Lets talk first about 2020 Employee Retention Credit Changes :
Our group here what do these people doing everyone in this room is assisting teach people about ERC and uh always offer a stunning breakfast and have people actually learn about the program we should head to the room where we are able to display a few of the checks that we are getting for companies and I wish to see that what is this this is uh numerous countless dollars actually 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 imply you understand if you simply start to look at some 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 simply I indicate consider how many actual clients that went through the program yeah this is the very end this is the party at the end when the check is validated 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 understand when you
receive this you know the check is chosen sure and that’s when they pay so they don’t pay anything till they in fact get the money they don’t pay bottom line Wonder trust anything till this letter is confirmed the check is on the way they transfer it into their checking account and they can genuinely rely on Wonder trust that the procedure has been finished and how many you think you have actually processed since you started this we have to do with 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 truly important today the staff member retention credit which most of you have never become aware of I certainly hadn’t become aware of it until really just recently and discovered a lot about it because this is most likely the lowest cost of capital for any small company anywhere
anytime if you have staff members in 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 Concepts they’re the biggest processor of these ERC credits this is a 170 page program so it’s challenging this isn’t like PPP we just contact your bank manager and state offer me a loan it does not 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 have actually become yes the Ambassador and paid spokesperson for this I love this program it’s going away very soon you got to learn all about it let’s talk worker retention credit Josh Fox what is an ERC let’s just start there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act offered services 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone it makes a huge difference right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
remedy the money cash payroll tax refund okay go on sorry I just have to ensure we got that point I suggest that’s a big distinction a loan versus cash cash I like money money that’s what we’re talking about alright 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 real cash from the internal revenue service all right so let’s speak about how it works since it sounds like to me if it’s a if it’s staff member retention credit that person had to be a worker so I’m going to make the Presumption this money is not for the owner not for people on the cap table not for investors it’s for employees right you had to have actually owned a business but it’s based upon you having W-2 employees in America not 10.99. 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 six months of 2021 on the W-2 correct so there were six quarters the program was open well stroll us through the 6 quarters so you had quarters 2 3 and four of 2020 and you had quarters one 2 and 3 of 2021. alright so that’s how it’s determined 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 staff member 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 income to an optimum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers escalated to 70 of the employee’s wage to a maximum of seven thousand per quarter how did that take place um they just altered the rules in.
2021 versus since the mayhem of the pandemic so they wished 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 as much as 5 thousand Max and after that what occurs 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 six thousand dollars per employee that is since that’s a lot of money it is now there’s a caution here the PPP cash would have to be decreased from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would minimize the 26 000 so what we’re seeing on average Kevin is if you took PPP money somewhere around 10 thousand dollars an individual 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 obviously now the huge concern is why does no one understand about this due to the fact that appearance when I first found out about this when I initially satisfied Josh you understand I’ve got lots of investments in lots of companies I’m a significant supporter for entrepreneurship in America and make lots of lots of investments in entrepreneurs of which lots of 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 use the PPP we went through the cash center Banks to get it it was really easy to do we had our CEOs call the banks they got their loans and that were well deserved and we used them wisely 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 called to my politician pals Guv Senators they didn’t know about it I suggest that’s how you understand that’s how misinformation is that there’s no details out there then a bunch of people informed me well you can’t get it since you took the PPP also not true so let’s ask Josh why does nobody understand about the worker 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 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 procedure that’s all um and here there was turmoil because remember in the original 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 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 made it clear to any person about how to.
do this does your CFO know how to do this not truly he or she’s never done it before do the banks do it nope the banks don’t do it the payroll companies yeah a few of them are doing it as a payroll business your accounting professional no your accounting professional’s never ever done this before unless you have an account that entered into this business and bottom line my company Kevin has stayed in business considering that 2009 and we’ve been dealing with the federal government and the state federal government to recover cash for Fortune 500 Fortune 1000 business so a great deal of our big big corporate customers have dealt with bottom line to recover other federal 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 employee retention tax credit is a broad based refundable tax credit developed to encourage.
companies to keep employees 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, employer whose organization is completely or partially suspended.
decrease by more than 50%.
1. The credit is offered 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) small.
companies who take Small Business Loans.
2. To qualify, the company has to satisfy one of two alternative tests. The tests are determined 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 company’s gross receipts are below 50% of the equivalent quarter in 2019. Once the.
company’s gross invoices exceed 80% of a similar quarter in 2019 they no longer certify.
after completion of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the certifying salaries paid up to $10,000 in total.
It works for incomes paid after March 13th and before December 31, 2020.
The meaning of certifying incomes differs by whether a company had, usually, more or less than.
100 employees in 2019.
Companies that focus on ERC filing support normally offer proficiency and assistance to assist organizations navigate the complicated process of declaring the credit. They can offer numerous services, including:.
How is the employee retention credit calculated? 2020 Employee Retention Credit Changes
Eligibility Assessment: These companies will evaluate your service’s eligibility for the ERC based on elements such as your industry, income, and operations. They can help determine if you satisfy the requirements for the credit and recognize the maximum credit amount you can declare.
Documents and Calculation: ERC filing services will assist in gathering the needed documents, such as payroll records and monetary declarations, to support your claim. They will likewise assist calculate the credit quantity based on qualified incomes and other certifying expenditures.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for prior quarters, these business can evaluate your previous payroll records and financials to determine possible chances for retroactive credits. They can assist you modify previous income tax return to claim these refunds.
Filing Help: Companies focusing on ERC filings will prepare and submit the necessary forms and documents in your place. This includes finishing Type 941 or any other necessary tax forms.
Compliance and Updates: ERC policies and guidance have actually evolved gradually. These companies stay upgraded with the latest changes and make sure that your filings abide by the most current guidelines. If the Internal revenue service requests extra info or carries out an audit related to your ERC claim, they can likewise supply ongoing assistance.
It is very important to research and vet any company using ERC filing support to ensure their trustworthiness and know-how. Look for established firms with experience in tax and payroll services, or think about reaching out to trusted accounting companies or tax professionals who offer ERC submitting assistance.
Bear in mind that while these business can offer important help, it’s constantly an excellent concept to have a fundamental understanding of the ERC requirements and procedure yourself. This will assist you make notified choices and make sure 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 encourage services to retain and pay their workers throughout the pandemic, even if their operations have actually been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is available to qualified employers, consisting of for-profit organizations, tax-exempt organizations, and certain governmental entities. To certify, companies need to meet one of two criteria:.
The business operations were totally or partly suspended due to a government order related to COVID-19.
Business experienced a considerable decline in gross invoices. As discussed previously, for 2021, a significant decline is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a substantial decrease is specified 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 instantly preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit quantity is equal to a percentage (as much as 70%) of qualified wages paid to staff members, consisting of particular 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: At first, businesses that got an Income Protection Program (PPP) loan were not eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 allows services to claim the ERC even if they received a PPP loan. The very same wages can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and enhanced, permitting eligible companies to declare the credit for qualified salaries paid as far back as March 13, 2020. This retroactive arrangement provides a chance for businesses to change prior-year tax returns and get refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their employment income tax return, usually Type 941. If the credit surpasses the amount of employment taxes owed, the excess can be refunded to the company.
It is essential to note that the ERC provisions and eligibility requirements have developed gradually. The best strategy is to talk to a tax professional or check out the main IRS website for the most comprehensive and current details concerning the ERC, consisting of any recent legal changes or updates.
To get approved for the ERC, an organization must meet among the following criteria:.
Business operations were totally or partially suspended due to a government order related to COVID-19.
Business experienced a substantial decline in gross receipts. For 2021, a substantial decrease is defined as a 20% decline in gross invoices 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 exact same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
The ERC is available to companies of all sizes, consisting of tax-exempt companies, but there are some exceptions. For example, government entities and organizations that got a PPP loan might have restrictions on claiming the credit.
The procedure for claiming the ERC involves finishing the needed kinds and consisting of the credit on your work tax return (generally Kind 941). The exact time it requires to process the credit can differ based upon several elements, consisting of the complexity of your service and the work of the IRS. It’s advised to consult with a tax professional for assistance specific to your circumstance.
There are numerous companies that can help with the process of claiming the ERC. Some well-known business that provide support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the information offered here is based on general understanding and may not show the most recent updates or changes to the ERC. It’s important to speak with a tax professional or check out the official internal revenue service site for the most up-to-date and precise information relating to eligibility, claiming treatments, and available support.
Less than 100. If the employer had 100 or fewer staff members on average in 2019, then the credit is based.
on incomes paid to all workers whether they in fact worked or not. Simply put, even if the.
employees worked full-time and got paid for full time work, the company still gets the credit.
Greater than 100. The credit is if the employer had more than 100 employees on average in 2019.
enabled just for wages paid to employees who did not work throughout the calendar quarter.
In both cases, “earnings” consists of not just cash payments however also a part of the cost of employer.
provided healthcare. 2020 Employee Retention Credit Changes
Employers can be immediately repaid for the credit by decreasing the amount of payroll taxes they.