Lets talk first about Eligible For Employee Retention Credit :
Our team here what do these people doing everybody in this space is helping teach people about ERC and uh constantly supply a lovely breakfast and have individuals truly learn more about the program we must head to the room where we are able to show some of the checks that we are getting for companies and I want to see that what is this this is uh numerous millions of dollars actually Kevin hundreds of millions of dollars so these are duplicate copies of the letters that go to customers validating that the check is on the method 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 indicate think of the number of actual 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 verified and the check is on the mail in the mail from the IRS heading to the client so that’s how you have the ability to track it you know when you
receive this you understand the check is chosen sure and that’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 confirmed the check is on the way they transfer it into their savings account and they can really trust Wonder trust that the process has been ended up and how many you think you’ve processed considering that you started this we’re about 35 000 of these for
about 6 billion dollars wow so plainly they know what they’re doing which’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 Wonderful here you’re at my YouTube channel we’re discussing something truly important today the employee retention credit which most of you have actually never ever become aware of I certainly hadn’t become aware of it till extremely recently and discovered a lot about it due to the fact that this is most likely the lowest expense of capital for any small business anywhere
anytime if you have workers between 5 and five hundred so I’ve 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 challenging this isn’t like PPP we simply call your bank manager and state provide 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 disappearing very soon you got to find out all about it let’s talk worker retention credit Josh Fox what is an ERC let’s just begin there so during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act provided organizations 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everybody it makes a big difference right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the cash cash payroll tax refund okay go on sorry I just need to make sure we got that point I imply that’s a huge distinction a loan versus money cash I like cash cash that’s what we’re speaking about 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 real money from the IRS all right so let’s talk about how it works since it sounds like to me if it’s a if it’s employee retention credit that individual had to be a worker so I’m going to make the Assumption this money is not for the owner not for individuals on the cap table not for investors it’s for workers right you needed to have actually owned a service however it’s based on 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 need to be on payroll in 2020 on the W-2 and you need to be on payroll for the very first 6 months of 2021 on the W-2 right so there were 6 quarters the program was open well walk 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 need to be on the W-2 during that duration now let’s talk my favorite part money 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 exact Kevin is 50 of the staff member’s salary to a maximum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the employee’s income to an optimum of seven thousand per quarter how did that occur um they just changed the rules in.
2021 versus because the mayhem of the pandemic so they wanted 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 approximately 5 thousand Max and then what happens 21 000 Max in 2021 oh that’s how you develop twenty 6 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 caveat here the PPP cash would have to be minimized 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 on average Kevin is if you took PPP money someplace around ten 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 employees and you took PPP money you would still get a million dollar in the mail from the IRS so it’s substantial undoubtedly now the huge question is why does no one understand about this due to the fact that look when I first heard about this when I first met Josh you understand I have actually got lots of investments in lots of companies I’m a major advocate for entrepreneurship in America and make many lots of financial investments in entrepreneurs of which numerous suffered through the pandemic when I initially found out about this I called BS I don’t believe it since I use 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 should have and we used them wisely to survive during the pandemic so when I found out about this I stated nah it can’t hold true but when I dug around I even called to my political leader friends Guv Senators they didn’t learn about it I imply that’s how you know that’s how misinformation is that there’s no details out there then a bunch of people told me well you can’t get it because you took the PPP also not real so let’s ask Josh why does no one learn about the staff member retention credit you know what’s interesting 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 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 procedure that’s all um and here there was chaos due to the fact that remember in the initial cares act you could refrain from doing both programs so if you had actually done PPP you might 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 ever made it clear to any person about how to.
do this does your CFO know how to do this not truly 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 a few of them are doing it as a payroll business your accountant no your accounting professional’s never ever done this prior to unless you have an account that went into this organization and bottom line my firm Kevin has stayed in business given that 2009 and we’ve been dealing with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 business so a lot of our big big business clients have dealt with bottom line to recuperate other federal government programs we have actually done sales tax and utilize tax joblessness tax work opportunity tax credits research and development tax credits unclaimed home real estate tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit created to motivate.
employers to keep workers on their payroll. The credit is 50% of up to $10,000 in salaries paid by an.
company whose organization is completely or partly suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
1. The credit is readily available to all employers regardless of size including tax exempt companies. There are.
just 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
companies who take Small company Loans.
2. To certify, the company needs to meet 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.
throughout the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the similar quarter in 2019. Once the.
company’s gross receipts go above 80% of an equivalent quarter in 2019 they no longer qualify.
after the end of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the qualifying earnings paid up to $10,000 in overall.
It works for earnings paid after March 13th and prior to December 31, 2020.
The meaning of qualifying earnings differs by whether an employer had, usually, more or less than.
100 staff members in 2019.
Companies that concentrate on ERC filing assistance normally provide proficiency and assistance to help services navigate the complex process of declaring the credit. They can use numerous services, consisting of:.
How is the employee retention credit calculated? Eligible For Employee Retention Credit
Eligibility Assessment: These business will evaluate your organization’s eligibility for the ERC based upon aspects such as your market, income, and operations. They can help determine if you fulfill the requirements for the credit and determine the optimum credit amount you can claim.
Paperwork and Computation: ERC filing services will help in gathering the needed paperwork, such as payroll records and financial declarations, to support your claim. They will likewise help compute the credit amount based on eligible earnings and other certifying costs.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for previous quarters, these companies can review your previous payroll records and financials to identify possible chances for retroactive credits. They can help you modify previous income tax return to declare these refunds.
Filing Assistance: Business specializing in ERC filings will prepare and send the necessary types and documentation on your behalf. This includes completing Kind 941 or any other necessary tax return.
Compliance and Updates: ERC regulations and assistance have progressed with time. These companies remain upgraded with the most recent changes and make sure that your filings abide by the most current standards. If the Internal revenue service requests additional information or conducts an audit related to your ERC claim, they can likewise provide ongoing support.
It’s important to research study and veterinarian any business providing ERC filing support to guarantee their reliability and know-how. Search for established companies with experience in tax and payroll services, or consider connecting to relied on accounting firms or tax specialists who use ERC submitting assistance.
Keep in mind that while these companies can supply valuable help, it’s constantly a good idea to have a fundamental understanding of the ERC requirements and process yourself. This will help you make informed choices and make sure precise 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 encourage organizations to retain and pay their employees during the pandemic, even if their operations have been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to qualified companies, consisting of for-profit businesses, tax-exempt companies, and particular governmental entities. To qualify, companies need to fulfill one of two criteria:.
The business operations were totally or partially suspended due to a federal government order related to COVID-19.
Business experienced a considerable decrease in gross receipts. As pointed out earlier, for 2021, a substantial decline is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a substantial decline is specified as a 20% decrease 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 company’s share of Social Security taxes. The credit quantity amounts to a percentage (up to 70%) of certified earnings paid to employees, including particular health plan expenses. The optimum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, businesses that received an Income Defense Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 permits services to claim the ERC even if they received a PPP loan. The exact same wages can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively broadened and enhanced, allowing qualified companies to declare the credit for certified wages paid as far back as March 13, 2020. This retroactive provision supplies a chance for businesses to amend prior-year income tax return and get refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their employment tax returns, generally Type 941. If the credit goes beyond the amount of employment taxes owed, the excess can be reimbursed to the employer.
It is essential to keep in mind that the ERC arrangements and eligibility criteria have actually evolved with time. The best strategy is to speak with a tax professional or check out the official internal revenue service site for the most comprehensive and up-to-date info regarding the ERC, consisting of any current legal changes or updates.
To qualify for the ERC, a business needs to fulfill one of the following criteria:.
The business operations were fully or partly suspended due to a federal government order related to COVID-19.
Business experienced a significant decrease in gross invoices. For 2021, a significant decrease is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a substantial decline is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019, or a 20% decline in gross receipts compared to the right away preceding quarter.
The ERC is readily available to companies of all sizes, consisting of tax-exempt companies, however there are some exceptions. Federal government entities and businesses that received a PPP loan may have limitations on claiming the credit.
The procedure for claiming the ERC includes completing the needed types and including the credit on your employment income tax return (typically Kind 941). The exact time it requires to process the credit can differ based upon a number of elements, consisting of the complexity of your service and the work of the IRS. It’s recommended to speak with a tax expert for guidance particular to your scenario.
There are a number of companies that can help with the process of declaring the ERC. Some well-known companies that use support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the info supplied here is based on basic understanding and may not show the most recent updates or changes to the ERC. It is essential to consult with a tax expert or check out the official IRS website for the most up-to-date and precise info concerning eligibility, claiming procedures, and offered support.
Less than 100. If the employer had 100 or fewer workers on average in 2019, then the credit is based.
on wages paid to all staff members whether they in fact worked or not. Simply put, even if the.
workers worked full-time and earned money for full time work, the employer still gets the credit.
Greater than 100. If the employer had more than 100 employees usually in 2019, then the credit is.
permitted only for earnings paid to staff members who did not work during the calendar quarter.
In both cases, “wages” includes not just money payments however likewise a portion of the cost of employer.
provided health care. Eligible For Employee Retention Credit
Employers can be immediately reimbursed for the credit by reducing the quantity of payroll taxes they.