Lets talk first about Whats An Employee Retention Credit :
Our team here what do these guys doing everyone in this space is helping teach people about ERC and uh always provide a beautiful breakfast and have people really 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 wish to see that what is this this is uh numerous countless dollars actually Kevin hundreds of countless dollars so these are replicate copies of the letters that go to customers confirming that the check is on the method I imply you know if you just begin to take a look at a few 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 mean think about the number of actual 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 confirmed and the check is on the mail in the mail from the IRS heading to the consumer so that’s how you have the ability to track it you know when you
get 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 till this letter is verified 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 ended up and how many you think you have actually processed since you began this we’re about 35 000 of these for
about 6 billion dollars wow so plainly they understand what they’re doing which’s what you require you require professionals 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 really important today the employee retention credit which the majority of you have never ever heard of I definitely had not heard of it up until really 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 staff members in between five 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 challenging this isn’t like PPP we simply phone your bank manager and state offer me a loan it does not work there’s not a loan it’s an application and Josh is going to tell us all about it and how to get it and why I have actually ended up being yes the Ambassador and paid representative for this I enjoy this program it’s disappearing very soon you got to find out all about it let’s talk employee retention credit Josh Fox what is an ERC let’s just start there so throughout the Trump Administration when President Trump was enacted they developed the cares Act and the cares act provided companies 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everybody 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.
correct the cash cash payroll tax refund all right go on sorry I simply need to make sure we got that point I indicate that’s a huge distinction a loan versus cash money I like money cash that’s what we’re talking about fine 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 lovely tough check in the mail where you get real money from the internal revenue service all right so let’s talk about how it works because it sounds like to me if it’s a if it’s staff member retention credit that individual had to be an employee so I’m going to make the Presumption this cash is not for the owner not for people on the cap table not for investors it’s for workers right you needed to have owned a company however it’s based on you having W-2 staff members in America not 10.99. so as long as you had W-2 employees 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 need to be on payroll for the very first six months of 2021 on the W-2 right so there were 6 quarters the program was open well walk us through the six quarters so you had quarters two 3 and 4 of 2020 and you had quarters one two and three of 2021. all right so that’s how it’s determined you have to be on the W-2 throughout that period now let’s talk my favorite part money just how much can you return per worker that was on a W-2 in those 6 quarters so the calculation in 2020 to be specific Kevin is 50 of the staff member’s income to an optimum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers escalated to 70 of the staff member’s salary to an optimum of seven thousand per quarter how did that take place um they just changed 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 five thousand Max and then what takes place 21 000 Max in 2021 oh that’s how you develop 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 because that’s a great deal of money it is now there’s a caution here the PPP cash would need to be reduced from the twenty 6 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 money someplace around ten thousand dollars an individual so let’s say hypothetically you owned a restaurant 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 big undoubtedly now the big concern is why does no one learn about this because look when I initially became aware of this when I first fulfilled Josh you understand I have actually got lots of investments in great deals of companies I’m a significant supporter for entrepreneurship in America and make numerous many investments in entrepreneurs of which lots of suffered through the pandemic when I initially became aware of this I called BS I do not think it because I use the PPP we went through the cash 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 deserved and we used 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 contacted us to my politician good friends Governor Senators they didn’t know about it I imply that’s how you know that’s how misinformation is that there’s no info out there then a lot 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 no one understand about the staff member retention credit you know what’s intriguing you’re discussing the banks Kevin since 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 huge 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 simply procedure procedure 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 might refrain from doing ERC in the initial program and when they altered the law in 2021 the banks were not doing ERC due to the fact that it’s not alone so you’re getting a tax refund so the government never ever made it clear to anybody about how to.
do this does your CFO understand how to do this not actually she or he’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 company your accounting professional no your accounting professional’s never ever done this prior to unless you have an account that went into this service and bottom line my firm Kevin has actually been in business considering that 2009 and we’ve been dealing with the federal government and the state 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 have actually done sales tax and utilize tax unemployment tax work chance tax credits research and development tax credits unclaimed home real estate tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit developed to motivate.
companies to keep workers on their payroll. The credit is 50% of approximately $10,000 in salaries paid by an.
employer whose service is fully or partially suspended because of COVID-19 or whose gross invoices.
decrease by more than 50%.
1. The credit is readily available to all employers no matter size consisting of tax exempt companies. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
companies who take Small Business Loans.
2. To qualify, the company has to satisfy one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s organization is totally or partially suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross invoices are below 50% of the equivalent quarter in 2019. Once the.
employer’s gross invoices exceed 80% of an equivalent quarter in 2019 they no longer qualify.
after completion of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the certifying wages paid up to $10,000 in overall.
It works for earnings paid after March 13th and before December 31, 2020.
The meaning of certifying wages differs by whether an employer had, typically, basically than.
100 workers in 2019.
Companies that concentrate on ERC filing support generally provide expertise and support to assist companies browse the complex process of declaring the credit. They can provide numerous services, including:.
How is the employee retention credit calculated? Whats An Employee Retention Credit
Eligibility Evaluation: These companies will assess your service’s eligibility for the ERC based on factors such as your market, earnings, and operations. They can help determine if you meet the requirements for the credit and recognize the optimum credit quantity you can declare.
Paperwork and Computation: ERC filing services will assist in collecting the needed documents, such as payroll records and financial statements, to support your claim. They will likewise assist determine the credit quantity based upon eligible incomes and other qualifying expenses.
Retroactive Claim Review: If you are eligible to claim the ERC for prior quarters, these companies can evaluate your past payroll records and financials to determine possible opportunities for retroactive credits. They can assist you change previous income tax return to claim these refunds.
Filing Assistance: Business specializing in ERC filings will prepare and send the needed kinds and documents on your behalf. This includes finishing Form 941 or any other necessary tax forms.
Compliance and Updates: ERC regulations and guidance have actually developed over time. These companies stay upgraded with the latest modifications and guarantee that your filings abide by the most present standards. If the Internal revenue service demands extra details or performs an audit associated to your ERC claim, they can likewise supply ongoing support.
It’s important to research and veterinarian any business offering ERC filing help to ensure their reliability and know-how. Search for established companies with experience in tax and payroll services, or think about reaching out to trusted accounting firms or tax specialists who use ERC filing support.
Remember that while these companies can provide valuable help, it’s constantly an excellent idea to have a standard understanding of the ERC requirements and process yourself. This will help you make informed choices 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 businesses to maintain and pay their employees during the pandemic, even if their operations have actually been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to eligible employers, consisting of for-profit businesses, tax-exempt companies, and certain governmental entities. To qualify, employers need to satisfy one of two criteria:.
The business operations were fully or partly suspended due to a government order related to COVID-19.
The business experienced a considerable decline in gross invoices. As discussed previously, for 2021, a significant decline is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decline in gross invoices compared to the same quarter in 2019, or a 20% decrease 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 portion (approximately 70%) of certified wages paid to employees, consisting of particular health insurance expenditures. 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 an Income Defense Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 enables organizations to declare the ERC even if they received a PPP loan. Nevertheless, the same incomes can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively expanded and enhanced, allowing eligible companies to claim the credit for certified earnings paid as far back as March 13, 2020. This retroactive provision supplies an opportunity for companies to change prior-year tax returns and get refunds.
Claiming the Credit: Companies can declare the ERC by reporting it on their employment income tax return, generally Kind 941. If the credit goes beyond the amount of work taxes owed, the excess can be refunded to the employer.
It’s important to keep in mind that the ERC arrangements and eligibility criteria have evolved in time. The best course of action is to speak with a tax professional or visit the official IRS website for the most detailed and current details relating to the ERC, consisting of any recent legislative changes or updates.
To get approved for the ERC, a company needs to fulfill among the following criteria:.
Business operations were totally or partly suspended due to a government order related to COVID-19.
Business experienced a considerable decrease in gross invoices. For 2021, a significant decline is specified as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a substantial decline is specified as a 20% decline in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross invoices compared to the immediately preceding quarter.
The ERC is readily available to companies of all sizes, consisting of tax-exempt organizations, but there are some exceptions. For instance, government entities and organizations that got a PPP loan might have constraints on claiming the credit.
The procedure for claiming the ERC involves completing the required kinds and consisting of the credit on your work tax return (typically Form 941). The exact time it takes to process the credit can vary based upon a number of elements, consisting of the intricacy of your organization and the workload of the IRS. It’s suggested to seek advice from a tax expert for guidance particular to your situation.
There are numerous business that can help with the procedure of claiming the ERC. Some popular companies that use support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the information provided here is based on general knowledge and might not reflect the most recent updates or changes to the ERC. It is essential to speak with a tax expert or check out the official IRS site for the most updated and accurate details concerning eligibility, claiming treatments, and offered help.
Less than 100. If the company had 100 or less workers typically in 2019, then the credit is based.
on salaries paid to all staff members whether they really worked or not. To put it simply, even if the.
workers worked full-time and earned money for full time work, the company still gets the credit.
Greater than 100. If the employer had more than 100 workers typically in 2019, then the credit is.
allowed only for earnings paid to staff members who did not work during the calendar quarter.
In both cases, “salaries” consists of not just money payments however also a portion of the cost of employer.
provided healthcare. Whats An Employee Retention Credit
Employers can be instantly compensated for the credit by reducing the amount of payroll taxes they.