Lets talk first about What Is The Employee Retention Credit Based On :
Our group here what do these men doing everyone in this space is helping teach individuals about ERC and uh constantly provide a beautiful breakfast and have people truly learn more about the program we should head to the room where we have the ability to show some of the checks that we are getting for companies and I ‘d like 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 customers confirming that the check is on the method I imply you understand if you just start to take a look at a few of these here I suggest this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I imply it’s just I imply think of how many actual clients that went through the program yeah this is the very end this is the party at the end when the check is confirmed the numbers are validated and the check is on the mail in the mail from the internal revenue service 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 don’t pay anything up until they actually receive the money 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 checking account and they can really rely on Wonder trust that the process has actually been completed and how many you believe you’ve processed since you began this we have to do with 35 000 of these for
about six billion dollars wow so plainly they know what they’re doing and that’s what you require 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 Wonderful here you’re at my YouTube channel we’re speaking about something actually essential today the employee retention credit which the majority of you have actually never ever heard of I certainly hadn’t become aware of it till extremely just recently and found out a lot about it since this is probably the most affordable cost of capital for any small business anywhere
anytime if you have employees between five and five hundred so I have actually got the professional 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 not easy this isn’t like PPP we just phone your bank supervisor and say 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 ended up being yes the Ambassador and paid spokesperson for this I like this program it’s going away soon you got to discover all about it let’s talk worker retention credit Josh Fox what is an ERC let’s just start there so throughout the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act used companies three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly 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.
remedy the cash money payroll tax refund okay go on sorry I just need to ensure we got that point I suggest that’s a huge distinction a loan versus money cash I like money money that’s what we’re talking about alright 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 gorgeous tough check in the mail where you get actual money from the internal revenue service all right so let’s discuss how it works since it seems like to me if it’s a if it’s worker retention credit that person had to be a staff member so I’m going to make the Assumption this money is not for the owner not for individuals on the cap table not for investors it’s for staff members right you had to have actually owned an organization however it’s based on you having W-2 employees in America not 10.99. As long as you had W-2 workers and you paid federal payroll taxes that’s why you would be qualified so you have 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 proper so there were 6 quarters the program was open well walk us through the six quarters so you had quarters 2 3 and 4 of 2020 and you had quarters one 2 and 3 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 preferred part money just how much can you return per employee that was on a W-2 in those six quarters so the estimation in 2020 to be precise Kevin is 50 of the staff member’s wage to a maximum of 5 thousand dollars per staff member for the year of 2020 and in 2021 the numbers increased to 70 of the employee’s income to an optimum of seven thousand per quarter how did that take place um they simply altered the rules in.
2021 versus since the turmoil of the pandemic so they wanted 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 up to 5 thousand Max and then what happens 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 six 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 reduced from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would minimize the 26 000 so what we’re seeing usually Kevin is if you took PPP cash somewhere around 10 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 workers and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s substantial certainly now the huge question is why does no one know about this due to the fact that appearance when I initially became aware of this when I first satisfied Josh you understand I’ve got lots of investments in lots of business I’m a major supporter for entrepreneurship in America and make lots of numerous investments in entrepreneurs of which many suffered through the pandemic when I initially 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 very easy to do we had our CEOs call the banks they got their loans which were well should have and we used them wisely to stay alive 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 politician buddies Governor Senators they didn’t know about it I mean that’s how you know that’s how false information is that there’s no information out there then a bunch of individuals informed me well you can’t get it due to the fact that you took the PPP likewise not true so let’s ask Josh why does nobody know about the employee retention credit you understand what’s intriguing you’re discussing the banks Kevin because in the PPP loan procedure 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 huge banks in our country 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 keep in mind in the initial cares act you might refrain from doing both programs so if you had done PPP you could not do 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 anybody about how to.
do this does your CFO understand how to do this not really she or he’s never 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 company your accountant no your accountant’s never done this prior to unless you have an account that went into this business and bottom line my firm Kevin has actually been in business given that 2009 and we have actually been working with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 companies so a lot of our big huge business clients have dealt with bottom line to recuperate other federal government programs we’ve done sales tax and use tax joblessness tax work chance tax credits research and development tax credits unclaimed home real estate tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit designed to motivate.
companies to keep workers on their payroll. The credit is 50% of up to $10,000 in incomes paid by an.
Since of COVID-19 or whose gross receipts, company whose company is totally or partially suspended.
decrease by more than 50%.
1. The credit is available to all employers despite size including tax exempt companies. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) little.
companies who take Small company Loans.
2. To qualify, the employer has to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s service is completely or partially suspended by federal 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.
company’s gross receipts exceed 80% of an equivalent quarter in 2019 they no longer qualify.
after the end of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the certifying earnings 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 qualifying incomes differs by whether a company had, usually, more or less than.
100 staff members in 2019.
Business that concentrate on ERC filing support usually offer competence and support to assist businesses browse the intricate procedure of claiming the credit. They can provide numerous services, consisting of:.
How is the employee retention credit calculated? What Is The Employee Retention Credit Based On
Eligibility Assessment: These companies will assess your business’s eligibility for the ERC based upon aspects such as your market, revenue, and operations. They can assist determine if you meet the requirements for the credit and determine the optimum credit quantity you can claim.
Documents and Calculation: ERC filing services will assist in gathering the necessary documents, such as payroll records and monetary declarations, to support your claim. They will also help calculate the credit quantity based upon eligible incomes and other certifying expenses.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for previous quarters, these companies can examine your past payroll records and financials to identify potential opportunities for retroactive credits. They can help you change prior tax returns to claim these refunds.
Filing Assistance: Business concentrating on ERC filings will prepare and submit the needed forms and documentation on your behalf. This includes completing Form 941 or any other required tax forms.
Compliance and Updates: ERC regulations and assistance have progressed in time. These business stay upgraded with the latest modifications and make sure that your filings adhere to the most existing standards. If the Internal revenue service demands additional info or carries out an audit related to your ERC claim, they can likewise provide ongoing support.
It is essential to research and vet any business providing ERC filing support to guarantee their reliability and competence. Look for established companies with experience in tax and payroll services, or think about reaching out to relied on accounting firms or tax experts who use ERC filing assistance.
Remember that while these companies can supply important assistance, it’s constantly an excellent concept to have a standard understanding of the ERC requirements and process yourself. This will help you make notified decisions and guarantee precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief procedures. The goal of the ERC is to encourage services to maintain and pay their workers throughout the pandemic, even if their operations have actually been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to eligible employers, consisting of for-profit companies, tax-exempt companies, and specific governmental entities. To certify, companies need to fulfill one of two requirements:.
The business operations were completely or partially suspended due to a government order related to COVID-19.
The business experienced a considerable decrease in gross receipts. As discussed earlier, for 2021, a significant decrease is defined as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decline in gross receipts compared to the exact same quarter in 2019, or a 20% decline 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 percentage (as much as 70%) of certified earnings paid to employees, including certain health insurance expenses. The optimum 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 Defense Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 enables organizations to declare the ERC even if they got a PPP loan. The exact same incomes can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively broadened and enhanced, enabling eligible companies to declare the credit for qualified wages paid as far back as March 13, 2020. This retroactive arrangement offers a chance for organizations to change prior-year tax returns and get refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their work income tax return, typically Type 941. If the credit surpasses the quantity of employment taxes owed, the excess can be refunded to the employer.
It’s important to note that the ERC provisions and eligibility requirements have evolved in time. The very best strategy is to speak with a tax expert or check out the main IRS website for the most detailed and up-to-date info concerning the ERC, including any current legal modifications or updates.
To qualify for the ERC, a company should meet among the following requirements:.
Business operations were totally or partially suspended due to a government order related to COVID-19.
Business experienced a substantial decline in gross invoices. For 2021, a substantial decline is specified as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a substantial decrease is specified as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decrease in gross invoices compared to the immediately preceding quarter.
The ERC is readily available to services of all sizes, including tax-exempt companies, however there are some exceptions. For instance, federal government entities and organizations that received a PPP loan may have limitations on claiming the credit.
The process for claiming the ERC includes completing the required types and including the credit on your employment income tax return (typically Kind 941). The exact time it takes to process the credit can differ based on a number of aspects, consisting of the complexity of your service and the work of the internal revenue service. It’s recommended to seek advice from a tax professional for assistance particular to your circumstance.
There are numerous business that can assist with the process of claiming the ERC. Some well-known companies that provide help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the information provided here is based upon basic knowledge and may not reflect the most current updates or modifications to the ERC. It is essential to seek advice from a tax professional or visit the official IRS website for the most accurate and updated details concerning eligibility, declaring treatments, and available support.
Less than 100. If the company had 100 or fewer employees on average in 2019, then the credit is based.
on wages paid to all workers whether they actually 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. If the employer had more than 100 employees usually in 2019, then the credit is.
enabled just for incomes paid to staff members who did not work throughout the calendar quarter.
In both cases, “wages” consists of not just cash payments but likewise a portion of the expense of company.
provided healthcare. What Is The Employee Retention Credit Based On
Employers can be instantly reimbursed for the credit by lowering the amount of payroll taxes they.