Lets talk first about What Is The Employee Retention Credit And Who Qualifies :
Our team here what do these people doing everyone in this room is assisting teach people about ERC and uh always supply a stunning breakfast and have individuals really find out about the program we must head to the room where we are able to display 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 actually Kevin numerous countless dollars so these are replicate copies of the letters that go to customers validating that the check is on the method I mean you understand if you just start to 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 indicate it’s just I suggest think of the number of real customers 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 verified and the check is on the mail in the mail from the internal revenue service heading to the consumer so that’s how you’re able to track it you know when you
get this you know the check is chosen sure and that’s when they pay so they don’t pay anything until they really receive the cash they do not pay bottom line Wonder trust anything until this letter is confirmed the check is on the method they transfer it into their checking account and they can truly rely on Wonder trust that the process has been completed and the number of you believe you have actually processed given that 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 need specialists 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 discussing something truly essential today the worker retention credit which most of you have never ever become aware of I certainly had not heard of it up until very just recently and discovered a lot about it due to the fact that this is probably the most affordable cost of capital for any small business anywhere
anytime if you have workers in between 5 and five hundred so I’ve got the expert with me this is Josh Fox he’s the creator and CEO of bottom line Principles 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 call 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 tell all of us about it and how to get it and why I’ve ended up being yes the Ambassador and paid spokesperson for this I enjoy this program it’s disappearing soon you got to find out all about it let’s talk worker retention credit Josh Fox what is an ERC let’s simply start there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act offered services 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone it makes a big distinction right there 2 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 all right go on sorry I simply need to make certain we got that point I imply that’s a big distinction a loan versus cash cash I like cash money that’s what we’re discussing 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 stunning tough check in the mail where you get real money from the IRS all right so let’s discuss how it works since it seems like to me if it’s a if it’s employee retention credit that person needed 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 investors it’s for staff members right you needed to have actually owned an organization but it’s based upon you having W-2 staff members 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 need to be on payroll in 2020 on the W-2 and you have to be on payroll for the very first six 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 2 3 and four of 2020 and you had quarters one two and 3 of 2021. okay so that’s how it’s measured you have to be on the W-2 throughout that duration now let’s talk my preferred part money how much can you get back per worker that was on a W-2 in those six quarters so the estimation in 2020 to be specific Kevin is 50 of the worker’s salary to a maximum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the employee’s wage to a maximum of seven thousand per quarter how did that happen um they just changed the rules in.
2021 versus since the chaos of the pandemic so they wished to even get more to keep those staff members on payroll 100 so if you can get 5 000 per person Max in twenty that was 50 in 2020 as much as 5 thousand Max and then 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 five thousand in twenty twenty that’s twenty 6 thousand dollars per staff member that is because that’s a great deal of cash it is now there’s a caution here the PPP money would have to be reduced from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would minimize 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 dining establishment in New York 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 huge clearly now the big question is why does nobody understand about this due to the fact that appearance when I initially became aware of this when I first fulfilled Josh you understand I’ve got lots of investments in great deals of business I’m a major supporter for entrepreneurship in America and make lots of lots of investments in entrepreneurs of which lots of suffered through the pandemic when I first found out 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 extremely easy to do we had our CEOs call the banks they got their loans which were well been worthy of and we utilized them wisely to survive throughout the pandemic so when I heard about this I said nah it can’t hold true but when I dug around I even called to my politician buddies Governor Senators they didn’t understand about it I mean that’s how you know that’s how false information is that there’s no details out there then a lot of individuals told me well you can’t get it because you took the PPP likewise not true so let’s ask Josh why does no one learn about the worker retention credit you know what’s interesting you’re speaking about the banks Kevin because in the PPP loan process the federal government made it very clear that if you desired 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 because remember in the original cares act you could refrain from doing both programs so if you had actually done PPP you might refrain from doing ERC in the initial program and when they changed the law in 2021 the banks were refraining from 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 any person about how to.
do this does your CFO understand how to do this not truly he or she’s never ever done it previously do the banks do it nope the banks do not do it the payroll business yeah a few of them are doing it as a payroll business your accounting professional no your accountant’s never done this before unless you have an account that went into this organization and bottom line my company Kevin has stayed in business because 2009 and we have actually been working with the federal government and the state government to recuperate money for Fortune 500 Fortune 1000 business so a lot of our big big corporate customers have dealt with bottom line to recover other federal government programs we’ve done sales tax and utilize tax unemployment tax work opportunity 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 motivate.
employers to keep employees on their payroll. The credit is 50% of as much as $10,000 in wages paid by an.
Because of COVID-19 or whose gross invoices, employer whose organization is completely or partly suspended.
decline by more than 50%.
1. The credit is readily available to all companies regardless of size including tax exempt companies. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) little.
businesses who take Small company Loans.
2. To qualify, the company has to meet one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s business 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 similar quarter in 2019. Once the.
company’s gross invoices go above 80% of a similar quarter in 2019 they no longer certify.
after the end of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the qualifying incomes paid up to $10,000 in overall.
It is effective for wages paid after March 13th and prior to December 31, 2020.
The meaning of certifying earnings differs by whether a company had, typically, more or less than.
100 workers in 2019.
Business that focus on ERC filing support normally supply proficiency and assistance to assist companies browse the complicated procedure of claiming the credit. They can provide different services, consisting of:.
How is the employee retention credit calculated? What Is The Employee Retention Credit And Who Qualifies
Eligibility Evaluation: These business will evaluate your organization’s eligibility for the ERC based on factors such as your industry, earnings, and operations. They can assist determine if you meet the requirements for the credit and identify the maximum credit quantity you can claim.
Documentation and Calculation: ERC filing services will assist in collecting the necessary paperwork, such as payroll records and monetary statements, to support your claim. They will likewise help compute the credit quantity based upon eligible earnings and other certifying costs.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for prior quarters, these business can examine your previous payroll records and financials to recognize potential opportunities for retroactive credits. They can assist you amend previous income tax return to declare these refunds.
Filing Help: Business specializing in ERC filings will prepare and submit the needed kinds and paperwork on your behalf. This consists of finishing Kind 941 or any other required tax forms.
Compliance and Updates: ERC policies and assistance have actually progressed over time. These companies stay upgraded with the most recent changes and ensure that your filings adhere to the most current standards. They can also offer ongoing support if the internal revenue service demands additional info or carries out an audit related to your ERC claim.
It is essential to research and veterinarian any business using ERC filing support to guarantee their reliability and proficiency. Look for recognized firms with experience in tax and payroll services, or think about connecting to trusted accounting companies or tax experts who offer ERC submitting assistance.
Remember that while these business can provide valuable help, it’s always a good idea to have a basic understanding of the ERC requirements and process yourself. This will help you make notified decisions and ensure accurate filings.
The Worker Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief measures. The goal of the ERC is to encourage organizations to retain and pay their workers during the pandemic, even if their operations have actually been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to qualified employers, including for-profit services, tax-exempt organizations, and specific governmental entities. To qualify, employers must fulfill one of two requirements:.
The business operations were completely or partly suspended due to a federal government order related to COVID-19.
The business experienced a substantial decline in gross receipts. As discussed previously, for 2021, a substantial decline is defined as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019, or a 20% decrease in gross invoices compared to the right away preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount amounts to a percentage (as much as 70%) of certified salaries paid to staff members, consisting of particular health plan expenses. The maximum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, organizations that got an Income Protection Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 allows services to declare 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 been retroactively broadened and enhanced, permitting eligible employers to declare the credit for certified earnings paid as far back as March 13, 2020. This retroactive provision provides a chance for companies to modify prior-year income tax return and receive refunds.
Claiming the Credit: Companies can declare the ERC by reporting it on their employment tax returns, usually Form 941. If the credit goes beyond the amount of employment taxes owed, the excess can be refunded to the employer.
It is essential to keep in mind that the ERC provisions and eligibility requirements have developed in time. The best strategy is to speak with a tax expert or check out the official IRS site for the most updated and in-depth details relating to the ERC, consisting of any recent legislative modifications or updates.
To get approved for the ERC, a company must meet one of the following criteria:.
The business operations were totally or partly suspended due to a federal government order related to COVID-19.
The business experienced a considerable decrease in gross receipts. For 2021, a substantial decline is defined as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decline in gross invoices compared to the immediately preceding quarter.
The ERC is readily available to services of all sizes, consisting of tax-exempt companies, however there are some exceptions. Government entities and companies that received a PPP loan may have restrictions on declaring the credit.
The procedure for declaring the ERC includes finishing the necessary types and consisting of the credit on your work income tax return (usually Kind 941). The exact time it takes to process the credit can differ based on a number of elements, consisting of the complexity of your company and the workload of the IRS. It’s suggested to seek advice from a tax expert for assistance particular to your situation.
There are a number of business that can assist with the process of claiming the ERC. Some widely known business that use assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the info offered here is based upon general knowledge and may not reflect the most current updates or changes to the ERC. It is essential to consult with a tax professional or go to the main IRS website for the most updated and precise info concerning eligibility, claiming procedures, and readily available support.
Less than 100. The credit is based if the company had 100 or less employees on average in 2019.
on salaries paid to all employees whether they really worked or not. To put it simply, 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.
permitted only for salaries paid to employees who did not work throughout the calendar quarter.
In both cases, “salaries” includes not just cash payments however likewise a portion of the expense of employer.
provided health care. What Is The Employee Retention Credit And Who Qualifies
Companies can be right away repaid for the credit by decreasing the amount of payroll taxes they.