Lets talk first about Due Date For Employee Retention Credit :
Our team here what do these guys doing everybody in this space is assisting teach people about ERC and uh always supply a gorgeous breakfast and have individuals really learn about the program we ought to head to the room where we are able to show some of the checks that we are getting for companies and I ‘d like to see that what is this this is uh numerous countless dollars literally Kevin numerous countless dollars so these are replicate copies of the letters that go to customers confirming that the check is on the way I suggest you understand if you just start to look at some of these here I imply this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I mean it’s just I indicate think about how many real customers 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 internal revenue service heading to the consumer so that’s how you have the ability to track it you know when you
get this you know the check is chosen sure and that’s when they pay so they do not pay anything up until they really get the money they don’t pay bottom line Wonder trust anything till this letter is verified the check is on the way they transfer it into their bank account and they can really trust Wonder trust that the process has been finished and the number of you believe you’ve processed given that you began this we’re about 35 000 of these for
about six billion dollars wow so plainly they know what they’re doing which’s what you need you need professionals 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 talking about something really essential today the staff member retention credit which most of you have actually never heard of I certainly hadn’t heard of it until very just recently and learned a lot about it due to the fact that this is probably the lowest cost of capital for any small company anywhere
anytime if you have workers between 5 and five hundred so I have actually got the specialist 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 manager 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 us all about it and how to get it and why I have actually ended up being yes the Ambassador and paid spokesperson for this I like this program it’s disappearing very 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 developed the cares Act and the cares act used businesses three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everybody it makes a huge distinction right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
fix the money money payroll tax refund okay go on sorry I simply have to ensure we got that point I mean that’s a big difference a loan versus cash money I like money money that’s what we’re talking about 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 lovely hard check in the mail where you get real money from the internal revenue service all right so let’s talk about how it works since it seems like to me if it’s a if it’s employee retention credit that person had to be a worker 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 service however it’s based upon you having W-2 employees 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 eligible so you have to be on payroll in 2020 on the W-2 and you need to be on payroll for the first 6 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 2 3 and four of 2020 and you had quarters one 2 and 3 of 2021. alright so that’s how it’s determined you need to be on the W-2 throughout that period now let’s talk my preferred part cash just how much can you get back per staff member that was on a W-2 in those six quarters so the calculation in 2020 to be precise Kevin is 50 of the employee’s wage to an optimum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the employee’s salary to an optimum of seven thousand per quarter how did that happen um they simply changed the rules in.
2021 versus because the chaos of the pandemic so they wished 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 up to five thousand Max and then what takes place 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 6 thousand dollars per worker that is because that’s a lot of money it is now there’s a caution 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 reduce the 26 000 so what we’re seeing usually Kevin is if you took PPP cash somewhere around 10 thousand dollars a person so let’s state hypothetically you owned a restaurant in New York 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 big undoubtedly now the huge question is why does no one understand about this because look when I first found out about this when I first satisfied Josh you know I have actually got lots of investments in great deals of companies I’m a significant supporter for entrepreneurship in America and make numerous lots of financial investments in business owners of which numerous suffered through the pandemic when I first became aware of this I called BS I don’t believe it because I use the PPP we went through the cash center Banks to get it it was really easy to do we had our CEOs call the banks they got their loans and that were well deserved and we used them sensibly to stay alive throughout the pandemic so when I became aware of this I stated nah it can’t be true however when I dug around I even contacted us to my political leader buddies Governor Senators they didn’t understand about it I imply that’s how you understand that’s how false information is that there’s no information out there then a lot of people informed me well you can’t get it because you took the PPP likewise not true so let’s ask Josh why does nobody understand about the staff member retention credit you understand what’s interesting you’re discussing the banks Kevin because in the PPP loan procedure the federal government made it very 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 simply procedure process that’s all um and here there was chaos due to the fact that keep in mind in the original cares act you could not do both programs so if you had done PPP you might 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 anyone about how to.
do this does your CFO know how to do this not really she or he’s never ever done it in the past do the banks do it nope the banks don’t do it the payroll companies yeah some of them are doing it as a payroll company your accountant no your accounting professional’s never done this before unless you have an account that went into this business and bottom line my firm Kevin has stayed in business given that 2009 and we have actually been working with the federal government and the state federal government to recuperate cash for Fortune 500 Fortune 1000 business so a great deal of our big big business clients have worked with bottom line to recuperate other government programs we have actually done sales tax and use tax joblessness tax work chance tax credits research and development tax credits unclaimed property real estate tax all of these other government programs.
The staff member retention tax credit is a broad based refundable tax credit designed to encourage.
companies to keep workers on their payroll. The credit is 50% of as much as $10,000 in incomes paid by an.
Because of COVID-19 or whose gross receipts, company whose organization is fully or partially suspended.
decrease by more than 50%.
1. The credit is available to all employers regardless of size including tax exempt organizations. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
businesses who take Small company Loans.
2. To certify, the employer has to satisfy one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s company is totally or partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the company’s gross receipts are below 50% of the comparable quarter in 2019. When the.
company’s gross receipts exceed 80% of an equivalent 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 certifying salaries paid up to $10,000 in overall.
It works for salaries paid after March 13th and prior to December 31, 2020.
The meaning of qualifying wages varies by whether a company had, on average, more or less than.
100 employees in 2019.
Companies that concentrate on ERC filing support usually supply competence and assistance to assist businesses browse the complex procedure of declaring the credit. They can use different services, consisting of:.
How is the employee retention credit calculated? Due Date For Employee Retention Credit
Eligibility Evaluation: These companies will examine your company’s eligibility for the ERC based upon aspects such as your industry, income, and operations. They can help identify if you fulfill the requirements for the credit and recognize the maximum credit amount you can claim.
Documentation and Computation: ERC filing services will assist in collecting the necessary documents, such as payroll records and monetary statements, to support your claim. They will likewise assist compute the credit amount based upon qualified wages and other certifying expenditures.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for prior quarters, these business can review your previous payroll records and financials to determine prospective opportunities for retroactive credits. They can assist you change previous tax returns to claim these refunds.
Filing Assistance: Companies concentrating on ERC filings will prepare and submit the essential kinds and documents on your behalf. This consists of finishing Form 941 or any other required tax forms.
Compliance and Updates: ERC policies and guidance have progressed with time. These companies remain updated with the current modifications and make sure that your filings comply with the most current standards. They can also offer continuous assistance if the internal revenue service demands extra details or carries out an audit related to your ERC claim.
It is necessary to research and veterinarian any company using ERC filing assistance to ensure their reliability and expertise. Look for recognized firms with experience in tax and payroll services, or consider reaching out to trusted accounting firms or tax professionals who offer ERC submitting support.
Bear in mind that while these business can provide important support, it’s always a great idea to have a basic understanding of the ERC requirements and process yourself. This will assist you make notified choices and ensure accurate filings.
The Staff Member 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 motivate companies to retain and pay their staff members throughout the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to eligible employers, consisting of for-profit organizations, tax-exempt companies, and specific governmental entities. To certify, companies need to meet one of two criteria:.
The business operations were totally or partly suspended due to a federal government order related to COVID-19.
Business experienced a considerable decline in gross receipts. As pointed out previously, for 2021, a substantial decline is specified as a 20% decline 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 receipts compared to the very same quarter in 2019, or a 20% decline 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 amounts to a percentage (up to 70%) of qualified earnings paid to workers, consisting of specific health insurance expenditures. The maximum credit per staff member is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, organizations that got an Income Defense Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 allows businesses to declare the ERC even if they got a PPP loan. The same salaries can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and boosted, enabling eligible companies to claim the credit for qualified earnings paid as far back as March 13, 2020. This retroactive provision supplies a chance for companies to amend prior-year income tax return and receive refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their work tax returns, usually Form 941. If the credit exceeds the quantity of employment taxes owed, the excess can be refunded to the employer.
It is necessary to note that the ERC arrangements and eligibility requirements have actually developed with time. The very best course of action is to consult with a tax expert or check out the main internal revenue service site for the most detailed and current details regarding the ERC, consisting of any current legislative changes or updates.
To receive the ERC, a business must fulfill one of the following requirements:.
The business operations were totally or partially suspended due to a government order related to COVID-19.
The business experienced a substantial decline in gross invoices. For 2021, a substantial decline is specified as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
The ERC is offered to organizations of all sizes, consisting of tax-exempt organizations, however there are some exceptions. For example, federal government entities and businesses that received a PPP loan may have restrictions on claiming the credit.
The process for claiming the ERC includes completing the required forms and consisting of the credit on your employment tax return (usually Form 941). The exact time it takes to process the credit can differ based upon numerous aspects, consisting of the intricacy of your company and the workload of the internal revenue service. It’s advised to seek advice from a tax professional for assistance particular to your circumstance.
There are several business that can assist with the process of claiming the ERC. These consist of accounting firms, tax advisory services, and payroll company. Some widely known companies that provide assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research and contact these companies straight to inquire about their services and costs.
Please keep in mind that the details supplied here is based on general knowledge and might not show the most recent updates or changes to the ERC. It’s important to seek advice from a tax expert or visit the main IRS site for the most up-to-date and accurate information regarding eligibility, declaring procedures, and available support.
Less than 100. If the employer had 100 or less workers typically in 2019, then the credit is based.
on wages paid to all staff members whether they really worked or not. In other words, even if the.
workers worked full time and earned money for full time work, the employer still gets the credit.
Greater than 100. The credit is if the company had more than 100 employees on average in 2019.
enabled only for incomes paid to employees who did not work during the calendar quarter.
In both cases, “incomes” consists of not just money payments but likewise a portion of the cost of company.
offered health care. Due Date For Employee Retention Credit
Companies can be immediately compensated for the credit by reducing the amount of payroll taxes they.