Lets talk first about Who Qualifies Employee Retention Credit :
Our group here what do these men doing everyone in this space is helping teach individuals about ERC and uh constantly supply a stunning breakfast and have individuals really learn more about the program we ought to head to the space where we have the ability to display some of the checks that we are getting for business and I wish to see that what is this this is uh hundreds of millions of dollars actually Kevin numerous countless dollars so these are replicate copies of the letters that go to customers confirming that the check is on the method I mean you understand if you simply begin to look at a few of these here I suggest this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I mean it’s just I indicate think of how many 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 validated and the check is on the mail in the mail from the IRS heading to the client so that’s how you’re able to track it you understand when you
get this you understand the check is chosen sure which’s when they pay so they don’t pay anything till they in fact receive the money they do not pay bottom line Wonder trust anything up until this letter is confirmed the check is on the way they deposit it into their bank account and they can genuinely rely on Wonder trust that the procedure has actually been finished and how many you believe you have actually processed because you began this we’re about 35 000 of these for
about six billion dollars wow so plainly they know what they’re doing which’s what you need you need experts 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 speaking about something really crucial today the staff member retention credit which most of you have never become aware of I certainly hadn’t heard of it until very recently and learned a lot about it due to the fact that this is most likely the most affordable cost of capital for any small business anywhere
anytime if you have workers between five and five hundred so I’ve 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 hard this isn’t like PPP we just phone your bank supervisor and say provide me a loan it does not work there’s not a loan it’s an application and Josh is going to tell all of us about it and how to get it and why I have actually ended up being yes the Ambassador and paid representative for this I like this program it’s disappearing very soon you got to discover all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply start there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act offered services three chances 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 two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the money money payroll tax refund fine go on sorry I simply need to make sure we got that point I suggest that’s a big difference a loan versus cash cash I like money 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 original cares Act is the ERC and yes Kevin it is a beautiful difficult check in the mail where you get actual money 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 employee retention credit that individual needed 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 a business however it’s based upon you having W-2 employees 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 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 six quarters the program was open well walk us through the 6 quarters so you had quarters two three and 4 of 2020 and you had quarters one 2 and three of 2021. fine so that’s how it’s measured you need to be on the W-2 during that duration now let’s talk my favorite part cash 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 precise Kevin is 50 of the employee’s wage to a maximum of 5 thousand dollars per staff member for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the employee’s income to an optimum of 7 thousand per quarter how did that occur um they just changed the rules in.
2021 versus due to the fact that the turmoil 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 up to 5 thousand Max and then what occurs 21 000 Max in 2021 oh that’s how you develop twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty 6 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 money would need to be decreased from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would lower the 26 000 so what we’re seeing typically Kevin is if you took PPP cash someplace around 10 thousand dollars a person so let’s say 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 cash you would still get a million dollar in the mail from the IRS so it’s huge clearly now the big question is why does nobody understand about this due to the fact that look when I initially heard about this when I initially met Josh you know I have actually got lots of investments in great deals of companies I’m a significant advocate for entrepreneurship in America and make numerous many investments in business owners of which lots of suffered through the pandemic when I first became aware of this I called BS I do not think it because I utilize 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 wisely to survive during 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 politician pals Governor Senators they didn’t understand about it I mean that’s how you know that’s how misinformation is that there’s no information out there then a lot of individuals informed me well you can’t get it since you took the PPP likewise not true so let’s ask Josh why does nobody understand about the worker retention credit you understand what’s interesting you’re discussing the banks Kevin due to the fact that in the PPP loan procedure the federal government made it very 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 procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s just procedure procedure that’s all um and here there was turmoil since keep in mind in the initial cares act you might not do both programs so if you had done PPP you could refrain from doing ERC in the original program and when they changed 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 federal government never ever made it clear to anyone about how to.
do this does your CFO understand how to do this not actually he or she’s never ever done it before do the banks do it nope the banks don’t do it the payroll companies yeah some of them are doing it as a payroll business your accountant no your accounting professional’s never ever done this before unless you have an account that entered into this company and bottom line my company Kevin has been in business since 2009 and we’ve been dealing with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 companies so a great deal of our huge big business customers have actually dealt with bottom line to recover other government programs we have actually done sales tax and utilize 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 up to $10,000 in incomes paid by an.
Because of COVID-19 or whose gross receipts, employer whose service is totally or partially suspended.
decline by more than 50%.
Schedule.
1. The credit is readily available to all companies regardless of size consisting of tax exempt organizations. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) little.
companies who take Small Business Loans.
2. To qualify, the employer has to satisfy one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s company is fully or partly 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 comparable quarter in 2019. Once the.
employer’s gross receipts exceed 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 certifying salaries paid up to $10,000 in total.
It is effective for salaries paid after March 13th and before December 31, 2020.
The definition of certifying earnings varies by whether a company had, on average, basically than.
100 employees in 2019.
Business that specialize in ERC filing support usually provide competence and assistance to assist companies navigate the complicated procedure of claiming the credit. They can provide different services, including:.
How is the employee retention credit calculated? Who Qualifies Employee Retention Credit
Eligibility Evaluation: These companies will assess your business’s eligibility for the ERC based upon aspects such as your market, profits, and operations. They can help identify if you meet the requirements for the credit and recognize the maximum credit quantity you can declare.
Documents and Estimation: ERC filing services will help in collecting the required paperwork, such as payroll records and financial declarations, to support your claim. They will also help determine the credit quantity based on qualified wages and other certifying expenditures.
Retroactive Claim Review: If you are eligible to declare the ERC for prior quarters, these business can evaluate your past payroll records and financials to determine prospective opportunities for retroactive credits. They can help you change prior income tax return to claim these refunds.
Filing Help: Business focusing on ERC filings will prepare and submit the essential forms and paperwork in your place. This consists of completing Form 941 or any other necessary tax forms.
Compliance and Updates: ERC guidelines and guidance have evolved gradually. These business stay updated with the current changes and make sure that your filings abide by the most existing standards. They can likewise offer continuous assistance if the IRS demands extra info or performs an audit related to your ERC claim.
It is essential to research study and vet any company offering ERC filing assistance to ensure their reliability and knowledge. Try to find recognized firms with experience in tax and payroll services, or consider reaching out to trusted accounting firms or tax specialists who use ERC filing assistance.
Remember that while these companies can provide valuable assistance, it’s constantly an excellent idea to have a standard understanding of the ERC requirements and procedure yourself. This will help you make informed choices and make sure precise filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief procedures. The goal of the ERC is to motivate companies to retain and pay their staff members throughout the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to eligible employers, including for-profit companies, tax-exempt organizations, and particular governmental entities. To certify, companies need to fulfill one of two criteria:.
Business operations were fully or partially suspended due to a government order related to COVID-19.
Business experienced a significant decline in gross receipts. As pointed out previously, for 2021, a considerable decline is specified as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a substantial decline is defined as a 20% decline in gross receipts compared to the very same quarter in 2019, or a 20% decline in gross invoices compared to the immediately preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount amounts to a percentage (approximately 70%) of qualified earnings paid to staff members, consisting of specific health insurance expenditures. The optimum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, companies that got a Paycheck Protection Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 enables services to declare the ERC even if they got 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 actually been retroactively expanded and boosted, permitting eligible companies to claim the credit for certified salaries paid as far back as March 13, 2020. This retroactive arrangement supplies a chance for companies to amend prior-year income tax return and get refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their employment tax returns, generally Kind 941. The excess can be reimbursed to the employer if the credit surpasses the quantity of employment taxes owed.
It is essential to note that the ERC arrangements and eligibility criteria have evolved with time. The very best strategy is to speak with a tax professional or go to the main internal revenue service site for the most current and in-depth details relating to the ERC, including any recent legislative modifications or updates.
To get approved for the ERC, a service needs to fulfill among the following criteria:.
The business operations were totally or partly suspended due to a federal government order related to COVID-19.
The business experienced a significant decrease in gross receipts. For 2021, a significant decline is specified as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a considerable decrease is defined 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 right away preceding quarter.
The ERC is available to companies of all sizes, consisting of tax-exempt companies, but there are some exceptions. For instance, federal government entities and companies that got a PPP loan may have constraints on declaring the credit.
The process for claiming the ERC includes finishing the needed forms and consisting of the credit on your employment income tax return (typically Type 941). The exact time it takes to process the credit can vary based upon numerous elements, including the complexity of your company and the work of the IRS. It’s suggested to seek advice from a tax expert for guidance particular to your situation.
There are numerous companies that can assist with the process 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 offered here is based upon basic understanding and may not reflect the most recent updates or changes to the ERC. It’s important to talk to a tax professional or go to the official internal revenue service website for the most updated and precise details relating to eligibility, claiming procedures, and readily available help.
Less than 100. The credit is based if the employer had 100 or fewer employees on average in 2019.
on earnings paid to all staff members whether they in fact worked or not. In other words, even if the.
staff members worked full-time and got paid for full time work, the employer still gets the credit.
Greater than 100. If the employer had more than 100 employees on average in 2019, then the credit is.
permitted only for earnings paid to employees who did not work throughout the calendar quarter.
In both cases, “salaries” includes not just cash payments however likewise a portion of the expense of company.
provided health care. Who Qualifies Employee Retention Credit
Payment.
Companies can be immediately reimbursed for the credit by decreasing the amount of payroll taxes they.