Lets talk first about Difference Between Refundable And Nonrefundable Employee Retention Credit :
Our team here what do these men doing everyone in this room is helping teach people about ERC and uh constantly provide a stunning breakfast and have people really learn about the program we ought to head to the space where we are able to display a few of the checks that we are getting for business and I want to see that what is this this is uh hundreds of millions of dollars literally Kevin hundreds of millions of dollars so these are duplicate copies of the letters that go to customers verifying that the check is on the method I mean you understand if you just start to look at a few of these here I indicate this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I mean it’s just I mean 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 validated and the check is on the mail in the mail from the IRS heading to the consumer so that’s how you have the ability to track it you know when you
receive this you understand the check is gone for sure which’s when they pay so they don’t pay anything up until they in fact get the cash they do not pay bottom line Wonder trust anything until this letter is confirmed the check is on the method they deposit it into their savings account and they can truly trust Wonder trust that the process has been finished and the number of you believe you have actually processed because you started this we’re about 35 000 of these for
about six billion dollars wow so plainly they understand what they’re doing which’s what you require 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 discussing something actually important today the staff member retention credit which most of you have actually never heard of I definitely had not heard of it till very recently and found out a lot about it since this is probably the most affordable cost of capital for any small company anywhere
anytime if you have staff members in between five and five hundred so I have actually got the expert with me this is Josh Fox he’s the founder and CEO of bottom line Ideas 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 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 us all about it and how to get it and why I’ve become yes the Ambassador and paid representative for this I enjoy this program it’s going away soon you got to learn everything about it let’s talk staff member 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 companies three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone it makes a big 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 money payroll tax refund fine go on sorry I just need to make sure we got that point I indicate that’s a big difference a loan versus cash money I like cash money 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 original cares Act is the ERC and yes Kevin it is a stunning tough check in the mail where you get real 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 had to be a staff member so I’m going to make the Assumption this money is not for the owner not for people on the cap table not for investors it’s for staff members right you needed to have actually owned a service however it’s based on 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 eligible 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 correct so there were 6 quarters the program was open well walk us through the six quarters so you had quarters 2 3 and 4 of 2020 and you had quarters one two and three of 2021. alright so that’s how it’s measured you have to be on the W-2 during that period 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 computation in 2020 to be specific Kevin is 50 of the worker’s wage to an optimum of 5 thousand dollars per staff member for the year of 2020 and in 2021 the numbers escalated to 70 of the staff member’s income to a maximum of seven thousand per quarter how did that happen um they simply changed the rules in.
2021 versus because the mayhem of the pandemic so they wanted to even get more to keep those employees 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 takes place 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 employee that is since that’s a lot of money it is now there’s a caution here the PPP cash would need to be minimized from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would reduce the 26 000 so what we’re seeing usually Kevin is if you took PPP cash someplace around 10 thousand dollars a person so let’s say hypothetically you owned a dining establishment 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 obviously now the huge concern is why does no one understand about this since look when I first became aware of this when I initially met Josh you understand I have actually got great deals of investments in great deals of business I’m a major advocate for entrepreneurship in America and make numerous numerous investments in entrepreneurs 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 utilize 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 been worthy of and we utilized them wisely to stay alive throughout the pandemic so when I became aware of this I said nah it can’t be true however when I dug around I even contacted us to my political leader friends Governor Senators they didn’t learn about it I imply that’s how you know that’s how misinformation is that there’s no information out there then a bunch of individuals informed me well you can’t get it because you took the PPP also not true so let’s ask Josh why does no one understand about the staff member retention credit you know what’s intriguing you’re discussing the banks Kevin because in the PPP loan procedure the federal government made it really clear that if you wanted a PPP loan you would call Wells Fargo Citibank Bank of America any of the big 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 just procedure process that’s all um and here there was chaos since remember in the original cares act you might refrain from doing both programs so if you had done PPP you might refrain from doing 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 federal government never ever made it clear to any person about how to.
do this does your CFO know how to do this not really he or she’s never ever done it in the past do the banks do it nope the banks do not do it the payroll companies yeah a few of them are doing it as a payroll business your accountant no your accountant’s never done this prior to unless you have an account that entered into this business and bottom line my firm Kevin has actually been in business considering that 2009 and we have actually been working with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 business so a great deal of our big huge corporate customers have worked with bottom line to recuperate other federal government programs we’ve done sales tax and utilize tax unemployment 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 developed to encourage.
employers to keep workers on their payroll. The credit is 50% of as much as $10,000 in wages paid by an.
company whose service is fully or partially suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
1. The credit is available to all employers regardless of size including tax exempt organizations. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) small.
organizations who take Small company Loans.
2. To certify, the company has to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s organization is fully or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are listed below 50% of the equivalent quarter in 2019. When the.
employer’s gross receipts exceed 80% of an equivalent quarter in 2019 they no longer certify.
after the end of that quarter.
Calculation of the Credit.
The amount 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 certifying salaries varies by whether a company had, usually, more or less than.
100 staff members in 2019.
Business that focus on ERC filing assistance typically offer expertise and assistance to assist services navigate the intricate procedure of declaring the credit. They can provide numerous services, including:.
How is the employee retention credit calculated? Difference Between Refundable And Nonrefundable Employee Retention Credit
Eligibility Assessment: These business will assess your organization’s eligibility for the ERC based on elements such as your industry, revenue, and operations. If you fulfill the requirements for the credit and recognize the maximum credit amount you can declare, they can help figure out.
Paperwork and Calculation: ERC filing services will help in gathering the required documents, such as payroll records and monetary statements, to support your claim. They will likewise assist determine the credit quantity based upon eligible wages and other qualifying expenditures.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for prior quarters, these companies can examine your previous payroll records and financials to determine potential opportunities for retroactive credits. They can assist you change previous income tax return to declare these refunds.
Filing Support: Business focusing on ERC filings will prepare and send the necessary forms and documentation on your behalf. This includes completing Form 941 or any other required tax forms.
Compliance and Updates: ERC policies and guidance have developed in time. These business stay upgraded with the most recent modifications and make sure that your filings adhere to the most existing standards. If the IRS demands extra info or carries out an audit related to your ERC claim, they can also offer ongoing support.
It is necessary to research and veterinarian any business providing ERC filing support to ensure their credibility and know-how. Look for established firms with experience in tax and payroll services, or consider reaching out to relied on accounting companies or tax experts who provide ERC submitting support.
Keep in mind that while these companies can supply valuable assistance, it’s constantly a good concept to have a standard understanding of the ERC requirements and process yourself. This will help you make informed decisions and ensure accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief measures. The goal of the ERC is to encourage organizations to keep and pay their workers during the pandemic, even if their operations have actually been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to qualified employers, including for-profit businesses, tax-exempt organizations, and particular governmental entities. To qualify, employers should fulfill one of two requirements:.
The business operations were completely or partly suspended due to a federal government order related to COVID-19.
The business experienced a substantial decline in gross invoices. As pointed out previously, for 2021, a significant decrease is specified as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross receipts compared to the immediately preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit amount is equal to a portion (up to 70%) of qualified salaries paid to staff members, consisting of specific health plan expenditures. 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, organizations that got an Income Defense Program (PPP) loan were not eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 enables businesses to claim the ERC even if they got a PPP loan. The same incomes can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively broadened and improved, permitting qualified employers to declare the credit for certified incomes paid as far back as March 13, 2020. This retroactive arrangement offers an opportunity for companies to amend prior-year income tax return and get refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their employment tax returns, typically Type 941. The excess can be reimbursed to the employer if the credit surpasses the amount of employment taxes owed.
It is very important to keep in mind that the ERC arrangements and eligibility criteria have actually progressed over time. The very best strategy is to talk to a tax professional or check out the official internal revenue service site for the most detailed and up-to-date details regarding the ERC, including any current legislative changes or updates.
To qualify for the ERC, an organization needs to satisfy among the following requirements:.
The business operations were totally or partly suspended due to a government order related to COVID-19.
The business experienced a significant decline in gross invoices. For 2021, a significant decline is specified as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a substantial decline is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross invoices compared to the immediately preceding quarter.
The ERC is available to organizations of all sizes, including tax-exempt organizations, however there are some exceptions. For instance, government entities and businesses that received a PPP loan may have limitations on claiming the credit.
The procedure for declaring the ERC includes completing the needed types and consisting of the credit on your employment tax return (generally Type 941). The exact time it takes to process the credit can vary based on numerous aspects, consisting of the intricacy of your service and the workload of the IRS. It’s recommended to seek advice from a tax professional for assistance particular to your scenario.
There are several business that can assist with the process of claiming the ERC. These include accounting firms, tax advisory services, and payroll company. Some well-known companies that use help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research and contact these business directly to ask about their services and fees.
Please note that the information provided here is based on general understanding and may not reflect the most current updates or modifications to the ERC. It is very important to speak with a tax professional or check out the official IRS site for the most up-to-date and precise info concerning eligibility, claiming treatments, and available support.
Less than 100. If the employer had 100 or fewer staff members typically in 2019, then the credit is based.
on incomes paid to all staff members whether they in fact worked or not. Simply put, even if the.
workers worked full-time and got paid for full time work, the company still gets the credit.
Greater than 100. If the employer had more than 100 workers on average in 2019, then the credit is.
permitted only for wages paid to workers who did not work throughout the calendar quarter.
In both cases, “incomes” includes not simply money payments but also a part of the cost of company.
provided healthcare. Difference Between Refundable And Nonrefundable Employee Retention Credit
Employers can be right away repaid for the credit by lowering the quantity of payroll taxes they.