Lets talk first about What Is The Nonrefundable Portion Of Employee Retention Credit :
Our group here what do these guys doing everyone in this room is assisting teach people about ERC and uh constantly offer a stunning breakfast and have people really find out about the program we ought to head to the room where we have the ability to show a few of the checks that we are getting for business and I ‘d like to see that what is this this is uh numerous millions of 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 way I imply you know if you simply begin to look at some of these here I mean this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I mean 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 confirmed 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 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 do not 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 way they transfer it into their checking account and they can genuinely trust Wonder trust that the process has been ended up and the number of you believe you have actually processed given that you started this we’re about 35 000 of these for
about 6 billion dollars wow so clearly 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 really important today the staff member retention credit which most of you have actually never ever become aware of I certainly had not heard of it up until extremely 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 between five 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 Concepts they’re the biggest processor of these ERC credits this is a 170 page program so it’s challenging this isn’t like PPP we simply call up your bank manager and state give me a loan it does not 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 spokesperson for this I like this program it’s disappearing soon you got to find out all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply start there so throughout the Trump Administration when President Trump was enacted they developed the cares Act and the cares act offered companies three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everybody it makes a big distinction right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the money money payroll tax refund all right go on sorry I simply have to make sure we got that point I suggest that’s a huge distinction a loan versus cash money I like money cash that’s what we’re speaking about okay 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 lovely tough check in the mail where you get real cash from the IRS all right so let’s discuss how it works because it seems 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 money is not for the owner not for people on the cap table not for investors it’s for employees right you needed to have owned a service 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 qualified so you need to be on payroll in 2020 on the W-2 and you have to be on payroll for the first 6 months of 2021 on the W-2 proper so there were 6 quarters the program was open well stroll us through the 6 quarters so you had quarters two 3 and 4 of 2020 and you had quarters one 2 and 3 of 2021. alright so that’s how it’s determined you have to be on the W-2 during that duration now let’s talk my favorite part cash how much can you get back per employee that was on a W-2 in those 6 quarters so the estimation in 2020 to be specific Kevin is 50 of the employee’s wage to an optimum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers escalated to 70 of the worker’s wage to a maximum of seven thousand per quarter how did that happen um they simply altered the rules in.
2021 versus because the chaos 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 develop twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per worker that is because that’s a lot of money it is now there’s a caution here the PPP money would have to be reduced 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 usually Kevin is if you took PPP money someplace around ten thousand dollars a person so let’s say hypothetically you owned a restaurant in New York City where I’m from and you had a hundred staff members and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s substantial undoubtedly now the big concern is why does no one understand about this because appearance when I initially found out about this when I first satisfied Josh you understand I’ve got great deals of investments in great deals of companies I’m a major advocate for entrepreneurship in America and make many numerous investments in business owners of which lots of suffered through the pandemic when I initially found out about this I called BS I don’t think it because I utilize the PPP we went through the cash 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 used them sensibly to stay alive during the pandemic so when I became aware of this I stated nah it can’t hold true but when I dug around I even called to my political leader pals Guv Senators they didn’t understand about it I mean that’s how you know that’s how misinformation is that there’s no info out there then a lot of people informed me well you can’t get it since you took the PPP also not real so let’s ask Josh why does no one learn about the employee retention credit you know what’s fascinating you’re speaking about the banks Kevin since in the PPP loan procedure 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 big 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 process that’s all um and here there was turmoil since keep in mind in the original cares act you could not do both programs so if you had actually 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 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 in the past do the banks do it nope the banks don’t do it the payroll business yeah a few of them are doing it as a payroll company your accountant no your accountant’s never ever done this before unless you have an account that went into this service and bottom line my firm Kevin has actually been in business since 2009 and we have actually been dealing with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 business so a great deal of our big big corporate clients have actually worked with bottom line to recuperate other federal government programs we have actually done sales tax and utilize tax unemployment tax work opportunity tax credits research and development tax credits unclaimed home property tax all of these other government programs.
The staff member retention tax credit is a broad based refundable tax credit developed to encourage.
companies to keep workers on their payroll. The credit is 50% of as much as $10,000 in incomes paid by an.
Due to the fact that of COVID-19 or whose gross invoices, company whose organization is completely or partly suspended.
decline by more than 50%.
1. The credit is readily available to all companies despite size including tax exempt organizations. There are.
just 2 exceptions: (1) state and city governments and their instrumentalities and (2) little.
businesses who take Small Business Loans.
2. To qualify, the employer has to satisfy one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s company is totally or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the comparable quarter in 2019. When the.
company’s gross receipts exceed 80% of a similar quarter in 2019 they no longer certify.
after the end of that quarter.
Computation of the Credit.
The quantity of the credit is 50% of the certifying earnings paid up to $10,000 in total.
It works for earnings paid after March 13th and prior to December 31, 2020.
The meaning of certifying earnings differs by whether a company had, on average, more or less than.
100 employees in 2019.
Business that focus on ERC filing help generally supply knowledge and support to assist services navigate the complex process of claiming the credit. They can provide numerous services, including:.
How is the employee retention credit calculated? What Is The Nonrefundable Portion Of Employee Retention Credit
Eligibility Evaluation: These companies will assess your organization’s eligibility for the ERC based upon elements such as your market, revenue, and operations. If you fulfill the requirements for the credit and identify the optimum credit amount you can declare, they can help determine.
Paperwork and Computation: ERC filing services will assist in collecting the required documents, such as payroll records and financial statements, to support your claim. They will also help compute the credit amount based upon qualified wages and other certifying costs.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for previous quarters, these business can evaluate your past payroll records and financials to identify potential chances for retroactive credits. They can assist you modify previous income tax return to declare these refunds.
Filing Assistance: Companies focusing on ERC filings will prepare and submit the required types and documentation in your place. This includes finishing Form 941 or any other necessary tax forms.
Compliance and Updates: ERC regulations and guidance have evolved with time. These companies remain updated with the most recent changes and make sure that your filings comply with the most present guidelines. They can likewise provide continuous assistance if the internal revenue service demands extra info or carries out an audit related to your ERC claim.
It is necessary to research study and veterinarian any business providing ERC filing assistance to guarantee their credibility and competence. Look for recognized firms with experience in tax and payroll services, or consider reaching out to relied on accounting companies or tax specialists who provide ERC submitting assistance.
Keep in mind that while these companies can supply important help, it’s constantly a good concept to have a fundamental understanding of the ERC requirements and procedure yourself. This will help you make informed decisions and make sure accurate 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 encourage companies to retain and pay their employees during the pandemic, even if their operations have been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to qualified employers, consisting of for-profit services, tax-exempt organizations, and specific governmental entities. To qualify, companies should satisfy one of two criteria:.
Business operations were fully or partly suspended due to a government order related to COVID-19.
Business experienced a substantial decrease in gross invoices. As mentioned earlier, for 2021, a considerable decline is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decrease is specified as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross invoices 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 amount amounts to a percentage (as much as 70%) of certified earnings paid to staff members, consisting of specific health plan expenditures. The optimum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, services that got a Paycheck Protection Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 enables companies to claim the ERC even if they got a PPP loan. The same wages can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and enhanced, enabling qualified employers to declare the credit for qualified wages paid as far back as March 13, 2020. This retroactive arrangement supplies a chance for companies to change prior-year tax returns and receive refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their employment income tax return, generally Kind 941. The excess can be reimbursed to the employer if the credit goes beyond the amount of employment taxes owed.
It’s important to note that the ERC arrangements and eligibility criteria have developed with time. The very best course of action is to talk to a tax expert or visit the main IRS site for the most updated and comprehensive info concerning the ERC, including any recent legal changes or updates.
To get approved for the ERC, a company must meet among the following requirements:.
Business operations were totally or partially suspended due to a government order related to COVID-19.
Business experienced a significant decrease in gross invoices. For 2021, a significant decrease is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a considerable decrease is specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross invoices compared to the right away preceding quarter.
The ERC is available to businesses of all sizes, consisting of tax-exempt companies, however there are some exceptions. For instance, federal government entities and companies that got a PPP loan might have limitations on declaring the credit.
The process for claiming the ERC includes completing the needed types and including the credit on your employment income tax return (generally Kind 941). The exact time it takes to process the credit can differ based upon several elements, including the intricacy of your service and the work of the internal revenue service. It’s suggested to talk to a tax expert for guidance specific to your situation.
There are a number of companies that can help with the procedure of declaring the ERC. Some widely known business that use help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the info provided here is based upon basic understanding and may not show the most current updates or changes to the ERC. It is essential to seek advice from a tax professional or visit the main internal revenue service website for the most up-to-date and accurate details relating to eligibility, claiming procedures, and offered assistance.
Less than 100. The credit is based if the company had 100 or fewer employees on average in 2019.
on salaries paid to all employees whether they actually worked or not. Simply put, even if the.
staff members worked full-time and made money for full time work, the employer still gets the credit.
Greater than 100. If the company had more than 100 workers usually in 2019, then the credit is.
enabled just for salaries paid to employees who did not work throughout the calendar quarter.
In both cases, “salaries” consists of not just cash payments however also a portion of the expense of company.
offered healthcare. What Is The Nonrefundable Portion Of Employee Retention Credit
Employers can be right away repaid for the credit by minimizing the quantity of payroll taxes they.