Lets talk first about Who Gets Employee Retention Credit :
Our team here what do these men doing everyone in this room is helping teach people about ERC and uh always supply a gorgeous breakfast and have individuals actually discover the program we ought to head to the room where we have the ability to show some of the checks that we are getting for companies and I want to see that what is this this is uh hundreds of millions of dollars actually Kevin numerous countless dollars so these are duplicate copies of the letters that go to customers verifying that the check is on the way I mean you know if you simply start to 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 imply it’s just I suggest consider how many actual customers that went through the program yeah this is the very end this is the party at the end when the check is confirmed 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’re able to track it you understand when you
get this you understand the check is gone for sure which’s when they pay so they do not pay anything until they really get the cash they don’t pay bottom line Wonder trust anything until this letter is verified the check is on the method they deposit it into their checking account and they can really trust Wonder trust that the process has been finished and how many you think you have actually processed because you started this we’re about 35 000 of these for
about six billion dollars wow so clearly they understand what they’re doing which’s what you require you require 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 Terrific here you’re at my YouTube channel we’re talking about something actually important today the staff member retention credit which the majority of you have never ever become aware of I definitely had not heard of it until extremely just recently and found out a lot about it due to the fact that this is most likely the most affordable cost of capital for any small company anywhere
anytime if you have workers in between five and five hundred so I have actually got the professional 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 challenging this isn’t like PPP we just phone 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 tell 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 love this program it’s disappearing soon you got to discover everything about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply start there so throughout the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act used businesses 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everyone 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.
correct the cash money payroll tax refund alright go on sorry I simply have to ensure we got that point I mean that’s a big difference a loan versus cash money I like money cash 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 original cares Act is the ERC and yes Kevin it is a gorgeous tough check in the mail where you get actual cash from the IRS all right so let’s discuss how it works due to the fact that it seems like to me if it’s a if it’s worker retention credit that individual 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 shareholders 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. so as long as you had W-2 workers and you paid federal payroll taxes that’s why you would be eligible so you need to be on payroll in 2020 on the W-2 and you need to be on payroll for the first six months of 2021 on the W-2 proper so there were six quarters the program was open well stroll us through the 6 quarters so you had quarters 2 3 and 4 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 duration now let’s talk my preferred part money how much can you get back per staff member that was on a W-2 in those six quarters so the computation in 2020 to be specific Kevin is 50 of the worker’s salary to an optimum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers escalated to 70 of the worker’s wage to an optimum of seven thousand per quarter how did that happen um they simply changed the rules in.
2021 versus since the chaos of the pandemic so they wished 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 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 staff member that is because that’s a great deal 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 decrease the 26 000 so what we’re seeing on average Kevin is if you took PPP cash somewhere around 10 thousand dollars a person so let’s state hypothetically you owned a dining establishment in New York 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 big obviously now the huge question is why does nobody know about this because appearance when I initially found out about this when I first satisfied Josh you understand I have actually got lots of financial investments in great deals of companies I’m a significant supporter for entrepreneurship in America and make many many investments in entrepreneurs of which lots of suffered through the pandemic when I initially found out about this I called BS I don’t think it since 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 which were well should have and we utilized them carefully to stay alive throughout the pandemic so when I heard about this I said nah it can’t be true but when I dug around I even contacted us to my political leader pals Guv Senators they didn’t learn about it I indicate that’s how you know that’s how false information is that there’s no information out there then a bunch of individuals informed me well you can’t get it since you took the PPP also not true so let’s ask Josh why does no one learn about the worker retention credit you know what’s interesting you’re speaking about the banks Kevin since in the PPP loan process the federal government made it very clear that if you desired 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 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 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 since it’s not alone so you’re getting a tax refund so the government never 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 done it before 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 business 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 actually stayed in business since 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 huge huge corporate customers have actually worked 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 property real estate tax all of these other government programs.
The worker retention tax credit is a broad based refundable tax credit developed to encourage.
employers to keep workers on their payroll. The credit is 50% of up to $10,000 in salaries paid by an.
Since of COVID-19 or whose gross receipts, company whose service is totally or partially suspended.
decline by more than 50%.
Schedule.
1. The credit is readily available to all companies despite size consisting of tax exempt companies. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) little.
businesses who take Small Business Loans.
2. To certify, the company needs to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s service is totally or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross invoices are below 50% of the comparable quarter in 2019. When the.
employer’s gross invoices go above 80% of a similar quarter in 2019 they no longer qualify.
after the end of that quarter.
Computation of the Credit.
The quantity of the credit is 50% of the qualifying wages paid up to $10,000 in overall.
It is effective for wages paid after March 13th and before December 31, 2020.
The definition of qualifying salaries varies by whether a company had, typically, basically than.
100 staff members in 2019.
Companies that specialize in ERC filing support generally provide know-how and support to help businesses browse the complex process of claiming the credit. They can provide various services, consisting of:.
How is the employee retention credit calculated? Who Gets Employee Retention Credit
Eligibility Assessment: These business will assess your company’s eligibility for the ERC based upon factors such as your industry, earnings, and operations. If you meet the requirements for the credit and recognize the optimum credit quantity you can claim, they can assist identify.
Documentation and Computation: ERC filing services will help in collecting the essential documentation, such as payroll records and financial statements, to support your claim. They will likewise assist compute the credit quantity based upon eligible salaries and other certifying costs.
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 identify prospective chances for retroactive credits. They can help you change prior income tax return to claim these refunds.
Filing Help: Companies focusing on ERC filings will prepare and send the required types and paperwork on your behalf. This includes completing Type 941 or any other required tax forms.
Compliance and Updates: ERC policies and guidance have actually progressed in time. These companies stay upgraded with the most recent modifications and ensure that your filings abide by the most current guidelines. They can likewise supply continuous assistance if the internal revenue service demands additional information or conducts an audit related to your ERC claim.
It’s important to research study and vet any business using ERC filing assistance to ensure their trustworthiness and proficiency. Search for recognized firms with experience in tax and payroll services, or consider reaching out to relied on accounting companies or tax experts who provide ERC submitting assistance.
Keep in mind that while these companies can offer important assistance, it’s constantly a good idea to have a basic understanding of the ERC requirements and procedure yourself. This will assist you make notified choices and guarantee 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 motivate companies to maintain and pay their employees during the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to eligible employers, consisting of for-profit organizations, tax-exempt organizations, and certain governmental entities. To qualify, companies should fulfill one of two criteria:.
Business operations were completely or partially suspended due to a federal government order related to COVID-19.
Business experienced a substantial decrease in gross receipts. As pointed out previously, for 2021, a substantial decrease 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 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 employer’s share of Social Security taxes. The credit quantity is equal to a percentage (as much as 70%) of certified earnings paid to workers, including certain health insurance expenses. The optimum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, services that received an Income Defense Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 allows services to declare the ERC even if they received a PPP loan. The very same earnings can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively expanded and boosted, permitting qualified companies to declare the credit for certified earnings paid as far back as March 13, 2020. This retroactive provision provides a chance for businesses to change prior-year tax returns and get refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their work income tax return, usually Type 941. If the credit goes beyond the amount of work taxes owed, the excess can be reimbursed to the company.
It is essential to note that the ERC provisions and eligibility criteria have actually progressed in time. The very best strategy is to talk to a tax expert or go to the official internal revenue service website for the most comprehensive and updated info relating to the ERC, including any recent legal changes or updates.
To qualify for the ERC, a company should fulfill one of the following requirements:.
The business operations were completely or partly suspended due to a government order related to COVID-19.
The business experienced a substantial decrease in gross invoices. For 2021, a substantial decline is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decline is defined 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 instantly preceding quarter.
The ERC is offered to companies of all sizes, including tax-exempt companies, however there are some exceptions. For instance, federal government entities and organizations that got a PPP loan may have limitations on declaring the credit.
The procedure for claiming the ERC includes finishing the needed kinds and including the credit on your work income tax return (generally Kind 941). The exact time it requires to process the credit can differ based upon several elements, consisting of the intricacy of your company and the workload of the IRS. It’s advised to seek advice from a tax expert for assistance specific to your scenario.
There are numerous companies that can help with the procedure of declaring the ERC. Some widely known business that provide support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the information provided here is based on general understanding and may not show the most recent updates or changes to the ERC. It is essential to talk to a tax expert or go to the main IRS website for the most current and accurate information concerning eligibility, claiming treatments, and available assistance.
Less than 100. If the company had 100 or less staff members typically in 2019, then the credit is based.
on wages paid to all staff members whether they actually 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. If the company had more than 100 employees usually in 2019, then the credit is.
allowed just for incomes paid to employees who did not work throughout the calendar quarter.
In both cases, “wages” includes not just cash payments however also a portion of the expense of employer.
provided healthcare. Who Gets Employee Retention Credit
Payment.
Companies can be immediately reimbursed for the credit by minimizing the amount of payroll taxes they.