Lets talk first about Can I Claim The Employee Retention Credit :
Our team here what do these men doing everybody in this space is helping teach individuals about ERC and uh always offer a lovely breakfast and have people actually learn more about the program we must head to the room where we have the ability to show a few of the checks that we are getting for companies and I want to see that what is this this is uh hundreds of countless dollars actually Kevin numerous countless dollars so these are replicate copies of the letters that go to customers verifying that the check is on the method I imply you understand if you simply begin to look at some of these here I suggest this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I imply it’s simply I mean think about how many 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 internal revenue service heading to the consumer so that’s how you have the ability to track it you understand when you
get this you understand the check is gone for sure and that’s when they pay so they do not pay anything till they really get the cash they don’t pay bottom line Wonder trust anything until this letter is validated the check is on the method they deposit it into their checking account and they can genuinely trust Wonder trust that the procedure has been completed and the number of you think you’ve processed considering that you started this we have to do with 35 000 of these for
about 6 billion dollars wow so clearly they know what they’re doing and that’s what you require 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 Terrific here you’re at my YouTube channel we’re talking about something truly crucial today the worker retention credit which the majority of you have actually never heard of I certainly hadn’t become aware of it till extremely recently and learned a lot about it because this is most likely the lowest expense of capital for any small company anywhere
anytime if you have staff members in between 5 and five hundred so I have actually got the professional with me this is Josh Fox he’s the creator and CEO of bottom line Concepts 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 simply call up your bank supervisor and say give me a loan it doesn’t 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 representative for this I enjoy 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 begin there so throughout the Trump Administration when President Trump was enacted they developed the cares Act and the cares act used services 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 big distinction right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the cash money payroll tax refund all right go on sorry I just need to make sure we got that point I suggest that’s a big difference a loan versus cash money I like cash money that’s what we’re discussing 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 gorgeous tough check in the mail where you get actual 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 worker 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 investors it’s for workers right you had to have actually owned an organization but 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 qualified so you have to be on payroll in 2020 on the W-2 and you have to be on payroll for the very first six months of 2021 on the W-2 proper so there were six quarters the program was open well walk us through the 6 quarters so you had quarters two 3 and 4 of 2020 and you had quarters one two and three of 2021. all right so that’s how it’s measured you need to be on the W-2 throughout 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 estimation in 2020 to be exact Kevin is 50 of the staff member’s wage to an optimum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the worker’s wage to a maximum of seven thousand per quarter how did that take place 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 up to 5 thousand Max and then what happens 21 000 Max in 2021 oh that’s how you create 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 need to be lowered from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two 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 restaurant in New york city City where I’m from and you had a hundred staff members and you took PPP money you would still get a million dollar in the mail from the IRS so it’s big clearly now the huge question is why does nobody understand about this because look when I initially became aware of this when I first met Josh you understand I’ve got great deals of investments in great deals of companies I’m a major advocate for entrepreneurship in America and make numerous many investments in entrepreneurs of which many suffered through the pandemic when I initially heard about this I called BS I don’t believe it since 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 been worthy of and we utilized them carefully to survive during the pandemic so when I heard about this I said nah it can’t hold true however when I dug around I even contacted us to my politician pals Governor Senators they didn’t learn about it I mean that’s how you know that’s how misinformation is that there’s no information out there then a bunch of people told me well you can’t get it due to the fact that you took the PPP also not real so let’s ask Josh why does no one understand about the staff member retention credit you know what’s interesting you’re discussing the banks Kevin due to the fact that in the PPP loan process the federal government made it really 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 just process process that’s all um and here there was turmoil since keep in mind in the original cares act you could refrain from doing both programs so if you had actually done PPP you might not do ERC in the original program and when they altered the law in 2021 the banks were not 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 previously 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 company your accountant no your accounting professional’s never ever done this prior to unless you have an account that went into this business and bottom line my company Kevin has actually been in business because 2009 and we have actually been dealing with the federal government and the state government to recuperate money for Fortune 500 Fortune 1000 business so a lot of our big big business clients have actually dealt with bottom line to recover other government programs we have actually done sales tax and utilize tax unemployment tax work chance tax credits research and development tax credits unclaimed property real estate tax all of these other 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 up to $10,000 in incomes paid by an.
employer whose company is completely or partly suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
1. The credit is offered to all employers regardless of size consisting of tax exempt organizations. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
services who take Small Business Loans.
2. To qualify, the employer has to satisfy one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s organization is totally or partly suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the comparable quarter in 2019. Once the.
employer’s gross receipts exceed 80% of a comparable quarter in 2019 they no longer certify.
after the end 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 before December 31, 2020.
The definition of qualifying earnings varies by whether a company had, usually, basically than.
100 employees in 2019.
Companies that focus on ERC filing support usually provide knowledge and support to help companies navigate the complicated process of declaring the credit. They can use various services, including:.
How is the employee retention credit calculated? Can I Claim The Employee Retention Credit
Eligibility Evaluation: These business will evaluate your business’s eligibility for the ERC based upon elements such as your market, profits, and operations. If you meet the requirements for the credit and recognize the optimum credit amount you can declare, they can assist determine.
Documents and Computation: ERC filing services will help in collecting the essential paperwork, such as payroll records and financial declarations, to support your claim. They will also help calculate the credit amount based on eligible earnings and other certifying expenditures.
Retroactive Claim Review: If you are eligible to claim the ERC for prior quarters, these business can evaluate your past payroll records and financials to recognize prospective chances for retroactive credits. They can assist you amend prior income tax return to declare these refunds.
Filing Assistance: Companies concentrating on ERC filings will prepare and submit the necessary kinds and paperwork on your behalf. This includes finishing Kind 941 or any other required tax forms.
Compliance and Updates: ERC regulations and assistance have evolved with time. These business remain upgraded with the most recent modifications and guarantee that your filings comply with the most existing guidelines. They can likewise provide continuous support if the internal revenue service demands additional details or carries out an audit related to your ERC claim.
It is essential to research and veterinarian any business using ERC filing assistance to ensure their reliability and know-how. Try to find established companies with experience in tax and payroll services, or consider connecting to relied on accounting firms or tax experts who offer ERC submitting support.
Keep in mind that while these companies can provide valuable support, it’s constantly a great concept to have a fundamental understanding of the ERC requirements and process yourself. This will help you make informed choices and make sure accurate filings.
The Worker 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 companies to retain and pay their workers throughout 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 companies, consisting of for-profit companies, tax-exempt organizations, and specific governmental entities. To qualify, companies should meet one of two criteria:.
Business operations were totally or partly suspended due to a federal government order related to COVID-19.
The business experienced a considerable decline in gross receipts. As mentioned earlier, for 2021, a significant decline is defined as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a substantial decline is specified as a 20% decline in gross receipts 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 employer’s share of Social Security taxes. The credit quantity amounts to a percentage (approximately 70%) of certified earnings paid to workers, including specific health plan costs. The optimum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, businesses that received a Paycheck Defense Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 allows companies to claim the ERC even if they received a PPP loan. Nevertheless, the very same earnings can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and boosted, permitting qualified companies to declare the credit for certified wages paid as far back as March 13, 2020. This retroactive provision provides an opportunity for companies to amend prior-year income tax return and receive refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their employment income tax return, generally Type 941. If the credit surpasses the quantity of employment taxes owed, the excess can be refunded to the employer.
It is essential to note that the ERC arrangements and eligibility criteria have evolved in time. The best course of action is to speak with a tax expert or go to the official IRS site for the most in-depth and up-to-date info relating to the ERC, consisting of any current legislative modifications or updates.
To receive the ERC, a service needs to fulfill among the following criteria:.
Business operations were completely or partly suspended due to a federal government order related to COVID-19.
The business experienced a substantial decrease in gross invoices. For 2021, a significant decline is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decline in gross invoices compared to the right away preceding quarter.
The ERC is offered to organizations of all sizes, consisting of tax-exempt companies, however there are some exceptions. For instance, federal government entities and businesses that got a PPP loan may have constraints on declaring the credit.
The process for declaring the ERC includes completing the needed forms and consisting of the credit on your employment income tax return (generally Form 941). The exact time it takes to process the credit can vary based on a number of elements, consisting of the complexity of your organization and the work of the IRS. It’s advised to speak with a tax expert for assistance particular to your circumstance.
There are a number of business that can assist with the process of claiming the ERC. Some well-known business that offer support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the details offered here is based on basic understanding and might not reflect the most recent updates or modifications to the ERC. It’s important to speak with a tax expert or visit the official internal revenue service site for the most accurate and updated information relating to eligibility, declaring procedures, and readily available help.
Less than 100. The credit is based if the employer had 100 or fewer staff members on average in 2019.
on wages paid to all workers whether they in fact worked or not. Simply put, even if the.
staff members worked full-time and earned money for full time work, the employer still gets the credit.
Greater than 100. If the employer had more than 100 employees typically in 2019, then the credit is.
permitted just for wages paid to workers who did not work during the calendar quarter.
In both cases, “wages” includes not simply cash payments but likewise a part of the expense of company.
supplied healthcare. Can I Claim The Employee Retention Credit
Employers can be instantly compensated for the credit by decreasing the amount of payroll taxes they.