Lets talk first about Which Employees Are Eligible For Employee Retention Credit :
Our team here what do these men doing everyone in this room is helping teach individuals about ERC and uh always supply a beautiful breakfast and have individuals actually discover the program we must head to the room where we are able 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 countless dollars literally Kevin hundreds of millions of dollars so these are duplicate copies of the letters that go to clients confirming that the check is on the method I mean you know if you simply begin to take a 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 mean it’s simply I indicate think of the number of real 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 verified and the check is on the mail in the mail from the IRS heading to the customer 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 do not pay anything till they really get the cash 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 savings account and they can genuinely rely on Wonder trust that the procedure has been completed and the number of you think you’ve processed because you started 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 need 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 Terrific here you’re at my YouTube channel we’re discussing something really crucial today the staff member retention credit which the majority of you have actually never heard of I certainly had not become aware of it until very just recently and discovered a lot about it due to the fact that this is probably the most affordable expense of capital for any small business anywhere
anytime if you have staff members between five and five hundred so I have actually got the expert with me this is Josh Fox he’s the founder 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 your bank manager and say offer 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’ve ended up being yes the Ambassador and paid representative for this I like this program it’s going away very soon you got to learn everything about it let’s talk worker 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 provided companies three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody it makes a huge difference right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
fix the money cash payroll tax refund all right go on sorry I simply have to make certain we got that point I suggest that’s a big difference a loan versus cash cash I like cash money that’s what we’re discussing 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 gorgeous tough check in the mail where you get actual money 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 employee retention credit that individual needed 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 investors it’s for staff members right you needed to have owned an organization however it’s based on you having W-2 staff members 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 eligible so you have to be on payroll in 2020 on the W-2 and you have to be on payroll for the first six months of 2021 on the W-2 appropriate so there were 6 quarters the program was open well walk us through the six quarters so you had quarters 2 three and four of 2020 and you had quarters one two and 3 of 2021. all right so that’s how it’s determined you need to be on the W-2 during that period now let’s talk my preferred part money just how much can you get back per employee that was on a W-2 in those six quarters so the estimation in 2020 to be specific Kevin is 50 of the staff member’s wage to a maximum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers escalated to 70 of the worker’s income to an optimum of seven thousand per quarter how did that occur 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 workers on payroll 100 so if you can get 5 000 per person Max in twenty that was 50 in 2020 approximately 5 thousand Max and after that what occurs 21 000 Max in 2021 oh that’s how you come up with twenty six thousand twenty one thousand to twenty twenty one plus 5 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 caveat here the PPP money would need to be minimized from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would decrease the 26 000 so what we’re seeing usually Kevin is if you took PPP cash somewhere around ten 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 staff members and you took PPP money you would still get a million dollar in the mail from the internal revenue service so it’s huge certainly now the big concern is why does no one learn about this due to the fact that look when I first became aware of this when I initially fulfilled Josh you understand I have actually got great deals of investments in great deals of companies I’m a major supporter for entrepreneurship in America and make lots of lots of financial investments in business owners of which numerous suffered through the pandemic when I initially became aware of this I called BS I don’t think it because I utilize 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 utilized them sensibly to survive during the pandemic so when I became aware of this I stated nah it can’t be true however when I dug around I even contacted us to my politician friends Guv Senators they didn’t understand about it I indicate that’s how you know that’s how misinformation is that there’s no info out there then a lot of people told 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 learn about the staff member retention credit you know what’s interesting you’re speaking about the banks Kevin because in the PPP loan procedure 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 nation and they would process process in Canada a pre-pp loan there’s no loans in Canada by the way it’s just process process that’s all um and here there was mayhem since remember in the original cares act you might not do both programs so if you had actually done PPP you could not do ERC in the original program and when they altered the law in 2021 the banks were not doing ERC because it’s not alone so you’re getting a tax refund so the federal government never ever made it clear to anybody about how to.
do this does your CFO understand how to do this not truly he or she’s never ever done it before do the banks do it nope the banks do not do it the payroll companies yeah some of them are doing it as a payroll company your accounting professional 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 stayed in business since 2009 and we have actually been working with the federal government and the state federal government to recuperate money for Fortune 500 Fortune 1000 business so a great deal of our big big corporate customers have worked with bottom line to recover 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 federal government programs.
The worker retention tax credit is a broad based refundable tax credit created to encourage.
companies to keep employees on their payroll. The credit is 50% of up to $10,000 in wages paid by an.
employer whose company is completely or partly suspended because of COVID-19 or whose gross invoices.
decrease by more than 50%.
Availability.
1. The credit is offered to all companies despite size consisting of tax exempt organizations. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
companies who take Small Business Loans.
2. To qualify, the company needs to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s business is totally or partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the similar quarter in 2019. As soon as the.
company’s gross invoices go above 80% of a similar quarter in 2019 they no longer qualify.
after the end of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the certifying wages 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 certifying salaries varies by whether an employer had, on average, more or less than.
100 staff members in 2019.
Companies that specialize in ERC filing support typically supply expertise and assistance to help companies navigate the complex process of declaring the credit. They can use numerous services, consisting of:.
How is the employee retention credit calculated? Which Employees Are Eligible For Employee Retention Credit
Eligibility Assessment: These companies will examine your company’s eligibility for the ERC based upon aspects such as your market, earnings, and operations. They can help identify if you meet the requirements for the credit and determine the maximum credit amount you can claim.
Paperwork and Computation: ERC filing services will help in gathering the essential paperwork, such as payroll records and financial statements, to support your claim. They will also assist calculate the credit amount based upon qualified salaries and other qualifying expenditures.
Retroactive Claim Review: If you are qualified to declare the ERC for previous quarters, these business can examine your past payroll records and financials to recognize prospective chances for retroactive credits. They can help you modify previous income tax return to claim these refunds.
Filing Help: Companies specializing in ERC filings will prepare and submit the essential forms and paperwork in your place. This includes completing Type 941 or any other required tax return.
Compliance and Updates: ERC policies and assistance have actually progressed with time. These companies remain upgraded with the current changes and guarantee that your filings adhere to the most current guidelines. They can likewise provide continuous support if the IRS demands extra details or conducts an audit related to your ERC claim.
It’s important to research study and vet any business using ERC filing support to ensure their credibility and knowledge. Look for established companies with experience in tax and payroll services, or think about reaching out to trusted accounting firms or tax professionals who offer ERC submitting support.
Bear in mind that while these companies can supply valuable support, it’s always a good concept to have a fundamental understanding of the ERC requirements and process yourself. This will help you make informed choices and make sure accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief measures. The objective of the ERC is to motivate companies to retain and pay their staff members throughout the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to qualified companies, consisting of for-profit companies, tax-exempt organizations, and certain governmental entities. To qualify, companies should satisfy one of two criteria:.
The business operations were fully or partly suspended due to a government order related to COVID-19.
Business experienced a significant decline in gross invoices. As discussed earlier, for 2021, a substantial decrease is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decrease is specified as a 20% decline in gross invoices compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the instantly preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity amounts to a portion (approximately 70%) of qualified earnings paid to employees, consisting of certain health insurance 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: Initially, services that received an Income Protection Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 permits services to claim the ERC even if they received a PPP loan. The same incomes can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and improved, enabling eligible employers to claim the credit for certified salaries paid as far back as March 13, 2020. This retroactive provision supplies an opportunity for companies to amend prior-year tax returns and get refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their employment tax returns, normally Form 941. If the credit surpasses the quantity of work taxes owed, the excess can be reimbursed to the company.
It is very important to note that the ERC arrangements and eligibility requirements have actually developed in time. The very best course of action is to speak with a tax professional or visit the official IRS site for the most updated and in-depth details relating to the ERC, including any current legislative modifications or updates.
To qualify for the ERC, an organization needs to fulfill among the following requirements:.
Business operations were fully or partly suspended due to a government order related to COVID-19.
Business experienced a considerable decline in gross invoices. For 2021, a considerable decline is defined 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 exact same quarter in 2019, or a 20% decline in gross invoices compared to the right away preceding quarter.
The ERC is readily available to organizations of all sizes, including tax-exempt organizations, however there are some exceptions. Federal government entities and organizations that received a PPP loan may have limitations on declaring the credit.
The procedure for claiming the ERC includes finishing the required forms and including the credit on your employment income tax return (generally Kind 941). The exact time it requires to process the credit can differ based on a number of elements, including the intricacy of your organization and the workload of the IRS. It’s recommended to speak with a tax professional for assistance specific to your scenario.
There are several companies that can assist with the procedure of declaring the ERC. Some well-known companies that provide help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the information supplied here is based upon general understanding and might not show the most current updates or changes to the ERC. It is very important to talk to a tax professional or go to the main internal revenue service site for the most precise and current details concerning eligibility, declaring procedures, and offered support.
Less than 100. The credit is based if the employer had 100 or fewer workers on average in 2019.
on earnings paid to all employees whether they really 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. The credit is if the employer had more than 100 staff members on average in 2019.
permitted just for earnings paid to workers who did not work during the calendar quarter.
In both cases, “earnings” includes not simply money payments but likewise a part of the expense of company.
supplied health care. Which Employees Are Eligible For Employee Retention Credit
Payment.
Companies can be instantly compensated for the credit by lowering the amount of payroll taxes they.