Lets talk first about Who Is Eligible For The Employee Retention Credit :
Our team here what do these people doing everyone in this space is helping teach individuals about ERC and uh constantly offer a beautiful breakfast and have people really learn more about the program we should head to the room where we have the ability to display some of the checks that we are getting for companies and I want to see that what is this this is uh numerous millions of dollars literally Kevin hundreds of countless dollars so these are duplicate copies of the letters that go to clients validating that the check is on the method I suggest you know if you simply start to look at a few of these here I indicate this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I imply it’s just I indicate 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 confirmed the numbers are verified 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 understand when you
get this you know the check is gone for sure and that’s when they pay so they don’t pay anything till they in fact receive the cash they do not 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 truly rely on Wonder trust that the process has actually been completed and how many you believe you have actually processed because you started this we have to do with 35 000 of these for
about six billion dollars wow so clearly they know what they’re doing and that’s what you need you need experts 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 Fantastic 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 actually never ever heard of I certainly had not heard of it till very just recently and discovered a lot about it due to the fact that this is probably the lowest cost of capital for any small company anywhere
anytime if you have workers 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 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 just phone your bank supervisor and say give 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 become yes the Ambassador and paid spokesperson for this I enjoy this program it’s disappearing very soon you got to learn everything about it let’s talk employee retention credit Josh Fox what is an ERC let’s just begin there so during the Trump Administration when President Trump was enacted they created the cares Act and the cares act used businesses 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everyone it makes a huge difference right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the money cash payroll tax refund alright go on sorry I simply have to ensure we got that point I indicate that’s a huge difference a loan versus money money I like cash money 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 beautiful difficult check in the mail where you get real cash from the IRS all right so let’s talk about how it works because it seems like to me if it’s a if it’s staff member retention credit that person needed to be an employee so I’m going to make the Assumption this cash 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 a service 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 6 months of 2021 on the W-2 right so there were 6 quarters the program was open well stroll us through the six quarters so you had quarters two 3 and four of 2020 and you had quarters one two and 3 of 2021. okay so that’s how it’s measured you have to be on the W-2 during that duration now let’s talk my favorite part cash how much can you return per staff member that was on a W-2 in those six quarters so the calculation in 2020 to be specific Kevin is 50 of the staff member’s salary to a maximum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the employee’s salary to a maximum of 7 thousand per quarter how did that occur um they just changed the rules in.
2021 versus because the turmoil 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 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 five 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 cash would have to be reduced 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 usually Kevin is if you took PPP cash someplace around 10 thousand dollars an individual so let’s state hypothetically you owned a dining establishment in New York 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 IRS so it’s big certainly now the huge question is why does no one know about this because look when I first heard about this when I first met Josh you understand I have actually got great deals of investments in lots of business I’m a major supporter for entrepreneurship in America and make lots of many investments in business owners of which numerous suffered through the pandemic when I initially found out about this I called BS I don’t believe it due to the fact that I utilize 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 should have and we used them carefully to stay alive throughout the pandemic so when I found out about this I stated nah it can’t hold true but when I dug around I even contacted us to my political leader good friends Guv Senators they didn’t learn about it I imply 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 because you took the PPP also not true so let’s ask Josh why does no one know about the staff member retention credit you understand what’s fascinating you’re discussing the banks Kevin because in the PPP loan procedure the federal government made it really clear that if you wanted a PPP loan you would call Wells Fargo Citibank Bank of America any of the huge 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 procedure process that’s all um and here there was turmoil because remember in the initial cares act you could refrain from doing 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 refraining from doing ERC because it’s not alone so you’re getting a tax refund so the government never made it clear to anybody about how to.
do this does your CFO understand how to do this not really he or she’s never done it before do the banks do it nope the banks don’t do it the payroll business yeah some of them are doing it as a payroll business your accounting professional no your accounting professional’s never done this prior to unless you have an account that entered into this organization and bottom line my company Kevin has actually been in business considering that 2009 and we have actually been dealing with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 companies so a great deal of our huge big corporate clients have actually worked with bottom line to recuperate other federal government programs we have actually done sales tax and use tax joblessness tax work chance tax credits research and development tax credits unclaimed property 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 workers on their payroll. The credit is 50% of approximately $10,000 in salaries paid by an.
company whose organization is totally or partially suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
1. The credit is offered to all companies no matter size including tax exempt companies. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
businesses who take Small company Loans.
2. To certify, the employer needs to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s business is fully or partly suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross receipts are listed below 50% of the comparable quarter in 2019. As soon as the.
employer’s gross invoices exceed 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 certifying salaries paid up to $10,000 in overall.
It is effective for salaries paid after March 13th and prior to December 31, 2020.
The definition of qualifying salaries differs by whether an employer had, typically, basically than.
100 staff members in 2019.
Companies that focus on ERC filing help generally supply knowledge and assistance to assist companies navigate the intricate process of declaring the credit. They can provide numerous services, consisting of:.
How is the employee retention credit calculated? Who Is Eligible For The Employee Retention Credit
Eligibility Assessment: These companies will examine your service’s eligibility for the ERC based on factors such as your industry, earnings, and operations. If you fulfill the requirements for the credit and determine the maximum credit quantity you can declare, they can assist identify.
Documentation and Calculation: ERC filing services will help in gathering the required documentation, such as payroll records and financial statements, to support your claim. They will likewise help compute the credit quantity based upon qualified wages and other certifying costs.
Retroactive Claim Review: If you are qualified to claim the ERC for prior quarters, these companies can evaluate your past payroll records and financials to determine possible chances for retroactive credits. They can help you modify prior income tax return to declare these refunds.
Filing Support: Companies concentrating on ERC filings will prepare and submit the necessary kinds and documents on your behalf. This consists of finishing Type 941 or any other necessary tax forms.
Compliance and Updates: ERC regulations and guidance have developed over time. These companies remain upgraded with the most recent changes and make sure that your filings comply with the most present standards. They can likewise offer continuous assistance if the IRS requests extra information or carries out an audit related to your ERC claim.
It is very important to research and veterinarian any company providing ERC filing help to ensure their reliability and competence. Try to find established companies with experience in tax and payroll services, or think about connecting to relied on accounting companies or tax specialists who use ERC filing assistance.
Keep in mind that while these business can offer important help, it’s constantly an excellent idea to have a fundamental understanding of the ERC requirements and procedure yourself. This will help you make notified choices and make sure 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 objective of the ERC is to encourage organizations to retain and pay their workers during the pandemic, even if their operations have been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to eligible employers, including for-profit services, tax-exempt organizations, and specific governmental entities. To qualify, companies should fulfill one of two requirements:.
Business operations were completely or partly suspended due to a federal government order related to COVID-19.
The business experienced a significant decline in gross invoices. As mentioned previously, for 2021, a considerable decline is defined as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a considerable 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 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 amount is equal to a percentage (up to 70%) of certified salaries paid to workers, including particular 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, companies that received a Paycheck Security Program (PPP) loan were not qualified 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. The exact same incomes can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively broadened and enhanced, permitting qualified companies to declare the credit for qualified earnings paid as far back as March 13, 2020. This retroactive provision provides a chance for businesses to amend prior-year tax returns and receive refunds.
Declaring the Credit: Employers can declare the ERC by reporting it on their employment income tax return, typically Type 941. If the credit surpasses the amount of employment taxes owed, the excess can be reimbursed to the employer.
It is very important to note that the ERC arrangements and eligibility requirements have evolved over time. The best strategy is to consult with a tax professional or visit the official internal revenue service site for the most comprehensive and current information regarding the ERC, including any current legislative modifications or updates.
To get approved for the ERC, a business must satisfy among the following requirements:.
The business operations were completely or partially suspended due to a federal government order related to COVID-19.
Business experienced a significant decline in gross receipts. For 2021, a substantial decrease is defined as a 20% decline in gross invoices 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 exact same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
The ERC is available to businesses of all sizes, consisting of tax-exempt organizations, however there are some exceptions. Government entities and organizations that received a PPP loan may have constraints on declaring the credit.
The procedure for declaring the ERC involves finishing the essential forms and including the credit on your work income tax return (generally Kind 941). The exact time it requires to process the credit can vary based on a number of elements, consisting of the complexity of your organization and the work of the internal revenue service. It’s recommended to consult with a tax expert for guidance particular to your situation.
There are numerous companies that can assist with the procedure of declaring the ERC. These consist of accounting companies, tax advisory services, and payroll service providers. Some popular companies that use help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research and get in touch with these business straight to inquire about their fees and services.
Please keep in mind that the information offered here is based upon general knowledge and might not reflect the most current updates or changes to the ERC. It’s important to talk to a tax expert or go to the main internal revenue service site for the most accurate and up-to-date info regarding eligibility, declaring treatments, and offered assistance.
Less than 100. The credit is based if the company had 100 or less staff members on average in 2019.
on earnings paid to all employees whether they really worked or not. To put it simply, even if the.
workers worked full time and made money for full time work, the company still gets the credit.
Greater than 100. The credit is if the company had more than 100 employees on average in 2019.
permitted just for wages paid to employees who did not work throughout the calendar quarter.
In both cases, “earnings” includes not just money payments but also a part of the expense of company.
offered healthcare. Who Is Eligible For The Employee Retention Credit
Companies can be immediately reimbursed for the credit by lowering the quantity of payroll taxes they.