Lets talk first about Do I Have To Pay Back The Employee Retention Credit :
Our team here what do these people doing everyone in this room is helping teach individuals about ERC and uh always supply a lovely breakfast and have people truly find out about the program we should head to the room where we have the ability to show some of the checks that we are getting for business and I ‘d like to see that what is this this is uh numerous countless dollars literally Kevin numerous millions of dollars so these are replicate copies of the letters that go to customers validating that the check is on the way I indicate you understand if you just start to take a look at some of these here I indicate this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s simply I mean consider 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 validated the numbers are validated and the check is on the mail in the mail from the internal revenue service heading to the client so that’s how you have the ability to track it you understand when you
get this you understand the check is chosen sure which’s when they pay so they don’t pay anything till they actually get the money they do not pay bottom line Wonder trust anything up until this letter is verified the check is on the way they deposit it into their savings account and they can really trust Wonder trust that the procedure has been finished and how many you think you have actually processed since you began this we have to do with 35 000 of these for
about six billion dollars wow so plainly they know 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 among these that’s what matters all right Mr Wonderful here you’re at my YouTube channel we’re speaking about something really essential today the worker retention credit which most of you have actually never heard of I definitely had not become aware of it till very just recently and learned a lot about it due to the fact that 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 have actually got the expert with me this is Josh Fox he’s the founder and CEO of bottom line Ideas 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 just call your bank manager and state offer 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 representative for this I enjoy this program it’s disappearing very 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 begin there so during the Trump Administration when President Trump was enacted they created the cares Act and the cares act used services three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone it makes a huge difference right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the money cash payroll tax refund fine go on sorry I simply need to make sure we got that point I indicate that’s a big difference a loan versus cash cash I like cash money that’s what we’re discussing okay 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 difficult check in the mail where you get actual cash from the IRS all right so let’s discuss how it works because it sounds like to me if it’s a if it’s employee retention credit that person had to be an employee so I’m going to make the Presumption this money is not for the owner not for individuals on the cap table not for investors it’s for employees right you had to have actually owned a business but it’s based on you having W-2 workers in America not 10.99. As long as you had W-2 staff members 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 right so there were six quarters the program was open well stroll us through the 6 quarters so you had quarters two three and four of 2020 and you had quarters one two and three of 2021. all right so that’s how it’s measured you have to be on the W-2 during that period now let’s talk my preferred part cash how much can you return per staff member that was on a W-2 in those six quarters so the computation in 2020 to be precise Kevin is 50 of the employee’s income to an optimum of 5 thousand dollars per staff member for the year of 2020 and in 2021 the numbers increased to 70 of the employee’s salary to a maximum of seven thousand per quarter how did that occur um they simply altered the rules in.
2021 versus since 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 as much as 5 thousand Max and then what occurs 21 000 Max in 2021 oh that’s how you come up with twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per staff member that is since that’s a lot of cash 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 decrease the 26 000 so what we’re seeing typically Kevin is if you took PPP cash somewhere around ten thousand dollars an individual so let’s say hypothetically you owned a dining establishment in New York City where I’m from and you had a hundred workers and you took PPP money you would still get a million dollar in the mail from the internal revenue service so it’s big certainly now the huge concern is why does no one know about this due to the fact that look when I first heard about this when I first fulfilled Josh you know I have actually got great deals of financial investments in lots of business I’m a significant supporter for entrepreneurship in America and make many numerous investments in entrepreneurs of which numerous suffered through the pandemic when I first heard about this I called BS I don’t think it because 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 and that were well should have and we utilized them carefully to survive throughout the pandemic so when I heard about this I stated nah it can’t be true but when I dug around I even called to my politician buddies Guv Senators they didn’t learn about it I imply that’s how you understand that’s how misinformation is that there’s no info out there then a lot of individuals told me well you can’t get it because you took the PPP also not true so let’s ask Josh why does nobody learn about the worker retention credit you understand what’s intriguing you’re discussing the banks Kevin since 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 nation and they would process procedure 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 turmoil because remember in the original cares act you could refrain from doing both programs so if you had done PPP you could not do ERC in the initial program and when they altered the law in 2021 the banks were refraining from doing ERC because 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 know how to do this not actually he or she’s never done it before 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 went into this organization and bottom line my firm Kevin has actually stayed in business considering that 2009 and we’ve 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 business 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 real estate tax all of these other government programs.
The worker retention tax credit is a broad based refundable tax credit designed to encourage.
employers to keep workers on their payroll. The credit is 50% of approximately $10,000 in wages paid by an.
Because of COVID-19 or whose gross invoices, company whose organization is completely or partially suspended.
decline by more than 50%.
Accessibility.
1. The credit is available to all companies despite size consisting of tax exempt organizations. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) small.
businesses who take Small Business Loans.
2. To certify, the employer needs to satisfy one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s company is completely or partly suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross invoices are below 50% of the comparable quarter in 2019. When the.
employer’s gross receipts go above 80% of a similar quarter in 2019 they no longer qualify.
after completion of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the qualifying wages paid up to $10,000 in total.
It is effective for earnings paid after March 13th and prior to December 31, 2020.
The meaning of certifying earnings varies by whether a company had, usually, more or less than.
100 staff members in 2019.
Business that specialize in ERC filing help typically provide proficiency and assistance to assist organizations browse the intricate procedure of claiming the credit. They can use different services, consisting of:.
How is the employee retention credit calculated? Do I Have To Pay Back The Employee Retention Credit
Eligibility Evaluation: These companies will assess your company’s eligibility for the ERC based on factors such as your market, income, and operations. If you meet the requirements for the credit and determine the optimum credit quantity you can claim, they can help identify.
Paperwork and Estimation: ERC filing services will help in gathering the necessary paperwork, such as payroll records and monetary statements, to support your claim. They will also assist determine the credit amount based on qualified incomes and other certifying costs.
Retroactive Claim Review: If you are eligible to declare the ERC for previous quarters, these business can review your previous payroll records and financials to recognize prospective opportunities for retroactive credits. They can assist you change prior tax returns to claim these refunds.
Filing Assistance: Business concentrating on ERC filings will prepare and submit the necessary forms and documents in your place. This consists of completing Form 941 or any other required tax forms.
Compliance and Updates: ERC policies and assistance have developed with time. These business stay upgraded with the current changes and make sure that your filings adhere to the most existing guidelines. They can also provide ongoing support if the internal revenue service demands additional info or carries out an audit related to your ERC claim.
It is very important to research study and veterinarian any business providing ERC filing help to ensure their reliability and know-how. Look for recognized firms with experience in tax and payroll services, or consider connecting to relied on accounting companies or tax experts who use ERC filing assistance.
Bear in mind that while these companies can supply valuable support, it’s constantly a good idea to have a fundamental understanding of the ERC requirements and process yourself. This will help you make informed decisions and guarantee accurate filings.
The Worker Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief steps. The objective of the ERC is to encourage organizations to maintain 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 offered to qualified companies, consisting of for-profit businesses, tax-exempt organizations, and certain governmental entities. To certify, companies should fulfill one of two requirements:.
Business operations were completely or partially suspended due to a federal government order related to COVID-19.
Business experienced a considerable decline in gross receipts. As pointed out earlier, for 2021, a substantial decline is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decline in gross invoices compared to the immediately preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit amount amounts to a percentage (approximately 70%) of certified incomes paid to workers, including specific health plan expenditures. The maximum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, services that got a Paycheck Protection Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 allows organizations to claim the ERC even if they got a PPP loan. The exact same salaries can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and enhanced, enabling qualified companies to declare the credit for certified wages paid as far back as March 13, 2020. This retroactive provision supplies an opportunity for companies to modify prior-year tax returns and get refunds.
Declaring the Credit: Employers can declare the ERC by reporting it on their work income tax return, generally Kind 941. The excess can be reimbursed to the employer if the credit goes beyond the amount of work taxes owed.
It’s important to note that the ERC arrangements and eligibility requirements have actually evolved in time. The best strategy is to consult with a tax expert or go to the official internal revenue service website for the most detailed and current information concerning the ERC, consisting of any recent legal changes or updates.
To qualify for the ERC, a company must satisfy one of the following requirements:.
Business operations were fully or partially suspended due to a federal government order related to COVID-19.
The business experienced a considerable decrease in gross receipts. For 2021, a considerable decline is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019, or a 20% decrease in gross invoices compared to the immediately preceding quarter.
The ERC is readily available to organizations of all sizes, consisting of tax-exempt companies, however there are some exceptions. Federal government entities and services that received a PPP loan may have restrictions on claiming the credit.
The procedure for declaring the ERC includes finishing the essential kinds and including the credit on your work tax return (typically Kind 941). The exact time it takes to process the credit can vary based on several elements, including the complexity of your service and the work of the IRS. It’s advised to talk to a tax professional for guidance particular to your situation.
There are several companies that can help with the procedure of claiming the ERC. Some popular business that offer support with ERC claims consist of 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 current updates or changes to the ERC. It is very important to speak with a tax expert or check out the official IRS website for the most precise and updated info relating to eligibility, declaring treatments, and offered help.
Less than 100. If the employer had 100 or fewer workers usually in 2019, then the credit is based.
on wages paid to all workers whether they actually worked or not. In other words, 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 company had more than 100 staff members usually in 2019, then the credit is.
permitted just for salaries paid to staff members who did not work during the calendar quarter.
In both cases, “incomes” consists of not just money payments but also a portion of the cost of employer.
offered health care. Do I Have To Pay Back The Employee Retention Credit
Payment.
Employers can be right away compensated for the credit by minimizing the amount of payroll taxes they.