Lets talk first about 3 Ways To Qualify For Employee Retention Credit :
Our group here what do these people doing everybody in this space is helping teach people about ERC and uh always supply a beautiful breakfast and have people really discover the program we need to head to the room 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 literally Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to clients validating that the check is on the way I mean you understand if you simply begin to take a 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 indicate it’s just I suggest think of the number of real 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 verified and the check is on the mail in the mail from the internal revenue service 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 do not pay anything until they actually get the cash they don’t pay bottom line Wonder trust anything till this letter is verified the check is on the way they transfer it into their checking account and they can truly trust Wonder trust that the process has actually been finished and the number of you believe you have actually processed given that you began this we have to do with 35 000 of these for
about 6 billion dollars wow so plainly they understand what they’re doing which’s what you need you require specialists 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 truly essential today the employee retention credit which the majority of you have never ever heard of I definitely hadn’t heard of it up until very recently and discovered a lot about it because this is probably the most affordable cost of capital for any small business anywhere
anytime if you have employees between 5 and five hundred so I’ve got the expert with me this is Josh Fox he’s the founder 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 manager and state give me a loan it does not work there’s not a loan it’s an application and Josh is going to inform all of us about it and how to get it and why I’ve become yes the Ambassador and paid spokesperson for this I love this program it’s going away very soon you got to find out everything about it let’s talk worker retention credit Josh Fox what is an ERC let’s just begin there so during the Trump Administration when President Trump was enacted they came up with 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 everyone it makes a big difference right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
remedy the money cash payroll tax refund okay go on sorry I just need to make sure we got that point I mean that’s a big distinction a loan versus cash cash I like money cash that’s what we’re speaking about 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 gorgeous difficult check in the mail where you get real money from the internal revenue service all right so let’s talk about how it works since it seems like to me if it’s a if it’s staff member retention credit that individual needed to be a worker so I’m going to make the Presumption this cash is not for the owner not for people on the cap table not for shareholders it’s for employees right you had to have actually owned an organization but it’s based on you having W-2 employees 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 six months of 2021 on the W-2 proper so there were 6 quarters the program was open well stroll us through the 6 quarters so you had quarters 2 three and 4 of 2020 and you had quarters one two and 3 of 2021. fine so that’s how it’s measured you have to be on the W-2 during that duration now let’s talk my preferred part money how much can you return per staff member 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 an optimum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers escalated to 70 of the employee’s salary to an optimum of seven thousand per quarter how did that occur um they just altered the rules in.
2021 versus because 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 occurs 21 000 Max in 2021 oh that’s how you create twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty 6 thousand dollars per worker that is because that’s a great deal of money it is now there’s a caution 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 minimize the 26 000 so what we’re seeing typically Kevin is if you took PPP money someplace around ten thousand dollars an individual so let’s state hypothetically you owned a restaurant in New York City where I’m from and you had a hundred employees and you took PPP money you would still get a million dollar in the mail from the internal revenue service so it’s big undoubtedly now the big concern is why does nobody understand about this since appearance when I first became aware of this when I initially fulfilled Josh you understand I have actually got great deals of investments in great deals of companies I’m a major advocate for entrepreneurship in America and make lots of numerous financial investments in entrepreneurs of which many suffered through the pandemic when I initially heard about this I called BS I do not 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 and that were well deserved and we utilized them wisely to stay alive throughout the pandemic so when I became aware of this I stated nah it can’t hold true however when I dug around I even contacted us to my politician buddies Governor Senators they didn’t know about it I indicate that’s how you know that’s how misinformation is that there’s no info out there then a lot of people informed me well you can’t get it because you took the PPP also not real so let’s ask Josh why does no one know about the worker retention credit you know what’s intriguing you’re discussing the banks Kevin due to the fact that in the PPP loan process 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 process in Canada a pre-pp loan there’s no loans in Canada by the way it’s just process process that’s all um and here there was turmoil since keep in mind in the original cares act you might refrain from doing both programs so if you had actually done PPP you might not do ERC in the initial program and when they changed the law in 2021 the banks were refraining from doing ERC due to the fact that it’s not alone so you’re getting a tax refund so the federal 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 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 actually been in business since 2009 and we’ve been dealing with the federal government and the state federal government to recuperate money for Fortune 500 Fortune 1000 business so a great deal of our big big corporate clients have worked with bottom line to recuperate other government programs we have actually done sales tax and use tax joblessness 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 created to encourage.
companies to keep employees on their payroll. The credit is 50% of as much as $10,000 in salaries paid by an.
employer whose company is fully or partially suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
Schedule.
1. The credit is available to all companies no matter size including tax exempt companies. There are.
just two exceptions: (1) state and city governments and their instrumentalities and (2) small.
services who take Small Business Loans.
2. To certify, the employer needs to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s service is totally or partially suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross invoices are listed below 50% of the similar quarter in 2019. When the.
company’s gross receipts exceed 80% of a comparable quarter in 2019 they no longer certify.
after completion of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the qualifying salaries paid up to $10,000 in total.
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, usually, more or less than.
100 employees in 2019.
Business that specialize in ERC filing support usually supply expertise and assistance to help organizations browse the complex process of claiming the credit. They can offer numerous services, including:.
How is the employee retention credit calculated? 3 Ways To Qualify For Employee Retention Credit
Eligibility Assessment: These companies will examine your organization’s eligibility for the ERC based upon elements such as your industry, profits, and operations. If you meet the requirements for the credit and recognize the optimum credit amount you can claim, they can assist figure out.
Documents and Computation: ERC filing services will help in collecting the necessary documentation, such as payroll records and monetary declarations, to support your claim. They will likewise help calculate the credit quantity based on eligible incomes 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 identify prospective opportunities for retroactive credits. They can assist you change previous income tax return to declare these refunds.
Filing Help: Companies concentrating on ERC filings will prepare and submit the necessary types and paperwork in your place. This consists of finishing Type 941 or any other necessary tax return.
Compliance and Updates: ERC guidelines and assistance have actually developed over time. These companies remain upgraded with the current modifications and make sure that your filings abide by the most present guidelines. If the IRS demands extra info or performs an audit related to your ERC claim, they can also provide ongoing assistance.
It is essential to research study and veterinarian any business offering ERC filing help to guarantee their trustworthiness and expertise. Look for established companies with experience in tax and payroll services, or consider reaching out to trusted accounting companies or tax professionals who offer ERC filing support.
Keep in mind that while these business can supply valuable assistance, it’s constantly an excellent concept to have a fundamental understanding of the ERC requirements and procedure yourself. This will assist you make informed choices and guarantee precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief measures. The goal of the ERC is to encourage organizations to maintain and pay their staff members throughout the pandemic, even if their operations have actually been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to qualified employers, consisting of for-profit businesses, tax-exempt organizations, and specific governmental entities. To qualify, employers need to satisfy one of two criteria:.
The business operations were fully or partly suspended due to a federal government order related to COVID-19.
The business experienced a considerable decline in gross receipts. As mentioned previously, for 2021, a substantial 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 specified as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross invoices 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 quantity amounts to a portion (approximately 70%) of qualified salaries paid to staff members, including certain health insurance costs. The optimum 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 got an Income Protection Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 permits businesses to claim the ERC even if they received a PPP loan. However, the exact same salaries can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and enhanced, permitting eligible employers to declare the credit for certified wages paid as far back as March 13, 2020. This retroactive provision supplies a chance for organizations to modify prior-year income tax return and get refunds.
Claiming the Credit: Companies can declare the ERC by reporting it on their employment tax returns, generally Form 941. The excess can be reimbursed to the company if the credit goes beyond the quantity of work taxes owed.
It is very important to note that the ERC provisions and eligibility criteria have evolved over time. The very best strategy is to talk to a tax expert or check out the official internal revenue service website for the most detailed and updated info relating to the ERC, including any recent legal modifications or updates.
To receive the ERC, a company must fulfill among the following requirements:.
Business operations were fully or partially suspended due to a government order related to COVID-19.
The business experienced a considerable decrease in gross invoices. For 2021, a substantial decrease is specified as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a considerable decrease 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 offered to services of all sizes, including tax-exempt companies, however there are some exceptions. For instance, federal government entities and companies that got a PPP loan might have restrictions on declaring the credit.
The process for declaring the ERC includes finishing the required forms and consisting of the credit on your employment tax return (typically Type 941). The exact time it requires to process the credit can differ based upon a number of elements, including the complexity of your business and the workload of the IRS. It’s recommended to speak with a tax professional for assistance particular to your scenario.
There are several business that can aid with the process of claiming the ERC. These include accounting firms, tax advisory services, and payroll service providers. Some widely known business that provide help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research study and contact these companies straight to ask about their charges and services.
Please keep in mind that the details supplied here is based on basic understanding and might not show the most recent updates or modifications to the ERC. It is necessary to seek advice from a tax professional or go to the main IRS site for the most precise and current information concerning eligibility, claiming treatments, and available support.
Less than 100. If the employer had 100 or fewer employees typically in 2019, then the credit is based.
on salaries paid to all employees whether they in fact worked or not. To put it simply, even if the.
employees worked full time and earned money 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.
permitted just for incomes paid to employees who did not work throughout the calendar quarter.
In both cases, “salaries” consists of not simply cash payments however also a part of the expense of company.
supplied healthcare. 3 Ways To Qualify For Employee Retention Credit
Payment.
Employers can be right away repaid for the credit by decreasing the amount of payroll taxes they.