Lets talk first about Calculating Employee Retention Credit :
Our group here what do these guys doing everybody in this room is helping teach individuals about ERC and uh constantly provide a gorgeous breakfast and have individuals actually learn about the program we ought to head to the room where we are able to display some of the checks that we are getting for companies and I ‘d like to see that what is this this is uh numerous countless dollars literally Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to customers verifying that the check is on the way I imply you know if you just begin to take a look at a few of these here I imply this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s just I mean 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 confirmed the numbers are verified and the check is on the mail in the mail from the internal revenue service heading to the client so that’s how you’re able to track it you know when you
receive this you know the check is chosen sure which’s when they pay so they don’t pay anything until they really get the money they do not pay bottom line Wonder trust anything until this letter is confirmed the check is on the way they transfer it into their checking account and they can truly rely on Wonder trust that the procedure has been finished and how many you believe you’ve processed given that you began this we’re about 35 000 of these for
about 6 billion dollars wow so clearly they understand what they’re doing which’s what you require you require professionals 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 discussing something truly crucial today the worker retention credit which most of you have never heard of I certainly hadn’t heard of it until really just recently and found out a lot about it because this is probably the most affordable expense of capital for any small company anywhere
anytime if you have employees between 5 and five hundred so I have actually got the expert with me this is Josh Fox he’s the creator and CEO of bottom line Concepts they’re the biggest processor of these ERC credits this is a 170 page program so it’s hard this isn’t like PPP we simply call up your bank supervisor and state offer 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’ve ended up being yes the Ambassador and paid spokesperson for this I like this program it’s going away soon you got to discover all about it let’s talk employee retention credit Josh Fox what is an ERC let’s just start there so throughout the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act used organizations three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everybody 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 simply need to make sure we got that point I imply that’s a huge distinction a loan versus cash money I like money cash 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 initial cares Act is the ERC and yes Kevin it is a beautiful tough check in the mail where you get actual money from the internal revenue service all right so let’s speak about how it works since it seems like to me if it’s a if it’s employee retention credit that individual 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 investors it’s for workers right you needed to have owned a company however it’s based upon you having W-2 staff members 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 proper so there were 6 quarters the program was open well stroll us through the six quarters so you had quarters two 3 and 4 of 2020 and you had quarters one 2 and three of 2021. okay so that’s how it’s measured you have to be on the W-2 throughout that period now let’s talk my preferred part money how much can you get back per staff member that was on a W-2 in those six quarters so the calculation in 2020 to be precise Kevin is 50 of the employee’s income to a maximum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s income to an optimum of 7 thousand per quarter how did that take place um they just altered the rules in.
2021 versus due to the fact that the chaos 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 approximately 5 thousand Max and after that 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 six thousand dollars per staff member that is because that’s a great deal of money it is now there’s a caution here the PPP money would need to be decreased from the twenty 6 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 money someplace around ten thousand dollars a person so let’s say hypothetically you owned a restaurant in New york city 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 big certainly now the huge concern is why does nobody know about this due to the fact that appearance when I first became aware of this when I initially fulfilled Josh you know I’ve got lots of financial investments in lots of business I’m a significant supporter for entrepreneurship in America and make numerous lots of investments in business owners of which many 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 money 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 should have and we used them wisely to stay alive during the pandemic so when I found out about this I said nah it can’t hold true but when I dug around I even contacted us to my political leader good friends Governor Senators they didn’t understand about it I indicate that’s how you understand that’s how misinformation is that there’s no information out there then a lot of individuals told me well you can’t get it since you took the PPP also not true so let’s ask Josh why does no one know about the worker retention credit you understand what’s interesting you’re talking about the banks Kevin since in the PPP loan process the federal government made it very clear that if you desired a PPP loan you would call Wells Fargo Citibank Bank of America any of the big banks in our country 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 chaos because keep in mind in the initial cares act you could not do 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 not 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 anyone about how to.
do this does your CFO know how to do this not really she or he’s never done it in the past 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 accountant’s never ever done this before 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 federal government to recover money for Fortune 500 Fortune 1000 companies so a great deal of our huge big corporate customers have worked 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 property tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit designed to motivate.
employers to keep staff members on their payroll. The credit is 50% of as much as $10,000 in incomes paid by an.
company whose service is fully or partly suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
1. The credit is offered to all employers no matter size including tax exempt companies. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
businesses who take Small company Loans.
2. To qualify, the employer needs to fulfill one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s organization is fully or partly suspended by government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the equivalent quarter in 2019. When the.
company’s gross receipts exceed 80% of an equivalent quarter in 2019 they no longer certify.
after completion of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the qualifying incomes paid up to $10,000 in total.
It is effective for incomes paid after March 13th and prior to December 31, 2020.
The meaning of qualifying incomes varies by whether a company had, usually, basically than.
100 staff members in 2019.
Business that specialize in ERC filing help typically supply know-how and assistance to help companies browse the complicated process of claiming the credit. They can offer various services, consisting of:.
How is the employee retention credit calculated? Calculating Employee Retention Credit
Eligibility Assessment: These business will assess your service’s eligibility for the ERC based upon elements such as your industry, profits, and operations. If you fulfill the requirements for the credit and recognize the maximum credit amount you can claim, they can assist determine.
Paperwork and Computation: ERC filing services will help in collecting the necessary documents, such as payroll records and monetary declarations, to support your claim. They will also assist calculate the credit quantity based upon eligible earnings and other qualifying expenses.
Retroactive Claim Review: If you are qualified to declare the ERC for previous quarters, these companies can review your previous payroll records and financials to recognize prospective chances for retroactive credits. They can assist you modify prior tax returns to declare these refunds.
Filing Help: Business specializing in ERC filings will prepare and send the necessary kinds and documents in your place. This consists of finishing Kind 941 or any other necessary tax forms.
Compliance and Updates: ERC guidelines and assistance have actually progressed gradually. These companies stay upgraded with the latest modifications and ensure that your filings adhere to the most existing standards. If the IRS demands additional details or carries out an audit associated to your ERC claim, they can also offer continuous assistance.
It’s important to research study and vet any business using ERC filing support to ensure their credibility and competence. Look for recognized companies with experience in tax and payroll services, or think about connecting to trusted accounting firms or tax experts who use ERC submitting assistance.
Remember that while these companies can offer valuable help, it’s constantly a good concept to have a fundamental understanding of the ERC requirements and procedure yourself. This will assist you make notified decisions and make sure accurate 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 motivate services to maintain and pay their staff members during the pandemic, even if their operations have actually been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to eligible employers, including for-profit businesses, tax-exempt organizations, and particular governmental entities. To certify, companies need to satisfy one of two criteria:.
Business operations were completely or partly suspended due to a government order related to COVID-19.
The business experienced a considerable decrease in gross receipts. As mentioned earlier, for 2021, a substantial decrease is defined as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decline in gross receipts compared to the right away preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity amounts to a percentage (approximately 70%) of qualified incomes paid to employees, consisting of certain health plan expenses. 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: At first, businesses that got an Income Security Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 enables services to claim the ERC even if they got a PPP loan. Nevertheless, the exact same earnings can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively expanded and boosted, permitting qualified employers to claim the credit for qualified incomes paid as far back as March 13, 2020. This retroactive arrangement supplies an opportunity for services to change prior-year income tax return and receive refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their work tax returns, usually Type 941. If the credit surpasses the amount of work taxes owed, the excess can be reimbursed to the employer.
It is essential to keep in mind that the ERC provisions and eligibility criteria have progressed in time. The very best course of action is to speak with a tax professional or go to the main internal revenue service site for the most in-depth and updated info regarding the ERC, consisting of any recent legal changes or updates.
To qualify for the ERC, an organization should satisfy one of the following requirements:.
Business operations were completely or partially suspended due to a government order related to COVID-19.
Business experienced a considerable 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% decline in gross receipts compared to the immediately preceding quarter.
The ERC is available to organizations of all sizes, including tax-exempt organizations, but there are some exceptions. For example, federal government entities and services that got a PPP loan might have constraints on claiming the credit.
The process for claiming the ERC includes finishing the required kinds and including the credit on your work income tax return (usually Kind 941). The exact time it requires to process the credit can differ based upon numerous factors, including the intricacy of your service and the workload of the IRS. It’s advised to consult with a tax expert for assistance particular to your circumstance.
There are several companies that can help with the procedure of declaring the ERC. Some popular business that provide help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the information provided here is based upon general knowledge and may not show the most current updates or changes to the ERC. It is necessary to speak with a tax professional or check out the main internal revenue service site for the most updated and precise info concerning eligibility, claiming treatments, and available support.
Less than 100. If the employer had 100 or less employees typically in 2019, then the credit is based.
on incomes paid to all staff members whether they in fact worked or not. To put it simply, even if the.
staff members worked full-time and got paid for full time work, the employer still gets the credit.
Greater than 100. The credit is if the employer had more than 100 workers on average in 2019.
permitted only for wages paid to employees who did not work throughout the calendar quarter.
In both cases, “wages” consists of not simply money payments but also a part of the expense of employer.
provided healthcare. Calculating Employee Retention Credit
Companies can be right away compensated for the credit by lowering the amount of payroll taxes they.