Lets talk first about Employee Retention Credit Drake Software :
Our group here what do these men doing everyone in this room is helping teach people about ERC and uh constantly supply a gorgeous breakfast and have people really discover the program we ought to head to the room 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 hundreds of millions of dollars so these are duplicate copies of the letters that go to customers verifying that the check is on the method I suggest you understand if you just begin 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 suggest it’s simply I mean consider how many real 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 know when you
receive this you know the check is opted for sure which’s when they pay so they do not pay anything up until they actually get the money they don’t pay bottom line Wonder trust anything until this letter is validated the check is on the method they transfer it into their bank account and they can really rely on Wonder trust that the process has actually been ended up and the number of you think you’ve processed considering that you began this we have to do with 35 000 of these for
about six billion dollars wow so clearly they understand what they’re doing and that’s what you need you require 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 talking about something really crucial today the staff member retention credit which most of you have never ever become aware of I definitely had not become aware of it up until extremely recently and learned a lot about it because this is most likely the lowest expense of capital for any small company anywhere
anytime if you have employees 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 Principles 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 just call your bank manager and say provide 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 representative for this I love this program it’s disappearing soon you got to learn all about it let’s talk employee retention credit Josh Fox what is an ERC let’s just start there so throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act provided businesses three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everybody it makes a huge distinction right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
remedy the cash cash payroll tax refund alright go on sorry I simply need to ensure we got that point I imply that’s a huge difference a loan versus cash cash I like cash cash that’s what we’re speaking 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 initial cares Act is the ERC and yes Kevin it is a stunning hard check in the mail where you get actual money from the IRS all right so let’s talk about how it works due to the fact that it sounds like to me if it’s a if it’s staff member retention credit that individual had to be a staff member so I’m going to make the Assumption this cash is not for the owner not for people on the cap table not for investors it’s for staff members right you needed to have actually owned a company however it’s based upon you having W-2 workers 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 need to be on payroll for the very first 6 months of 2021 on the W-2 correct so there were six quarters the program was open well walk us through the six quarters so you had quarters two 3 and 4 of 2020 and you had quarters one two and 3 of 2021. all right so that’s how it’s determined you need to be on the W-2 throughout that duration now let’s talk my favorite part money how much can you return per staff member that was on a W-2 in those six quarters so the computation in 2020 to be exact Kevin is 50 of the employee’s wage to an optimum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s income to an optimum of 7 thousand per quarter how did that happen um they simply changed the rules in.
2021 versus due to the fact that 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 occurs 21 000 Max in 2021 oh that’s how you come up with twenty 6 thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty 6 thousand dollars per employee that is because that’s a lot of cash it is now there’s a caveat here the PPP cash would have to be lowered from the twenty six thousand dollars so if you took PPP loan one and PPP loan two 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 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 internal revenue service so it’s big obviously now the huge question is why does no one know about this because appearance when I initially heard about this when I initially satisfied Josh you understand I have actually got great deals of financial investments in lots of business I’m a major advocate for entrepreneurship in America and make many many investments in entrepreneurs of which lots of suffered through the pandemic when I first heard about this I called BS I do not think 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 should have and we utilized them wisely to stay alive throughout 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 politician friends Governor Senators they didn’t understand about it I suggest that’s how you understand that’s how misinformation is that there’s no details out there then a lot of individuals told me well you can’t get it due to the fact that you took the PPP likewise not true so let’s ask Josh why does no one know about the employee retention credit you understand what’s intriguing you’re discussing the banks Kevin due to the fact that in the PPP loan process 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 process procedure that’s all um and here there was mayhem due to the fact that remember 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 original program and when they altered 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 government never ever made it clear to anybody about how to.
do this does your CFO know how to do this not truly he or she’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 accounting professional no your accountant’s never ever done this prior to unless you have an account that entered into this company and bottom line my firm Kevin has actually stayed in business since 2009 and we’ve been dealing with the federal government and the state federal government to recuperate cash for Fortune 500 Fortune 1000 business so a great deal of our huge huge corporate clients have actually dealt with bottom line to recuperate other government programs we have actually done sales tax and utilize tax joblessness tax work chance tax credits research and development tax credits unclaimed property property tax all of these other government programs.
The worker retention tax credit is a broad based refundable tax credit developed to encourage.
employers to keep workers on their payroll. The credit is 50% of up to $10,000 in wages paid by an.
employer whose service is completely or partly suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
1. The credit is offered to all companies despite size consisting of tax exempt organizations. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
organizations who take Small Business Loans.
2. To qualify, the employer has to satisfy one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s service is fully or partially suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross invoices are listed below 50% of the equivalent quarter in 2019. When the.
employer’s gross receipts exceed 80% of an equivalent quarter in 2019 they no longer qualify.
after the end of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the certifying salaries paid up to $10,000 in total.
It is effective for salaries paid after March 13th and prior to December 31, 2020.
The meaning of certifying wages differs by whether an employer had, usually, more or less than.
100 staff members in 2019.
Business that concentrate on ERC filing assistance normally provide proficiency and support to help organizations browse the complicated process of declaring the credit. They can use different services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Drake Software
Eligibility Evaluation: These companies will assess your company’s eligibility for the ERC based upon aspects such as your industry, income, and operations. If you satisfy the requirements for the credit and determine the optimum credit quantity you can declare, they can help identify.
Documents and Estimation: ERC filing services will help in collecting the required documentation, such as payroll records and monetary declarations, to support your claim. They will also help compute the credit quantity based upon eligible salaries and other certifying expenditures.
Retroactive Claim Review: If you are qualified to claim the ERC for prior quarters, these companies can evaluate your previous payroll records and financials to identify possible chances for retroactive credits. They can help you modify prior tax returns to declare these refunds.
Filing Support: Business focusing on ERC filings will prepare and send the essential types and paperwork in your place. This consists of finishing Type 941 or any other necessary tax return.
Compliance and Updates: ERC regulations and assistance have developed with time. These companies remain upgraded with the current changes and make sure that your filings adhere to the most present standards. They can also provide continuous support if the IRS demands extra information or performs an audit related to your ERC claim.
It’s important to research study and vet any company offering ERC filing assistance to ensure their trustworthiness and proficiency. Look for established companies with experience in tax and payroll services, or think about reaching out to relied on accounting companies or tax specialists who provide ERC filing assistance.
Bear in mind that while these companies can provide important support, it’s always a good idea to have a basic understanding of the ERC requirements and procedure yourself. This will assist you make informed decisions and ensure 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 procedures. The objective of the ERC is to encourage services to keep and pay their workers during the pandemic, even if their operations have actually been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to eligible employers, including for-profit companies, tax-exempt organizations, and certain governmental entities. To certify, companies must satisfy one of two criteria:.
Business operations were completely or partially suspended due to a federal government order related to COVID-19.
The business experienced a substantial decline in gross invoices. As discussed previously, for 2021, a substantial decline is defined as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a considerable decrease is specified as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the right away preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity is equal to a percentage (up to 70%) of certified salaries paid to workers, consisting of certain health insurance expenses. The maximum 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 got a Paycheck Defense Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 enables companies to claim the ERC even if they received a PPP loan. However, the very same incomes can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and boosted, permitting eligible employers to declare the credit for qualified salaries paid as far back as March 13, 2020. This retroactive provision provides a chance for businesses to change prior-year income tax return and receive refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their employment tax returns, usually Type 941. The excess can be refunded to the company if the credit exceeds the amount of employment taxes owed.
It is necessary to keep in mind that the ERC provisions and eligibility criteria have actually developed in time. The very best strategy is to speak with a tax expert or go to the official IRS site for the most in-depth and up-to-date information regarding the ERC, including any recent legal changes or updates.
To receive the ERC, a company must fulfill one of the following criteria:.
The business operations were totally or partially suspended due to a government order related to COVID-19.
Business experienced a substantial decrease in gross receipts. For 2021, a significant decline is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
The ERC is offered to businesses of all sizes, consisting of tax-exempt organizations, however there are some exceptions. Federal government entities and businesses that received a PPP loan may have constraints on claiming the credit.
The process for declaring the ERC involves completing the required types and consisting of the credit on your employment income tax return (generally Form 941). The exact time it requires to process the credit can vary based on numerous aspects, including the intricacy of your company and the workload of the internal revenue service. It’s advised to consult with a tax expert for guidance specific to your situation.
There are several companies that can help with the process of declaring the ERC. Some popular business that use assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the information offered here is based upon general knowledge and might not reflect the most current updates or changes to the ERC. It is necessary to seek advice from a tax professional or check out the official IRS website for the most precise and up-to-date details regarding eligibility, declaring procedures, and available support.
Less than 100. The credit is based if the employer had 100 or fewer employees on average in 2019.
on earnings paid to all workers 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.
allowed just for wages paid to staff members who did not work throughout the calendar quarter.
In both cases, “wages” consists of not simply cash payments but also a portion of the expense of employer.
offered health care. Employee Retention Credit Drake Software
Companies can be right away compensated for the credit by lowering the amount of payroll taxes they.