Lets talk first about Employee Retention Credit Cheat Sheet :
Our team here what do these people doing everybody in this room is assisting teach individuals about ERC and uh always provide a lovely breakfast and have people actually learn about the program we should head to the room 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 countless dollars literally Kevin numerous countless dollars so these are duplicate copies of the letters that go to clients verifying that the check is on the method I imply you know if you simply start to take a look at some of these here I mean this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s just I mean consider 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 confirmed the numbers are confirmed and the check is on the mail in the mail from the IRS heading to the client so that’s how you’re able to track it you understand when you
get this you understand the check is chosen sure and that’s when they pay so they do not pay anything till they actually get the cash they do not pay bottom line Wonder trust anything up until this letter is verified the check is on the way they transfer it into their bank account and they can genuinely rely on Wonder trust that the procedure has been completed and the number of you think you’ve processed because you started this we have to do with 35 000 of these for
about 6 billion dollars wow so plainly they understand 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 Fantastic here you’re at my YouTube channel we’re talking about something actually important today the worker retention credit which the majority of you have never ever heard of I certainly had not heard of it till really recently and learned a lot about it because this is most likely the lowest cost of capital for any small company anywhere
anytime if you have employees 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 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 call 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 tell all of us about it and how to get it and why I have actually become yes the Ambassador and paid spokesperson for this I like this program it’s disappearing very soon you got to find out everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just start there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act used companies 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody it makes a big distinction right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the money cash payroll tax refund all right go on sorry I simply have to ensure we got that point I imply that’s a huge difference a loan versus money money I like cash cash that’s what we’re speaking about okay 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 gorgeous hard check in the mail where you get real money from the IRS all right so let’s discuss how it works because it seems like to me if it’s a if it’s employee retention credit that individual 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 investors it’s for employees right you needed to have owned a business but it’s based on you having W-2 workers in America not 10.99. As long as you had W-2 staff members and you paid federal payroll taxes that’s why you would be qualified so you have to be on payroll in 2020 on the W-2 and you have to be on payroll for the very first six months of 2021 on the W-2 appropriate so there were 6 quarters the program was open well stroll us through the 6 quarters so you had quarters 2 three and 4 of 2020 and you had quarters one two and three of 2021. okay so that’s how it’s measured 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 estimation in 2020 to be precise Kevin is 50 of the worker’s salary to an optimum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the employee’s wage to a maximum of seven thousand per quarter how did that occur um they simply changed the rules in.
2021 versus because 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 as much as 5 thousand Max and after that what takes place 21 000 Max in 2021 oh that’s how you create twenty 6 thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty six thousand dollars per worker that is since that’s a great deal of cash it is now there’s a caveat here the PPP money would need to be decreased from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would reduce the 26 000 so what we’re seeing usually Kevin is if you took PPP cash someplace around 10 thousand dollars a person so let’s state hypothetically you owned a restaurant 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 big clearly now the huge concern is why does nobody learn 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 financial investments in lots of business I’m a major advocate for entrepreneurship in America and make numerous lots of investments in entrepreneurs of which numerous suffered through the pandemic when I initially became aware of this I called BS I don’t think it since 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 should have and we utilized them carefully to stay alive throughout the pandemic so when I heard about this I stated nah it can’t be true but when I dug around I even contacted us to my politician pals 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 individuals informed me well you can’t get it because you took the PPP also not true so let’s ask Josh why does no one know about the employee retention credit you know what’s fascinating you’re discussing the banks Kevin because in the PPP loan procedure the federal government made it extremely 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 just procedure process that’s all um and here there was mayhem 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 initial program and when they changed the law in 2021 the banks were refraining from doing ERC because 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 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 a few of them are doing it as a payroll business your accounting professional no your accounting professional’s never ever done this before unless you have an account that went into this organization and bottom line my firm Kevin has been in business given that 2009 and we have actually been dealing with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 business so a great deal of our huge big corporate customers have actually worked with bottom line to recuperate other government programs we’ve done sales tax and use tax joblessness tax work chance tax credits research and development tax credits unclaimed home real estate tax all of these other federal government programs.
The staff member 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 up to $10,000 in earnings paid by an.
Because of COVID-19 or whose gross invoices, employer whose business is completely or partly suspended.
decrease by more than 50%.
1. The credit is available to all companies regardless of size consisting of tax exempt organizations. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
companies who take Small Business Loans.
2. To certify, the employer needs to satisfy one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s business is fully or partially suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross receipts are below 50% of the equivalent quarter in 2019. When the.
company’s gross receipts go above 80% of a similar quarter in 2019 they no longer certify.
after completion of that quarter.
Computation 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 before December 31, 2020.
The definition of certifying wages differs by whether an employer had, usually, basically than.
100 employees in 2019.
Business that specialize in ERC filing help generally supply proficiency and support to help services navigate the intricate procedure of claiming the credit. They can offer different services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Cheat Sheet
Eligibility Evaluation: These business will evaluate your company’s eligibility for the ERC based upon factors such as your market, revenue, and operations. If you meet the requirements for the credit and recognize the maximum credit quantity you can declare, they can help figure out.
Paperwork and Calculation: ERC filing services will help in collecting the needed documents, such as payroll records and monetary statements, to support your claim. They will also assist determine the credit amount based on qualified earnings and other qualifying costs.
Retroactive Claim Review: If you are qualified to claim the ERC for previous quarters, these companies can examine your previous payroll records and financials to determine prospective opportunities for retroactive credits. They can assist you amend previous income tax return to declare these refunds.
Filing Help: Companies specializing in ERC filings will prepare and submit the needed kinds and paperwork on your behalf. This includes completing Form 941 or any other required tax return.
Compliance and Updates: ERC guidelines and guidance have evolved gradually. These companies remain upgraded with the most recent changes and guarantee that your filings comply with the most existing guidelines. If the Internal revenue service demands additional info or carries out an audit related to your ERC claim, they can also offer continuous support.
It is necessary to research study and veterinarian any business providing ERC filing assistance to guarantee their reliability and knowledge. Try to find established firms with experience in tax and payroll services, or think about reaching out to relied on accounting companies or tax specialists who provide ERC submitting assistance.
Bear in mind that while these business can offer important help, it’s always an excellent idea to have a fundamental understanding of the ERC requirements and procedure yourself. This will assist you make informed decisions and ensure accurate filings.
The Worker Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief procedures. The objective of the ERC is to encourage companies to keep and pay their workers 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 eligible companies, including for-profit services, tax-exempt companies, and specific governmental entities. To qualify, employers should satisfy one of two requirements:.
Business operations were fully or partly suspended due to a government order related to COVID-19.
The business experienced a significant decrease in gross receipts. As pointed out previously, for 2021, a substantial decline is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount amounts to a portion (as much as 70%) of qualified incomes paid to staff members, including particular health insurance 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: Initially, organizations that received a Paycheck Defense Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 permits businesses to claim the ERC even if they got a PPP loan. However, the same salaries can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and improved, enabling eligible employers to claim the credit for certified wages paid as far back as March 13, 2020. This retroactive provision provides a chance for companies to change prior-year income tax return and receive refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their work income tax return, usually Form 941. The excess can be reimbursed to the employer if the credit exceeds the quantity of employment taxes owed.
It’s important to note that the ERC provisions and eligibility requirements have actually progressed with time. The very best strategy is to consult with a tax professional or visit the official internal revenue service site for the most up-to-date and comprehensive information concerning the ERC, including any current legal modifications or updates.
To receive the ERC, a company must satisfy one of the following requirements:.
The business operations were totally or partially suspended due to a government order related to COVID-19.
Business experienced a significant decrease in gross invoices. For 2021, a substantial decrease is defined as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decline in gross invoices compared to the immediately preceding quarter.
The ERC is readily available to businesses of all sizes, including tax-exempt companies, but there are some exceptions. Federal government entities and businesses that received a PPP loan may have constraints on claiming the credit.
The procedure for declaring the ERC involves completing the required types and including the credit on your work income tax return (generally Type 941). The exact time it takes to process the credit can vary based upon a number of factors, consisting of the complexity of your service and the work of the internal revenue service. It’s advised to talk to a tax expert for assistance specific to your scenario.
There are a number of companies that can help with the process of declaring the ERC. Some widely known companies that offer help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the details supplied here is based on basic knowledge and might not reflect the most current updates or modifications to the ERC. It is necessary to talk to a tax expert or check out the official internal revenue service site for the most accurate and up-to-date details regarding eligibility, claiming procedures, and offered help.
Less than 100. The credit is based if the company had 100 or fewer workers on average in 2019.
on salaries paid to all staff members whether they actually worked or not. In other words, even if the.
employees worked full time and earned money for full time work, the company still gets the credit.
Greater than 100. The credit is if the company had more than 100 workers on average in 2019.
permitted only for incomes paid to employees who did not work throughout the calendar quarter.
In both cases, “salaries” consists of not just money payments but likewise a portion of the expense of employer.
offered healthcare. Employee Retention Credit Cheat Sheet
Employers can be immediately repaid for the credit by lowering the amount of payroll taxes they.