Lets talk first about Who Gets The Employee Retention Credit :
Our group here what do these people doing everybody in this room is assisting teach individuals about ERC and uh constantly provide a gorgeous breakfast and have people truly find out about the program we need to head to the room where we are able 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 hundreds of millions of dollars actually Kevin numerous millions of dollars so these are replicate copies of the letters that go to customers validating that the check is on the way I imply you understand if you just 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 suggest it’s simply 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 verified 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 understand when you
receive this you know the check is chosen sure which’s when they pay so they don’t pay anything until they actually get the money they don’t pay bottom line Wonder trust anything up until this letter is confirmed the check is on the way they deposit it into their savings account and they can really rely on Wonder trust that the process has actually been finished and how many you think you’ve processed because you started this we have to do with 35 000 of these for
about six 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 one of these that’s what matters all right Mr Fantastic here you’re at my YouTube channel we’re discussing something really essential today the staff member retention credit which most of you have actually never ever become aware of I certainly hadn’t become aware of it till really just recently and learned 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 staff members in between 5 and five hundred so I’ve got the expert with me this is Josh Fox he’s the creator and CEO of bottom line Concepts they’re the largest processor of these ERC credits this is a 170 page program so it’s not easy this isn’t like PPP we just phone your bank supervisor and say provide 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 become yes the Ambassador and paid representative for this I enjoy this program it’s going away soon you got to find out everything about it let’s talk worker retention credit Josh Fox what is an ERC let’s simply begin there so throughout the Trump Administration when President Trump was enacted they developed the cares Act and the cares act used organizations 3 opportunities 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 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the money cash payroll tax refund alright go on sorry I simply have to ensure we got that point I mean that’s a big distinction a loan versus money cash I like money cash that’s what we’re discussing 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 initial cares Act is the ERC and yes Kevin it is a stunning 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 worker retention credit that person had to be a staff member so I’m going to make the Presumption this money is not for the owner not for individuals on the cap table not for investors it’s for employees right you needed to have owned an organization but 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 qualified so you need 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 correct so there were six 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 2 and 3 of 2021. fine so that’s how it’s measured you need to be on the W-2 during that period now let’s talk my favorite part money just how much can you get back per employee that was on a W-2 in those 6 quarters so the calculation in 2020 to be specific Kevin is 50 of the worker’s income to a maximum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s income to a maximum of seven thousand per quarter how did that take place um they simply altered the rules in.
2021 versus due to the fact that the mayhem of the pandemic so they wanted to even get more to keep those employees on payroll 100 so if you can get 5 000 per person Max in twenty that was 50 in 2020 as much as 5 thousand Max and then what happens 21 000 Max in 2021 oh that’s how you come up with twenty 6 thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty 6 thousand dollars per employee that is since that’s a great deal of money it is now there’s a caution here the PPP cash would have to be lowered from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would decrease the 26 000 so what we’re seeing usually Kevin is if you took PPP cash somewhere around ten thousand dollars an individual so let’s state hypothetically you owned a dining establishment in New york city City where I’m from and you had a hundred workers and you took PPP money you would still get a million dollar in the mail from the internal revenue service so it’s substantial undoubtedly now the big question is why does no one know about this since look when I first became aware of this when I initially satisfied Josh you understand I have actually got great deals of financial investments in lots of companies I’m a major advocate for entrepreneurship in America and make lots of numerous investments in business owners of which lots of suffered through the pandemic when I first found out about this I called BS I don’t think it because I use the PPP we went through the money center Banks to get it it was extremely easy to do we had our CEOs call the banks they got their loans which were well deserved and we utilized them carefully to stay alive throughout the pandemic so when I heard about this I stated nah it can’t be true however when I dug around I even contacted us to my political leader pals Governor Senators they didn’t learn about it I suggest that’s how you understand 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 because you took the PPP likewise not true so let’s ask Josh why does no one know about the employee retention credit you know what’s fascinating you’re discussing the banks Kevin due to the fact that in the PPP loan process the federal government made it extremely clear that if you desired 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 simply process process that’s all um and here there was turmoil due to the fact that keep in mind in the initial cares act you could not do both programs so if you had done PPP you could refrain from doing ERC in the initial program and when they altered the law in 2021 the banks were refraining from doing ERC since 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 know how to do this not truly 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 companies yeah some of them are doing it as a payroll company your accountant no your accounting professional’s never done this before unless you have an account that entered into this service and bottom line my firm Kevin has actually been in business because 2009 and we’ve been working with the federal government and the state federal government to recover cash for Fortune 500 Fortune 1000 companies so a great deal of our big huge business clients have 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 property 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.
employers to keep staff members on their payroll. The credit is 50% of as much as $10,000 in earnings paid by an.
Due to the fact that of COVID-19 or whose gross invoices, employer whose organization is totally or partially suspended.
decline by more than 50%.
1. The credit is 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.
services who take Small Business Loans.
2. To certify, the company needs to satisfy one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s service is totally or partially suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross receipts are below 50% of the comparable quarter in 2019. Once the.
company’s gross receipts go above 80% of a comparable 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 qualifying wages paid up to $10,000 in overall.
It works for wages paid after March 13th and prior to December 31, 2020.
The definition of certifying earnings varies by whether an employer had, typically, more or less than.
100 employees in 2019.
Business that concentrate on ERC filing help normally offer knowledge and assistance to assist companies navigate the intricate procedure of claiming the credit. They can provide different services, including:.
How is the employee retention credit calculated? Who Gets The Employee Retention Credit
Eligibility Evaluation: These companies will examine your company’s eligibility for the ERC based on factors such as your industry, earnings, and operations. If you meet the requirements for the credit and recognize the maximum credit quantity you can declare, they can assist figure out.
Documentation and Calculation: ERC filing services will assist in collecting the necessary documents, such as payroll records and monetary declarations, to support your claim. They will likewise help calculate the credit amount based upon eligible earnings and other qualifying expenditures.
Retroactive Claim Review: If you are eligible to declare the ERC for previous quarters, these companies can evaluate your past payroll records and financials to determine prospective chances for retroactive credits. They can help you change previous tax returns to claim these refunds.
Filing Help: Business focusing on ERC filings will prepare and send the essential forms and paperwork in your place. This consists of completing Type 941 or any other necessary tax forms.
Compliance and Updates: ERC guidelines and assistance have developed gradually. These business remain updated with the current changes and guarantee that your filings comply with the most current standards. They can also offer ongoing assistance if the IRS requests extra information or performs an audit related to your ERC claim.
It’s important to research and veterinarian any business offering ERC filing assistance to ensure their trustworthiness and know-how. Search for established companies with experience in tax and payroll services, or think about connecting to trusted accounting firms or tax professionals who use ERC submitting assistance.
Keep in mind that while these business can provide valuable support, it’s constantly an excellent concept to have a fundamental understanding of the ERC requirements and procedure yourself. This will assist you make notified decisions and ensure accurate filings.
The Worker Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief steps. The objective of the ERC is to motivate services to keep and pay their employees throughout 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 employers, including for-profit companies, tax-exempt organizations, and particular governmental entities. To qualify, employers must meet one of two requirements:.
The business operations were totally or partly suspended due to a federal government order related to COVID-19.
Business experienced a considerable decline in gross invoices. As pointed out earlier, for 2021, a substantial decrease is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decline is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
Credit Amount: 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 (as much as 70%) of qualified earnings paid to employees, including specific health insurance costs. The maximum credit per staff member is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, companies that received an Income Security 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. Nevertheless, the very same salaries can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and improved, allowing eligible employers to claim the credit for certified salaries paid as far back as March 13, 2020. This retroactive provision offers an opportunity for businesses to amend prior-year income tax return and receive refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their employment tax returns, typically Type 941. If the credit surpasses the quantity of employment taxes owed, the excess can be refunded to the employer.
It’s important to note that the ERC provisions and eligibility criteria have actually developed with time. The very best strategy is to talk to a tax professional or check out the official IRS site for the most comprehensive and up-to-date info regarding the ERC, consisting of any recent legislative changes or updates.
To get approved for the ERC, a business should meet one of the following criteria:.
The business operations were totally or partly suspended due to a government order related to COVID-19.
Business experienced a considerable decrease in gross receipts. For 2021, a significant decrease is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the immediately preceding quarter.
The ERC is readily available to organizations of all sizes, consisting of tax-exempt companies, but there are some exceptions. Government entities and organizations that received a PPP loan might have restrictions on claiming the credit.
The process for claiming the ERC involves completing the needed kinds and consisting of the credit on your work tax return (typically Type 941). The exact time it takes to process the credit can vary based upon a number of aspects, including the complexity of your service and the work of the IRS. It’s advised to consult with a tax expert for guidance particular to your scenario.
There are several companies that can aid with the process of claiming the ERC. These include accounting companies, tax advisory services, and payroll service providers. Some well-known business that offer support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research and call these business straight to ask about their services and fees.
Please note that the details provided here is based upon basic knowledge and may not show the most recent updates or changes to the ERC. It is necessary to consult with a tax expert or check out the official IRS website for the most precise and current information relating to eligibility, declaring treatments, and readily available assistance.
Less than 100. If the employer had 100 or fewer staff members on average in 2019, then the credit is based.
on wages paid to all workers whether they actually worked or not. In other words, even if the.
employees worked full time and earned money for full-time work, the employer still gets the credit.
Greater than 100. If the employer had more than 100 workers usually in 2019, then the credit is.
enabled only for earnings paid to staff members who did not work throughout the calendar quarter.
In both cases, “wages” consists of not just money payments but also a part of the cost of employer.
supplied health care. Who Gets The Employee Retention Credit
Employers can be instantly repaid for the credit by minimizing the quantity of payroll taxes they.