Lets talk first about What Is The Employee Retention Credit :
Our team here what do these men doing everybody in this space is helping teach people about ERC and uh constantly supply a lovely breakfast and have individuals really learn about the program we should head to the room where we have the ability to display 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 numerous millions of dollars so these are replicate copies of the letters that go to customers verifying that the check is on the method I suggest you understand if you simply begin to look at some of these here I imply this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s simply I suggest think about how many actual customers 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 client so that’s how you’re able to track it you understand when you
receive this you understand the check is gone for sure which’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 until this letter is confirmed the check is on the method they transfer it into their bank account and they can genuinely trust Wonder trust that the procedure has actually been completed and how many you think you’ve processed because you started this we’re about 35 000 of these for
about six billion dollars wow so clearly they know what they’re doing which’s what you need 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 speaking about something actually important today the worker retention credit which most of you have never heard of I definitely had not heard of it till very just recently and learned a lot about it since this is most likely the lowest cost of capital for any small company anywhere
anytime if you have employees 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 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 just call up your bank supervisor and say offer me a loan it does not work there’s not a loan it’s an application and Josh is going to inform us all about it and how to get it and why I have actually become yes the Ambassador and paid spokesperson for this I like this program it’s going away very soon you got to discover all about it let’s talk employee retention credit Josh Fox what is an ERC let’s just begin there so throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act offered services three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody it makes a big difference right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the cash cash payroll tax refund all right go on sorry I simply have to make sure we got that point I indicate that’s a big difference a loan versus cash cash I like cash cash that’s what we’re speaking 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 initial cares Act is the ERC and yes Kevin it is a gorgeous hard check in the mail where you get actual money from the internal revenue service all right so let’s discuss how it works because 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 workers right you had to have owned a company however it’s based upon you having W-2 workers in America not 10.99. As long as you had W-2 employees 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 correct so there were six quarters the program was open well stroll us through the six quarters so you had quarters two three and four of 2020 and you had quarters one two and three of 2021. all right so that’s how it’s measured you need to be on the W-2 throughout that period now let’s talk my preferred part money how much can you get back per worker that was on a W-2 in those 6 quarters so the computation in 2020 to be specific Kevin is 50 of the employee’s salary to an optimum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s income to a maximum of 7 thousand per quarter how did that occur um they just altered the rules in.
2021 versus because the mayhem 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 as much as 5 thousand Max and after that what takes place 21 000 Max in 2021 oh that’s how you create twenty 6 thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty 6 thousand dollars per worker that is since that’s a great deal of cash it is now there’s a caution here the PPP cash would have to be reduced from the twenty 6 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 someplace around 10 thousand dollars an individual 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 obviously now the big concern is why does no one understand about this since look when I first heard about this when I initially satisfied Josh you know I’ve got lots of financial investments in lots 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 initially found out about this I called BS I don’t believe 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 sensibly to survive during the pandemic so when I heard about 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 know about it I indicate that’s how you know that’s how misinformation is that there’s no details out there then a bunch of individuals 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 no one know about the employee retention credit you understand what’s intriguing you’re discussing the banks Kevin because in the PPP loan process the federal government made it very clear that if you wanted 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 just process procedure that’s all um and here there was turmoil since 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 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 ever made it clear to any person about how to.
do this does your CFO understand how to do this not actually he or she’s never done it in the past do the banks do it nope the banks don’t do it the payroll business yeah some of them are doing it as a payroll company your accountant no your accountant’s never ever done this prior to unless you have an account that went into this organization and bottom line my firm Kevin has stayed in business because 2009 and we’ve been working with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 business so a lot of our huge big business customers have actually worked with bottom line to recover other government programs we have actually done sales tax and utilize tax joblessness tax work opportunity tax credits research and development tax credits unclaimed property property tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit created to motivate.
employers to keep employees on their payroll. The credit is 50% of up to $10,000 in earnings paid by an.
employer whose business is totally or partially suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is readily available to all employers no matter size including tax exempt organizations. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
companies who take Small company Loans.
2. To certify, the employer has to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s service is fully or partially suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are below 50% of the similar quarter in 2019. When the.
employer’s gross invoices exceed 80% of a similar 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 qualifying incomes paid up to $10,000 in total.
It is effective for wages paid after March 13th and before December 31, 2020.
The meaning of certifying salaries differs by whether an employer had, typically, more or less than.
100 staff members in 2019.
Business that specialize in ERC filing assistance normally provide expertise and assistance to assist businesses navigate the complicated procedure of claiming the credit. They can offer different services, consisting of:.
How is the employee retention credit calculated? What Is The Employee Retention Credit
Eligibility Evaluation: These companies will examine your business’s eligibility for the ERC based on elements such as your market, earnings, and operations. If you meet the requirements for the credit and recognize the maximum credit amount you can claim, they can assist determine.
Paperwork and Estimation: ERC filing services will help in collecting the necessary documentation, such as payroll records and financial declarations, to support your claim. They will also help calculate the credit quantity based on qualified incomes and other certifying expenditures.
Retroactive Claim Evaluation: If you are eligible to claim the ERC for previous quarters, these business can review your previous payroll records and financials to recognize prospective chances for retroactive credits. They can help you change prior tax returns to claim these refunds.
Filing Help: Business specializing in ERC filings will prepare and submit the necessary kinds and documents on your behalf. This includes finishing Type 941 or any other required tax forms.
Compliance and Updates: ERC policies and guidance have actually evolved over time. These companies stay updated with the most recent modifications and make sure that your filings comply with the most current standards. They can likewise supply ongoing assistance if the IRS requests additional info or carries out an audit related to your ERC claim.
It’s important to research study and vet any business using ERC filing assistance to guarantee their credibility and expertise. Look for established companies with experience in tax and payroll services, or consider reaching out to relied on accounting firms or tax professionals who offer ERC submitting assistance.
Remember that while these business can offer important help, it’s always an excellent idea to have a basic understanding of the ERC requirements and procedure yourself. This will help you make notified 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 steps. The goal of the ERC is to encourage businesses 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 readily available to qualified employers, including for-profit businesses, tax-exempt organizations, and particular governmental entities. To certify, companies must fulfill one of two requirements:.
Business operations were totally or partially suspended due to a federal government order related to COVID-19.
The business experienced a significant decline in gross invoices. As discussed earlier, for 2021, a substantial decline is specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decline in gross receipts compared to the very same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit quantity amounts to a percentage (as much as 70%) of qualified earnings paid to staff members, consisting of particular health insurance costs. The optimum 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 received a Paycheck Defense Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 allows organizations to claim the ERC even if they got a PPP loan. The very same earnings can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and boosted, allowing eligible companies to declare the credit for certified incomes paid as far back as March 13, 2020. This retroactive provision supplies an opportunity for companies to change prior-year tax returns and receive refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their employment income tax return, normally Form 941. The excess can be refunded to the employer if the credit surpasses the quantity of employment taxes owed.
It is essential to note that the ERC provisions and eligibility criteria have progressed with time. The very best strategy is to talk to a tax expert or go to the official internal revenue service site for the most comprehensive and updated details relating to the ERC, including any current legal modifications or updates.
To get approved for the ERC, a business needs to meet among the following requirements:.
The business operations were fully or partially suspended due to a government order related to COVID-19.
Business experienced a significant decrease in gross receipts. For 2021, a significant decline is defined as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a considerable decrease is defined 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 instantly preceding quarter.
The ERC is offered to organizations of all sizes, including tax-exempt companies, but there are some exceptions. For instance, government entities and companies that received a PPP loan might have restrictions on claiming the credit.
The procedure for claiming the ERC involves finishing the essential types and consisting of the credit on your work income tax return (typically Kind 941). The exact time it takes to process the credit can vary based on numerous elements, consisting of the complexity of your company and the work of the IRS. It’s suggested to consult with a tax professional for guidance particular to your situation.
There are a number of business that can assist with the process of declaring the ERC. Some widely known companies that offer support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the information offered here is based upon basic knowledge and may not show the most recent updates or changes to the ERC. It is very important to speak with a tax professional or go to the official IRS site for the most up-to-date and precise info relating to eligibility, claiming treatments, and offered assistance.
Less than 100. The credit is based if the employer had 100 or less employees on average in 2019.
on incomes paid to all workers whether they actually worked or not. Simply put, even if the.
employees 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 staff members on average in 2019.
permitted only for incomes paid to employees who did not work during the calendar quarter.
In both cases, “incomes” includes not just cash payments but likewise a portion of the expense of employer.
offered healthcare. What Is The Employee Retention Credit
Companies can be instantly compensated for the credit by lowering the amount of payroll taxes they.