Lets talk first about Do Tips Count Towards Employee Retention Credit :
Our group here what do these people doing everyone in this room is assisting teach individuals about ERC and uh always offer a lovely breakfast and have people really find out about the program we should head to the space where we are able to show some of the checks that we are getting for business and I want to see that what is this this is uh hundreds of countless dollars literally Kevin numerous millions of dollars so these are duplicate copies of the letters that go to clients confirming that the check is on the method I suggest you understand if you simply 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 imply it’s just I suggest 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 verified the numbers are confirmed and the check is on the mail in the mail from the IRS heading to the customer so that’s how you’re able to track it you know when you
get this you understand the check is opted for sure and that’s when they pay so they do not pay anything till they really receive the money they do not pay bottom line Wonder trust anything till this letter is confirmed the check is on the method they deposit it into their bank account and they can genuinely rely on Wonder trust that the process has been ended up and how many you believe you have actually 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 which’s what you need you require 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 really important today the staff member retention credit which most of you have never ever become aware of I certainly hadn’t become aware of it up until really recently and found out a lot about it due to the fact that this is probably the most affordable cost of capital for any small company anywhere
anytime if you have employees 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 difficult this isn’t like PPP we just contact your bank supervisor and state give 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 ended up being yes the Ambassador and paid spokesperson for this I like this program it’s going away very soon you got to discover all 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 created the cares Act and the cares act provided businesses 3 chances 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.
fix the cash money payroll tax refund okay go on sorry I just have to ensure we got that point I mean that’s a big difference a loan versus cash money I like money cash that’s what we’re talking 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 lovely difficult check in the mail where you get real money from the IRS 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 a staff member 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 employees right you had to have actually owned a business but 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 first 6 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 three and four of 2020 and you had quarters one 2 and three of 2021. fine 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 money just how much can you get back per staff member that was on a W-2 in those 6 quarters so the estimation in 2020 to be specific Kevin is 50 of the staff member’s salary to a maximum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the employee’s income to a maximum of 7 thousand per quarter how did that happen um they just altered the rules in.
2021 versus since the mayhem 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 up to five thousand Max and then what takes place 21 000 Max in 2021 oh that’s how you develop 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 great deal of money it is now there’s a caveat here the PPP cash 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 cash 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 cash you would still get a million dollar in the mail from the IRS so it’s huge clearly now the huge concern is why does no one know about this due to the fact that look when I initially found out about this when I first satisfied Josh you know I’ve got great deals of investments in great deals of companies I’m a significant supporter for entrepreneurship in America and make many many investments in business owners of which many suffered through the pandemic when I initially heard about this I called BS I don’t think it because I utilize the PPP we went through the money 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 carefully to stay alive throughout the pandemic so when I found out about this I said nah it can’t be true however when I dug around I even called to my politician friends Governor Senators they didn’t learn about it I mean that’s how you understand that’s how misinformation is that there’s no info out there then a bunch of individuals informed 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 learn about the employee retention credit you understand what’s intriguing you’re talking about 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 huge banks in our nation and they would process process 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 because keep in mind in the initial cares act you might refrain from doing both programs so if you had actually 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 due to the fact that it’s not alone so you’re getting a tax refund so the government never made it clear to anyone about how to.
do this does your CFO understand how to do this not truly she or he’s never ever done it before do the banks do it nope the banks do not do it the payroll business yeah some of them are doing it as a payroll business your accountant no your accounting professional’s never done this before unless you have an account that entered into this service and bottom line my company Kevin has been in business because 2009 and we’ve been dealing with the federal government and the state federal government to recover cash for Fortune 500 Fortune 1000 companies so a great deal of our big big business customers have actually worked with bottom line to recuperate other government programs we’ve done sales tax and utilize tax joblessness tax work chance 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 employees on their payroll. The credit is 50% of approximately $10,000 in salaries paid by an.
company whose company is completely or partially suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
1. The credit is offered to all companies despite size consisting of tax exempt companies. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) little.
services who take Small company Loans.
2. To certify, the employer needs to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s service is totally or partly suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are below 50% of the equivalent quarter in 2019. Once the.
company’s gross receipts go above 80% of a comparable quarter in 2019 they no longer qualify.
after completion of that quarter.
Computation of the Credit.
The quantity of the credit is 50% of the qualifying earnings paid up to $10,000 in overall.
It is effective for salaries paid after March 13th and before December 31, 2020.
The definition of qualifying earnings differs by whether a company had, typically, more or less than.
100 staff members in 2019.
Business that focus on ERC filing support generally offer know-how and support to help businesses navigate the complicated process of declaring the credit. They can use different services, including:.
How is the employee retention credit calculated? Do Tips Count Towards Employee Retention Credit
Eligibility Assessment: These business will assess your organization’s eligibility for the ERC based upon elements such as your industry, earnings, and operations. They can help identify if you satisfy the requirements for the credit and recognize the optimum credit amount you can declare.
Documentation and Computation: ERC filing services will assist in collecting the needed documentation, such as payroll records and financial statements, to support your claim. They will likewise help determine the credit amount based on qualified salaries and other qualifying expenditures.
Retroactive Claim Review: If you are eligible to declare the ERC for previous quarters, these companies can evaluate your previous payroll records and financials to recognize possible chances for retroactive credits. They can help you change previous tax returns to declare these refunds.
Filing Help: Business concentrating on ERC filings will prepare and send the essential types and paperwork in your place. This includes completing Form 941 or any other necessary tax return.
Compliance and Updates: ERC policies and assistance have developed in time. These business stay upgraded with the latest changes and guarantee that your filings comply with the most current standards. They can likewise offer ongoing support if the IRS demands extra information or conducts an audit related to your ERC claim.
It is essential to research study and veterinarian any company offering ERC filing assistance to ensure their credibility and competence. Look for recognized firms with experience in tax and payroll services, or consider connecting to relied on accounting companies or tax experts who provide ERC filing support.
Remember that while these companies can provide important support, it’s constantly a great idea to have a basic understanding of the ERC requirements and procedure yourself. This will assist you make informed decisions and guarantee accurate 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 organizations to maintain and pay their employees throughout the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to eligible companies, consisting of for-profit organizations, tax-exempt organizations, and particular governmental entities. To qualify, companies need to satisfy one of two criteria:.
Business operations were totally or partly suspended due to a government order related to COVID-19.
Business experienced a substantial decrease in gross receipts. As mentioned earlier, for 2021, a substantial decline is specified as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decline in gross invoices compared to the same quarter in 2019, or a 20% decline in gross invoices compared to the instantly 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 percentage (approximately 70%) of certified salaries paid to employees, consisting of certain health plan costs. The maximum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, businesses that got a Paycheck Protection Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 allows companies 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 Provision: The ERC has been retroactively broadened and boosted, allowing qualified employers to claim the credit for certified salaries paid as far back as March 13, 2020. This retroactive arrangement offers an opportunity for organizations to change prior-year income tax return and receive refunds.
Declaring the Credit: Employers can declare the ERC by reporting it on their work tax returns, usually Type 941. If the credit goes beyond the quantity of employment taxes owed, the excess can be reimbursed to the employer.
It’s important to note that the ERC arrangements and eligibility requirements have actually developed with time. The best course of action is to talk to a tax professional or check out the official IRS site for the most up-to-date and detailed details relating to the ERC, consisting of any current legislative modifications or updates.
To qualify for the ERC, a service must fulfill among the following criteria:.
Business operations were totally or partly suspended due to a government order related to COVID-19.
Business experienced a substantial decline in gross receipts. For 2021, a considerable decline is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
The ERC is readily available to services of all sizes, consisting of tax-exempt companies, however there are some exceptions. For instance, government entities and services that got a PPP loan might have restrictions on claiming the credit.
The procedure for claiming the ERC involves finishing the necessary kinds and including the credit on your employment income tax return (generally Type 941). The exact time it requires to process the credit can vary based on several elements, consisting of the complexity of your organization and the work of the IRS. It’s advised to seek advice from a tax expert for assistance particular to your circumstance.
There are numerous business that can assist with the process of declaring the ERC. These include accounting companies, tax advisory services, and payroll provider. Some popular companies that provide help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research and call these companies straight to ask about their fees and services.
Please note that the information offered here is based on general understanding and might not show the most recent updates or modifications to the ERC. It is very important to speak with a tax expert or visit the official IRS site for the most up-to-date and precise info relating to eligibility, declaring procedures, and available assistance.
Less than 100. The credit is based if the employer had 100 or fewer staff members on average in 2019.
on salaries paid to all workers whether they actually worked or not. Simply put, even if the.
employees 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.
enabled just for incomes paid to workers who did not work during the calendar quarter.
In both cases, “salaries” includes not simply cash payments but also a part of the cost of company.
provided healthcare. Do Tips Count Towards Employee Retention Credit
Employers can be right away reimbursed for the credit by reducing the amount of payroll taxes they.