Lets talk first about Code Section 51(I)(1) Employee Retention Credit :
Our team here what do these men doing everybody in this space is helping teach individuals about ERC and uh constantly offer a beautiful breakfast and have people actually learn about the program we must head to the space where we have the ability 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 millions of dollars actually Kevin numerous countless dollars so these are duplicate copies of the letters that go to clients confirming that the check is on the method I mean you know if you just start to take a 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 suggest it’s just I imply consider the number of real 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 confirmed and the check is on the mail in the mail from the IRS heading to the consumer so that’s how you’re able to track it you understand when you
receive this you understand the check is gone for sure which’s when they pay so they do not pay anything until they in fact get the money they do not pay bottom line Wonder trust anything up until this letter is verified the check is on the method they transfer it into their checking account and they can genuinely rely on Wonder trust that the procedure has been completed and how many you believe you’ve processed given that you started this we have to do with 35 000 of these for
about six billion dollars wow so plainly they understand what they’re doing which’s what you need you need specialists 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 Wonderful here you’re at my YouTube channel we’re discussing something really important today the worker retention credit which the majority of you have never ever become aware of I certainly hadn’t heard of it until very recently and discovered a lot about it due to the fact that this is most likely the lowest expense of capital for any small business anywhere
anytime if you have workers between 5 and five hundred so I’ve got the expert with me this is Josh Fox he’s the creator and CEO of bottom line Ideas they’re the largest processor of these ERC credits this is a 170 page program so it’s difficult this isn’t like PPP we simply phone your bank supervisor and say offer me a loan it doesn’t 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 enjoy this program it’s disappearing soon you got to find out all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just start there so during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act offered companies 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 huge difference right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
fix the money cash payroll tax refund all right go on sorry I just have to make certain we got that point I suggest that’s a big distinction a loan versus money money I like money cash 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 initial cares Act is the ERC and yes Kevin it is a beautiful tough check in the mail where you get actual cash from the IRS all right so let’s talk about how it works due to the fact that it seems like to me if it’s a if it’s staff member 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 people on the cap table not for shareholders it’s for workers right you had to have actually owned a company however it’s based upon you having W-2 workers 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 need 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 two 3 and 4 of 2020 and you had quarters one two and three of 2021. fine so that’s how it’s determined you have to be on the W-2 throughout that duration now let’s talk my favorite part money just how much can you return per employee that was on a W-2 in those 6 quarters so the calculation in 2020 to be specific Kevin is 50 of the employee’s income to an optimum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers increased to 70 of the worker’s income to an optimum of 7 thousand per quarter how did that take place um they simply altered the rules in.
2021 versus since the mayhem 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 as much as 5 thousand Max and after that what takes place 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 six thousand dollars per employee that is because that’s a great deal of cash it is now there’s a caution here the PPP cash would have to be minimized from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would reduce the 26 000 so what we’re seeing typically Kevin is if you took PPP money somewhere around 10 thousand dollars an individual so let’s say hypothetically you owned a restaurant in New york city 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 substantial undoubtedly now the big question is why does no one understand about this because look when I first heard about this when I initially met Josh you understand I’ve got lots of financial investments in lots of business I’m a major supporter for entrepreneurship in America and make lots of numerous investments in business owners of which many suffered through the pandemic when I initially heard about this I called BS I do not believe it due to the fact that I use the PPP we went through the cash center Banks to get it it was extremely easy to do we had our CEOs call the banks they got their loans which were well deserved and we utilized them wisely to survive throughout the pandemic so when I became aware of this I said nah it can’t hold true however when I dug around I even contacted us to my politician good friends Governor Senators they didn’t learn about it I imply that’s how you understand that’s how misinformation is that there’s no details out there then a lot of people told me well you can’t get it because you took the PPP likewise not true so let’s ask Josh why does no one learn about the worker retention credit you understand what’s fascinating you’re discussing the banks Kevin due to the fact that in the PPP loan procedure 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 huge banks in our country and they would process procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply procedure procedure that’s all um and here there was turmoil because remember in the initial cares act you could 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 made it clear to anybody about how to.
do this does your CFO understand how to do this not truly he or she’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 company your accountant 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 been in business given that 2009 and we have actually been dealing with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 business so a great deal of our huge huge corporate clients have actually dealt with bottom line to recover other government programs we have actually done sales tax and use tax unemployment tax work opportunity tax credits research and development tax credits unclaimed home 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 workers on their payroll. The credit is 50% of as much as $10,000 in incomes paid by an.
employer whose organization is totally or partly suspended because of COVID-19 or whose gross invoices.
decrease by more than 50%.
1. The credit is offered to all employers regardless of size consisting of tax exempt organizations. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) small.
organizations who take Small company Loans.
2. To certify, the employer needs to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s business is completely or partially suspended by federal government order due to COVID-19.
throughout 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 go above 80% of an equivalent quarter in 2019 they no longer certify.
after the end of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the certifying salaries paid up to $10,000 in overall.
It is effective for incomes paid after March 13th and prior to December 31, 2020.
The meaning of certifying incomes varies by whether an employer had, typically, basically than.
100 staff members in 2019.
Companies that focus on ERC filing support usually provide expertise and assistance to assist companies browse the complex procedure of claiming the credit. They can provide numerous services, consisting of:.
How is the employee retention credit calculated? Code Section 51(I)(1) Employee Retention Credit
Eligibility Assessment: These companies will examine your company’s eligibility for the ERC based upon factors such as your industry, income, and operations. They can help determine if you fulfill the requirements for the credit and recognize the maximum credit quantity you can claim.
Documents and Estimation: ERC filing services will assist in collecting the essential paperwork, such as payroll records and monetary statements, to support your claim. They will also assist compute the credit quantity based upon eligible earnings and other qualifying expenditures.
Retroactive Claim Review: If you are qualified to claim the ERC for prior quarters, these business can examine your previous payroll records and financials to recognize prospective opportunities for retroactive credits. They can assist you modify prior income tax return to claim these refunds.
Filing Support: Business concentrating on ERC filings will prepare and send the essential types and paperwork on your behalf. This consists of completing Kind 941 or any other required tax forms.
Compliance and Updates: ERC guidelines and assistance have progressed over time. These business stay updated with the latest changes and guarantee that your filings comply with the most present guidelines. If the Internal revenue service demands additional details or carries out an audit related to your ERC claim, they can likewise offer ongoing support.
It is essential to research study and vet any company providing ERC filing assistance to guarantee their credibility and knowledge. Search for established firms with experience in tax and payroll services, or consider connecting to trusted accounting companies or tax professionals who use ERC submitting support.
Keep in mind that while these business can offer valuable help, it’s always a great idea to have a basic understanding of the ERC requirements and procedure yourself. This will help you make notified decisions and make sure precise 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 goal of the ERC is to motivate businesses to retain and pay their staff members throughout the pandemic, even if their operations have been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to qualified employers, consisting of for-profit companies, tax-exempt companies, and particular governmental entities. To qualify, companies need to meet one of two criteria:.
Business operations were completely or partially suspended due to a federal government order related to COVID-19.
Business experienced a considerable decrease in gross invoices. As pointed out earlier, for 2021, a considerable decrease is specified as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decline is specified as a 20% decline in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly 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 portion (up to 70%) of qualified earnings paid to workers, consisting of certain health insurance costs. The optimum credit per employee 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 Security Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 permits organizations to claim the ERC even if they received a PPP loan. The exact same wages can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and boosted, permitting qualified companies to declare the credit for qualified salaries paid as far back as March 13, 2020. This retroactive provision supplies an opportunity for companies to change prior-year income tax return and receive refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their employment income tax return, normally Form 941. If the credit exceeds the amount of employment taxes owed, the excess can be reimbursed to the employer.
It is necessary to keep in mind that the ERC arrangements and eligibility criteria have actually developed over time. The best strategy is to speak with a tax professional or go to the official internal revenue service site for the most current and detailed info concerning the ERC, consisting of any recent legislative modifications or updates.
To get approved for the ERC, a business should fulfill among the following requirements:.
The business operations were totally or partially suspended due to a federal government order related to COVID-19.
Business experienced a significant decrease in gross receipts. For 2021, a substantial decrease is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a considerable decline 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 instantly preceding quarter.
The ERC is offered to companies of all sizes, consisting of tax-exempt companies, but there are some exceptions. For instance, federal government entities and services that got a PPP loan may have restrictions on declaring the credit.
The procedure for declaring the ERC includes completing the needed forms and consisting of the credit on your employment tax return (typically Form 941). The exact time it requires to process the credit can vary based on several aspects, including the complexity of your service and the workload of the internal revenue service. It’s recommended to talk to a tax professional for assistance specific to your scenario.
There are numerous companies that can assist with the procedure of declaring the ERC. Some well-known companies that use assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the information provided here is based on general understanding and may not reflect the most recent updates or changes to the ERC. It is essential to seek advice from a tax expert or check out the main IRS site for the most current and accurate information relating to eligibility, claiming procedures, and available assistance.
Less than 100. If the employer had 100 or fewer workers usually in 2019, then the credit is based.
on incomes paid to all employees whether they really worked or not. To put it simply, even if the.
workers worked full-time and earned money for full-time work, the company still gets the credit.
Greater than 100. The credit is if the company had more than 100 employees on average in 2019.
allowed just for earnings paid to workers who did not work throughout the calendar quarter.
In both cases, “incomes” consists of not simply money payments however also a part of the cost of employer.
supplied health care. Code Section 51(I)(1) Employee Retention Credit
Companies can be immediately compensated for the credit by reducing the amount of payroll taxes they.