Lets talk first about Eligibility For Employee Retention Credit :
Our group here what do these people doing everybody in this room is helping teach individuals about ERC and uh always supply a beautiful breakfast and have people truly learn more about the program we must head to the space where we are able to display a few of the checks that we are getting for business and I wish to see that what is this this is uh hundreds of millions of dollars literally Kevin numerous countless dollars so these are duplicate copies of the letters that go to customers confirming that the check is on the method I mean you understand 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 indicate it’s just I indicate think about how many actual customers that went through the program yeah this is the very end this is the celebration at the end when the check is confirmed the numbers are confirmed 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 know the check is chosen sure which’s when they pay so they don’t pay anything 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 checking account and they can truly trust Wonder trust that the procedure has actually been finished and how many you believe you’ve processed because you began this we’re about 35 000 of these for
about six billion dollars wow so plainly they understand what they’re doing and that’s what you require you need professionals 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 speaking about something actually crucial today the employee retention credit which most of you have never ever heard of I certainly hadn’t become aware of it till really recently and found out 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 employees between five and five hundred so I have actually got the professional 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 hard this isn’t like PPP we simply contact your bank supervisor and say 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 have actually ended up being yes the Ambassador and paid representative for this I like this program it’s going away soon you got to discover everything about it let’s talk worker retention credit Josh Fox what is an ERC let’s simply begin there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act provided companies three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly 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 cash money payroll tax refund fine go on sorry I just need to make sure we got that point I mean that’s a huge difference a loan versus money money I like cash money that’s what we’re discussing fine 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 gorgeous hard check in the mail where you get actual cash from the IRS all right so let’s speak about how it works because it seems like to me if it’s a if it’s employee retention credit that person had 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 shareholders it’s for staff members right you had to have actually owned a company however it’s based on 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 eligible so you have to be on payroll in 2020 on the W-2 and you need to be on payroll for the very 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 three and four of 2020 and you had quarters one two 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 favorite part cash just how much can you return per worker that was on a W-2 in those six quarters so the computation in 2020 to be specific Kevin is 50 of the employee’s income to a maximum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the employee’s salary to an optimum of 7 thousand per quarter how did that take place um they simply changed the rules in.
2021 versus since the chaos of the pandemic so they wished to even get more to keep those workers 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 occurs 21 000 Max in 2021 oh that’s how you develop 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 lot of money it is now there’s a caution here the PPP money would need to be lowered from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would minimize the 26 000 so what we’re seeing on average Kevin is if you took PPP money somewhere around 10 thousand dollars an individual so let’s state hypothetically you owned a dining establishment in New york city 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 IRS so it’s huge undoubtedly now the big concern is why does no one understand about this because look when I first heard about this when I first fulfilled Josh you understand I’ve got lots of investments in lots of business I’m a major advocate for entrepreneurship in America and make lots of many investments in business owners of which lots of suffered through the pandemic when I first found out about this I called BS I do not believe it due to the fact that 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 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 politician buddies Guv Senators they didn’t understand about it I imply that’s how you understand that’s how false information is that there’s no details out there then a bunch of people informed me well you can’t get it due to the fact that you took the PPP likewise not real so let’s ask Josh why does nobody know about the employee retention credit you know what’s intriguing you’re discussing 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 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 chaos since keep in mind in the original cares act you could refrain from doing 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 not doing ERC since it’s not alone so you’re getting a tax refund so the 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 ever done it in the past do the banks do it nope the banks do not do it the payroll business yeah a few of them are doing it as a payroll company your accounting professional no your accounting professional’s never ever done this before unless you have an account that went into this service and bottom line my firm Kevin has been in business since 2009 and we have actually been working with the federal government and the state government to recuperate money for Fortune 500 Fortune 1000 companies so a lot of our huge big business customers have actually dealt with bottom line to recover other federal 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 federal government programs.
The staff member retention tax credit is a broad based refundable tax credit developed to motivate.
companies to keep workers on their payroll. The credit is 50% of as much as $10,000 in earnings paid by an.
company whose service is completely or partly suspended because of COVID-19 or whose gross invoices.
decrease by more than 50%.
1. The credit is offered to all companies regardless of size including tax exempt companies. There are.
just 2 exceptions: (1) state and city governments and their instrumentalities and (2) little.
companies who take Small Business 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 business is totally or partially suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross invoices are below 50% of the similar quarter in 2019. Once the.
employer’s gross invoices go above 80% of a similar quarter in 2019 they no longer qualify.
after completion of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the certifying earnings 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 wages differs by whether a company had, on average, more or less than.
100 employees in 2019.
Companies that concentrate on ERC filing assistance generally offer proficiency and assistance to help organizations browse the complicated process of claiming the credit. They can offer numerous services, including:.
How is the employee retention credit calculated? Eligibility For Employee Retention Credit
Eligibility Assessment: These companies will assess your organization’s eligibility for the ERC based on factors such as your industry, earnings, and operations. If you meet the requirements for the credit and identify the optimum credit amount you can declare, they can assist identify.
Documentation and Computation: ERC filing services will help in collecting the needed paperwork, such as payroll records and monetary declarations, to support your claim. They will also help calculate the credit amount based upon qualified wages and other certifying costs.
Retroactive Claim Review: If you are qualified to declare the ERC for prior quarters, these companies can evaluate your past payroll records and financials to recognize potential chances for retroactive credits. They can help you amend previous income tax return to declare these refunds.
Filing Assistance: Companies focusing on ERC filings will prepare and submit the required kinds and paperwork in your place. This consists of completing Kind 941 or any other required tax return.
Compliance and Updates: ERC regulations and assistance have actually developed in time. These business remain upgraded with the most recent modifications and guarantee that your filings abide by the most present guidelines. They can also supply continuous assistance if the IRS requests additional information or performs an audit related to your ERC claim.
It is necessary to research and veterinarian any business providing ERC filing support to ensure their trustworthiness and proficiency. Look for recognized firms with experience in tax and payroll services, or think about connecting to relied on accounting firms or tax professionals who offer ERC submitting assistance.
Keep in mind that while these companies can offer valuable support, it’s always a good idea to have a standard understanding of the ERC requirements and process yourself. This will assist you make informed choices and make sure 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 motivate businesses to keep and pay their employees throughout the pandemic, even if their operations have been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to eligible employers, consisting of for-profit services, tax-exempt companies, and specific governmental entities. To qualify, companies should meet one of two criteria:.
The business operations were completely or partially suspended due to a federal government order related to COVID-19.
The business experienced a substantial decrease in gross invoices. As discussed previously, for 2021, a considerable decline is specified as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decrease 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 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 (as much as 70%) of certified wages paid to employees, including certain health plan expenditures. The optimum credit per worker 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 Defense Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 enables services to declare the ERC even if they got a PPP loan. The exact same incomes can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and enhanced, allowing qualified employers to declare the credit for certified incomes paid as far back as March 13, 2020. This retroactive provision offers an opportunity for organizations to amend prior-year income tax return and get refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their work income tax return, generally Type 941. If the credit exceeds the quantity of work taxes owed, the excess can be reimbursed to the company.
It is necessary to keep in mind that the ERC arrangements and eligibility criteria have developed over time. The very best course of action is to seek advice from a tax professional or go to the official internal revenue service website for the most up-to-date and in-depth info concerning the ERC, including any recent legislative changes or updates.
To receive the ERC, an organization should satisfy among the following requirements:.
The business operations were completely or partly suspended due to a government order related to COVID-19.
The business experienced a substantial decrease in gross invoices. For 2021, a considerable decrease is specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decrease is defined 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 instantly preceding quarter.
The ERC is readily available to businesses of all sizes, including tax-exempt organizations, but there are some exceptions. For instance, government entities and organizations that received a PPP loan might have restrictions on declaring the credit.
The procedure for declaring the ERC includes finishing the needed kinds and consisting of the credit on your employment tax return (usually Kind 941). The exact time it takes to process the credit can vary based upon several elements, including the complexity of your service and the workload of the internal revenue service. It’s recommended to speak with a tax professional for assistance particular to your scenario.
There are a number of business that can help with the procedure of claiming the ERC. These consist of accounting companies, tax advisory services, and payroll provider. Some widely known companies that provide assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research and call these business directly to inquire about their services and costs.
Please keep in mind that the info offered here is based on general knowledge and might not show the most current updates or modifications to the ERC. It is very important to seek advice from a tax expert or go to the official internal revenue service site for the most accurate and up-to-date info relating to eligibility, claiming procedures, and readily available assistance.
Less than 100. The credit is based if the employer had 100 or less workers on average in 2019.
on salaries paid to all workers whether they really worked or not. To put it simply, even if the.
employees worked full time and got paid for full time work, the company still gets the credit.
Greater than 100. The credit is if the employer had more than 100 workers on average in 2019.
permitted only for incomes paid to employees who did not work during the calendar quarter.
In both cases, “wages” consists of not simply cash payments however also a part of the cost of employer.
supplied healthcare. Eligibility For Employee Retention Credit
Companies can be right away compensated for the credit by lowering the quantity of payroll taxes they.