Lets talk first about What Is The Refundable Portion Of Employee Retention Credit :
Our group here what do these guys doing everybody in this space is assisting teach people about ERC and uh constantly supply a beautiful breakfast and have people really learn about the program we must head to the space where we are able to show a few of the checks that we are getting for companies and I wish to see that what is this this is uh numerous countless dollars actually Kevin hundreds of countless dollars so these are duplicate copies of the letters that go to customers verifying that the check is on the way I indicate you know if you simply begin to take a 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 indicate it’s simply I imply think of the number of real clients 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 confirmed and the check is on the mail in the mail from the IRS heading to the customer so that’s how you’re able to track it you know when you
receive this you understand the check is chosen 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 validated the check is on the method they deposit it into their bank account and they can genuinely rely on Wonder trust that the process has been ended up and how many you believe you’ve processed since you began this we’re about 35 000 of these for
about 6 billion dollars wow so clearly they understand what they’re doing which’s what you need you require professionals 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 Terrific here you’re at my YouTube channel we’re talking about something really crucial today the employee retention credit which most of you have never become aware of I definitely hadn’t become aware of it till really recently and learned a lot about it because this is most likely the most affordable expense of capital for any small company anywhere
anytime if you have staff members 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 Concepts 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 phone your bank supervisor and state give me a loan it doesn’t 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 enjoy this program it’s disappearing very soon you got to find out all about it let’s talk worker retention credit Josh Fox what is an ERC let’s just start there so during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act provided organizations 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.
fix the cash cash payroll tax refund alright go on sorry I simply need to make sure we got that point I imply that’s a huge difference a loan versus money money I like money money 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 original cares Act is the ERC and yes Kevin it is a gorgeous hard check in the mail where you get real cash from the internal revenue service all right so let’s talk about how it works since it seems like to me if it’s a if it’s employee retention credit that person had to be a worker so I’m going to make the Assumption this money is not for the owner not for individuals on the cap table not for shareholders it’s for employees right you had to have actually owned an organization however it’s based upon 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 very first six months of 2021 on the W-2 correct so there were 6 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 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 cash just 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 salary to an optimum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers escalated to 70 of the staff member’s wage to an optimum of seven thousand per quarter how did that take place um they simply altered the rules in.
2021 versus since 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 approximately five thousand Max and then what occurs 21 000 Max in 2021 oh that’s how you develop twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty 6 thousand dollars per employee that is because that’s a lot of money it is now there’s a caveat here the PPP cash would need to be decreased 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 on average Kevin is if you took PPP cash somewhere around 10 thousand dollars an individual so let’s say hypothetically you owned a dining establishment in New york city 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 IRS so it’s huge clearly now the big concern is why does no one know about this since appearance when I first heard about this when I first fulfilled Josh you know I have actually got lots of financial investments in great deals of companies I’m a major advocate for entrepreneurship in America and make lots of numerous financial investments in business owners of which lots of suffered through the pandemic when I first became aware of this I called BS I do not believe it since 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 and that were well been worthy of and we utilized them carefully to stay alive throughout the pandemic so when I heard about this I stated nah it can’t hold true but when I dug around I even contacted us to my political leader pals Guv Senators they didn’t know about it I mean that’s how you understand that’s how false information is that there’s no details out there then a bunch 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 nobody know about the worker retention credit you know what’s interesting you’re speaking about the banks Kevin due to the fact that in the PPP loan process the federal government made it extremely 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 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 because keep in mind in the initial cares act you could refrain from doing both programs so if you had 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 because it’s not alone so you’re getting a tax refund so the government never ever made it clear to anyone about how to.
do this does your CFO know how to do this not really she or he’s never ever done it in the past do the banks do it nope the banks do not do it the payroll business yeah some of them are doing it as a payroll company your accounting professional no your accountant’s never done this before unless you have an account that entered into this business and bottom line my firm Kevin has actually been in business given that 2009 and we’ve been dealing with the federal government and the state government to recuperate money for Fortune 500 Fortune 1000 companies so a lot of our big big corporate clients have worked with bottom line to recover other federal government programs we’ve done sales tax and utilize tax unemployment tax work chance tax credits research and development tax credits unclaimed home property tax all of these other federal government programs.
The worker retention tax credit is a broad based refundable tax credit created to motivate.
employers to keep workers on their payroll. The credit is 50% of up to $10,000 in incomes paid by an.
company whose organization is completely or partially suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is available to all companies despite size consisting of tax exempt organizations. There are.
just 2 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 computed each.
calendar quarter– Either.
o the company’s organization is totally 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. When the.
employer’s gross receipts go above 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 qualifying earnings paid up to $10,000 in overall.
It is effective for salaries paid after March 13th and before December 31, 2020.
The meaning of certifying salaries differs by whether an employer had, typically, basically than.
100 employees in 2019.
Business that specialize in ERC filing assistance generally offer competence and support to assist organizations browse the intricate procedure of declaring the credit. They can offer numerous services, including:.
How is the employee retention credit calculated? What Is The Refundable Portion Of Employee Retention Credit
Eligibility Assessment: These companies will evaluate your company’s eligibility for the ERC based on aspects such as your industry, profits, 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 Calculation: ERC filing services will assist in gathering the essential documents, such as payroll records and monetary declarations, to support your claim. They will likewise assist determine the credit quantity based on qualified salaries and other certifying expenditures.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for previous quarters, these business can examine your previous payroll records and financials to identify prospective opportunities for retroactive credits. They can assist you amend prior tax returns to declare these refunds.
Filing Help: Business specializing in ERC filings will prepare and submit the essential types and documents in your place. This includes completing Type 941 or any other necessary tax return.
Compliance and Updates: ERC policies and assistance have actually evolved gradually. These business remain updated with the current changes and make sure that your filings comply with the most current standards. If the IRS requests additional info or conducts an audit associated to your ERC claim, they can also offer continuous support.
It’s important to research and vet any business providing ERC filing assistance to ensure their credibility and competence. Try to find established firms with experience in tax and payroll services, or think about connecting to trusted accounting companies or tax specialists who use ERC submitting support.
Keep in mind that while these companies can supply important assistance, it’s always a great idea to have a basic understanding of the ERC requirements and procedure yourself. This will assist you make notified decisions and ensure accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief procedures. The goal of the ERC is to encourage companies to keep 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 available to eligible companies, consisting of for-profit organizations, tax-exempt companies, and certain governmental entities. To qualify, employers must fulfill one of two requirements:.
Business operations were totally or partly suspended due to a federal government order related to COVID-19.
The business experienced a substantial decline in gross invoices. As pointed out earlier, for 2021, a considerable decrease is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decline in gross invoices compared to the very same quarter in 2019, or a 20% decrease in gross invoices compared to the immediately preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount amounts to a percentage (approximately 70%) of qualified incomes paid to workers, including certain 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, organizations that got a Paycheck Protection Program (PPP) loan were not eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 permits organizations to declare the ERC even if they received a PPP loan. Nevertheless, the very same incomes can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and boosted, allowing qualified employers to declare the credit for certified incomes paid as far back as March 13, 2020. This retroactive arrangement provides a chance for organizations to change prior-year tax returns and get refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their employment income tax return, usually Type 941. The excess can be refunded to the company if the credit exceeds the amount of work taxes owed.
It is very important to keep in mind that the ERC arrangements and eligibility criteria have progressed over time. The very best strategy is to seek advice from a tax professional or check out the official IRS site for the most comprehensive and current information relating to the ERC, consisting of any current legislative modifications or updates.
To get approved for the ERC, a company must satisfy among the following criteria:.
Business operations were fully or partly suspended due to a federal government order related to COVID-19.
Business experienced a substantial decrease in gross receipts. For 2021, a considerable decrease is specified as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decline in gross invoices compared to the very same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
The ERC is offered to businesses of all sizes, consisting of tax-exempt organizations, but there are some exceptions. For instance, federal government entities and services that got a PPP loan might have limitations on declaring the credit.
The procedure for claiming the ERC involves finishing the essential kinds and consisting of the credit on your work tax return (generally Form 941). The exact time it requires to process the credit can differ based on numerous elements, consisting of the complexity of your business and the work of the internal revenue service. It’s advised to talk to 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. These consist of accounting companies, tax advisory services, and payroll provider. Some widely known business that use support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research study and call these companies straight to inquire about their charges and services.
Please keep in mind that the info offered here is based on general knowledge and might not reflect the most current updates or modifications to the ERC. It’s important to consult with a tax expert or check out the official internal revenue service website for the most updated and precise details concerning eligibility, claiming procedures, and readily available assistance.
Less than 100. If the employer had 100 or fewer employees usually in 2019, then the credit is based.
on salaries paid to all employees whether they in fact worked or not. Simply put, even if the.
workers worked full-time and earned money for full time work, the company still gets the credit.
Greater than 100. The credit is if the employer had more than 100 workers on average in 2019.
allowed just for salaries paid to workers who did not work during the calendar quarter.
In both cases, “wages” consists of not simply cash payments however also a part of the cost of company.
provided healthcare. What Is The Refundable Portion Of Employee Retention Credit
Employers can be immediately compensated for the credit by decreasing the amount of payroll taxes they.