usually Form 941). The exact time it requires to process the credit can differ based upon a number of factors, consisting of the intricacy of your organization and the workload of the internal revenue service. It’s recommended to talk to a tax expert for assistance specific to your circumstance.
There are numerous business that can aid with the process of declaring the ERC. These include accounting firms, tax advisory services, and payroll provider. Some widely known companies that use assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research and contact these companies directly to ask about their costs and services.
Please keep in mind that the information offered here is based on general understanding and may not reflect the most current updates or changes to the ERC. It’s important to talk to a tax professional or visit the official internal revenue service website for the most up-to-date and accurate info concerning eligibility, declaring treatments, and available help.
Less than 100. The credit is based if the employer had 100 or less workers on average in 2019.
on earnings paid to all workers whether they really worked or not. To put it simply, even if the.
staff members worked full-time and earned money for full-time work, the employer still gets the credit.
Greater than 100. The credit is if the company had more than 100 employees on average in 2019.
allowed only for incomes paid to staff members who did not work throughout the calendar quarter.
In both cases, “wages” consists of not just money payments however likewise a portion of the expense of employer.
offered healthcare. What Is An Employee Retention Credit
Employers can be immediately reimbursed for the credit by minimizing the amount of payroll taxes they.