Lets talk first about Employee Retention Credit Attribution Rules :
Our team here what do these people doing everybody in this room is helping teach individuals about ERC and uh constantly provide a lovely breakfast and have people actually learn more about the program we should head to the space where we have the ability to display 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 actually Kevin numerous countless dollars so these are duplicate copies of the letters that go to clients confirming that the check is on the way I imply you know if you just start to look at a few 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 simply I suggest think about how many real clients that went through the program yeah this is the very end this is the celebration at the end when the check is validated the numbers are verified and the check is on the mail in the mail from the internal revenue service heading to the consumer so that’s how you’re able to track it you know when you
receive this you know the check is opted for sure and that’s when they pay so they do not pay anything until they really get the money they don’t pay bottom line Wonder trust anything up until this letter is verified the check is on the method they deposit it into their savings account and they can really trust Wonder trust that the procedure has actually been finished and the number of you believe you’ve processed considering that 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 specialists 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 discussing something really crucial today the employee retention credit which the majority of you have actually never become aware of I certainly hadn’t heard of it until really recently and found out a lot about it since this is most likely the lowest expense of capital for any small company anywhere
anytime if you have staff members between 5 and five hundred so I have actually got the professional with me this is Josh Fox he’s the creator and CEO of bottom line Principles 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 contact your bank supervisor 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 us all about it and how to get it and why I’ve ended up being yes the Ambassador and paid spokesperson for this I enjoy this program it’s going away soon you got to learn everything about it let’s talk employee retention credit Josh Fox what is an ERC let’s just begin there so throughout the Trump Administration when President Trump was enacted they developed the cares Act and the cares act offered organizations 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody it makes a big difference right there two 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 ensure we got that point I imply that’s a big distinction 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 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 IRS all right so let’s speak about how it works since it sounds like to me if it’s a if it’s worker retention credit that person had to be an employee so I’m going to make the Assumption this money is not for the owner not for people on the cap table not for shareholders it’s for workers right you had 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 staff members 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 have to be on payroll for the first 6 months of 2021 on the W-2 appropriate so there were 6 quarters the program was open well walk us through the 6 quarters so you had quarters 2 three and four of 2020 and you had quarters one 2 and 3 of 2021. okay so that’s how it’s determined you need to be on the W-2 throughout that duration now let’s talk my preferred part cash how much can you get back per worker that was on a W-2 in those 6 quarters so the computation in 2020 to be exact Kevin is 50 of the worker’s income 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 worker’s wage to a maximum of 7 thousand per quarter how did that happen um they just changed the rules in.
2021 versus since the turmoil 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 5 thousand Max and then what happens 21 000 Max in 2021 oh that’s how you create twenty 6 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 because that’s a lot of money it is now there’s a caveat here the PPP cash would need to be reduced 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 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 City where I’m from and you had a hundred workers and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s huge clearly now the big concern is why does nobody understand about this because appearance when I initially heard about this when I first fulfilled Josh you know I’ve got great deals of financial investments in lots of business I’m a significant advocate for entrepreneurship in America and make many lots of financial investments in business owners of which many suffered through the pandemic when I initially became aware of this I called BS I don’t think it due to the fact that 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 which were well been worthy of and we utilized them sensibly to survive during the pandemic so when I heard about this I said nah it can’t be true but when I dug around I even contacted us to my political leader buddies Guv Senators they didn’t learn about it I indicate that’s how you understand that’s how false information is that there’s no info out there then a bunch of individuals told me well you can’t get it because you took the PPP likewise not real so let’s ask Josh why does no one know about the employee retention credit you understand what’s interesting you’re speaking about the banks Kevin because in the PPP loan procedure the federal government made it really clear that if you wanted a PPP loan you would call Wells Fargo Citibank Bank of America any of the huge banks in our country and they would process process in Canada a pre-pp loan there’s no loans in Canada by the way it’s just process process that’s all um and here there was chaos because keep in mind in the initial cares act you could not do both programs so if you had actually done PPP you could not do ERC in the initial program and when they altered the law in 2021 the banks were not doing ERC due to the fact that it’s not alone so you’re getting a tax refund so the federal government never made it clear to any person about how to.
do this does your CFO understand how to do this not truly he or she’s never done it before do the banks do it nope the banks do not 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 entered into this company and bottom line my company Kevin has actually been in business since 2009 and we have actually been working with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 business so a lot of our huge big business clients have actually dealt with bottom line to recuperate other federal government programs we have actually done sales tax and use tax joblessness tax work opportunity 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 created to motivate.
employers to keep employees on their payroll. The credit is 50% of as much as $10,000 in wages paid by an.
Since of COVID-19 or whose gross receipts, company whose company is totally or partially suspended.
decline by more than 50%.
1. The credit is readily available to all companies regardless of size including 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 qualify, the employer has to satisfy one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s service is completely or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross receipts are listed below 50% of the comparable quarter in 2019. Once the.
employer’s gross invoices exceed 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 salaries paid up to $10,000 in total.
It is effective for wages paid after March 13th and before December 31, 2020.
The meaning of qualifying salaries varies by whether a company had, on average, basically than.
100 employees in 2019.
Business that specialize in ERC filing support generally provide expertise and assistance to help services browse the complicated process of claiming the credit. They can use various services, including:.
How is the employee retention credit calculated? Employee Retention Credit Attribution Rules
Eligibility Evaluation: These companies will assess your service’s eligibility for the ERC based upon aspects such as your market, profits, and operations. If you fulfill the requirements for the credit and identify the optimum credit quantity you can claim, they can assist identify.
Paperwork and Calculation: ERC filing services will help in collecting the required paperwork, such as payroll records and monetary statements, to support your claim. They will also help compute the credit amount based upon qualified wages and other qualifying costs.
Retroactive Claim Evaluation: If you are eligible to claim the ERC for prior quarters, these companies can review your previous payroll records and financials to recognize potential opportunities for retroactive credits. They can assist you modify previous tax returns to declare these refunds.
Filing Support: Business focusing on ERC filings will prepare and send the necessary kinds and documentation in your place. This consists of finishing Form 941 or any other necessary tax return.
Compliance and Updates: ERC guidelines and assistance have evolved in time. These companies remain updated with the current changes and ensure that your filings abide by the most existing guidelines. If the IRS demands extra info or performs an audit related to your ERC claim, they can likewise supply continuous support.
It is essential to research study and vet any company providing ERC filing help to ensure their credibility and know-how. Try to find established firms with experience in tax and payroll services, or think about connecting to relied on accounting firms or tax experts who provide ERC submitting assistance.
Keep in mind that while these business can supply important support, it’s constantly a great idea to have a fundamental understanding of the ERC requirements and process yourself. This will help you make notified decisions and ensure accurate filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief procedures. The objective of the ERC is to motivate companies to maintain and pay their employees throughout the pandemic, even if their operations have been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to qualified employers, consisting of for-profit organizations, tax-exempt organizations, and specific governmental entities. To qualify, companies must meet one of two requirements:.
Business operations were fully or partially suspended due to a government order related to COVID-19.
The business experienced a significant decrease in gross receipts. As mentioned earlier, 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 considerable decline is defined as a 20% decline in gross invoices compared to the very same quarter in 2019, or a 20% decline in gross receipts compared to the instantly preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount is equal to a percentage (up to 70%) of qualified salaries paid to employees, including specific health plan 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, services that received an Income Protection Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 enables businesses to claim the ERC even if they received a PPP loan. The exact same earnings can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and improved, allowing eligible employers to claim the credit for certified salaries paid as far back as March 13, 2020. This retroactive provision provides a chance for organizations to amend prior-year income tax return and get refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their employment income tax return, generally Kind 941. The excess can be refunded to the employer if the credit goes beyond the amount of work taxes owed.
It is essential to keep in mind that the ERC provisions and eligibility criteria have actually evolved gradually. The very best course of action is to consult with a tax professional or visit the main internal revenue service site for the most current and in-depth information regarding the ERC, including any recent legal changes or updates.
To receive the ERC, a company must satisfy 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 considerable decrease is specified as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decrease is specified as a 20% decline in gross receipts compared to the exact same quarter in 2019, or a 20% decline in gross receipts compared to the right away preceding quarter.
The ERC is offered to services of all sizes, including tax-exempt companies, but there are some exceptions. Government entities and services that received a PPP loan might have constraints on declaring the credit.
The procedure for claiming the ERC involves finishing the needed types and consisting of the credit on your employment income tax return (typically Kind 941). The exact time it requires to process the credit can vary based upon numerous aspects, including the complexity of your business and the workload of the IRS. It’s suggested to speak with a tax expert for assistance specific to your circumstance.
There are several companies that can help with the procedure of claiming the ERC. Some widely known business that use support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the details offered here is based upon basic knowledge and may not reflect the most current updates or modifications to the ERC. It is necessary to consult with a tax expert or check out the main IRS site for the most accurate and up-to-date details regarding eligibility, claiming procedures, and available support.
Less than 100. The credit is based if the employer had 100 or fewer employees on average in 2019.
on wages paid to all workers whether they in fact worked or not. To put it simply, even if the.
employees worked full-time and got paid for full-time work, the employer still gets the credit.
Greater than 100. The credit is if the employer had more than 100 employees on average in 2019.
enabled just for wages paid to staff members who did not work during the calendar quarter.
In both cases, “salaries” consists of not just cash payments but also a portion of the cost of employer.
supplied healthcare. Employee Retention Credit Attribution Rules
Companies can be immediately compensated for the credit by decreasing the amount of payroll taxes they.