Lets talk first about Employee Retention Credit Eligible Employees :
Our team here what do these people doing everyone in this room is assisting teach individuals about ERC and uh always offer a beautiful breakfast and have individuals actually discover the program we ought to head to the space where we are able to show some of the checks that we are getting for business and I ‘d like to see that what is this this is uh hundreds of countless dollars actually Kevin hundreds of countless dollars so these are replicate copies of the letters that go to customers verifying that the check is on the method I indicate you understand if you just begin to take a look at a few of these here I imply 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 customers 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 validated and the check is on the mail in the mail from the IRS heading to the customer so that’s how you have the ability to track it you understand when you
get this you know the check is chosen sure and that’s when they pay so they do not pay anything till they actually receive the money they don’t pay bottom line Wonder trust anything till this letter is validated the check is on the way they deposit it into their savings account and they can really trust Wonder trust that the procedure has actually been finished and how many you think you have actually processed since 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 which’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 Terrific 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 heard of I certainly hadn’t become aware of it until really recently and learned a lot about it since this is probably the most affordable 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 founder and CEO of bottom line Concepts 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 just contact your bank manager and say give me a loan it doesn’t 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’ve ended up being yes the Ambassador and paid spokesperson for this I love this program it’s going away very soon you got to find out everything about it let’s talk employee retention credit Josh Fox what is an ERC let’s just start there so during the Trump Administration when President Trump was enacted they created the cares Act and the cares act provided services 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everyone it makes a huge distinction right there two 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 all right go on sorry I simply have to make certain we got that point I indicate that’s a huge distinction a loan versus cash money I like cash money that’s what we’re talking 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 original cares Act is the ERC and yes Kevin it is a gorgeous tough check in the mail where you get actual money from the internal revenue service all right so let’s discuss how it works since it seems like to me if it’s a if it’s employee retention credit that individual needed 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 workers right you had to have owned a company but it’s based upon you having W-2 workers in America not 10.99. As long as you had W-2 employees 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 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. okay so that’s how it’s measured you have to be on the W-2 during that duration now let’s talk my preferred part money how much can you return per employee that was on a W-2 in those 6 quarters so the calculation in 2020 to be exact Kevin is 50 of the worker’s wage to a maximum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers escalated to 70 of the employee’s wage to a maximum of seven thousand per quarter how did that happen um they just changed the rules in.
2021 versus since the mayhem 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 as much as five thousand Max and then 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 six thousand dollars per employee that is because that’s a great deal of cash it is now there’s a caveat here the PPP cash would need to be minimized from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would reduce the 26 000 so what we’re seeing usually Kevin is if you took PPP money somewhere around 10 thousand dollars a person so let’s say hypothetically you owned a restaurant 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 internal revenue service so it’s huge certainly now the big question is why does nobody learn about this because appearance when I first became aware of this when I initially met Josh you understand I’ve got great deals of financial investments in lots of business I’m a major advocate for entrepreneurship in America and make many lots of investments in entrepreneurs of which numerous suffered through the pandemic when I first found out about this I called BS I do not think it since I use the PPP we went through the cash center Banks to get it it was very easy to do we had our CEOs call the banks they got their loans which were well should have and we utilized them wisely to stay alive during the pandemic so when I heard about this I said nah it can’t hold true but when I dug around I even contacted us to my political leader good friends Guv Senators they didn’t learn about it I suggest that’s how you understand 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 since you took the PPP also not true so let’s ask Josh why does nobody learn about the employee retention credit you understand what’s intriguing you’re speaking about the banks Kevin due to the fact that 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 procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply procedure process that’s all um and here there was chaos due to the fact that remember in the original cares act you could not do both programs so if you had actually done PPP you might 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 federal government never ever made it clear to any person about how to.
do this does your CFO know how to do this not actually he or she’s never done it previously do the banks do it nope the banks don’t do it the payroll business yeah a few of them are doing it as a payroll company your accountant no your accounting professional’s never ever done this before unless you have an account that entered into this business and bottom line my firm Kevin has been in business considering that 2009 and we’ve been dealing with the federal government and the state federal government to recuperate cash for Fortune 500 Fortune 1000 companies so a great deal of our huge big business clients have actually worked 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 property tax all of these other government programs.
The worker retention tax credit is a broad based refundable tax credit created to motivate.
companies to keep staff members on their payroll. The credit is 50% of up to $10,000 in wages paid by an.
employer whose service is totally or partially suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is readily available to all employers regardless of size including tax exempt companies. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
services who take Small company Loans.
2. To certify, the employer has to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s business is totally or partially suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross invoices are below 50% of the equivalent quarter in 2019. As soon as the.
employer’s gross invoices go above 80% of an equivalent quarter in 2019 they no longer certify.
after the end 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 works for salaries paid after March 13th and before December 31, 2020.
The meaning of qualifying wages varies by whether a company had, typically, basically than.
100 staff members in 2019.
Business that specialize in ERC filing assistance generally supply knowledge and assistance to help organizations navigate the intricate procedure of declaring the credit. They can use numerous services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Eligible Employees
Eligibility Evaluation: These companies will examine your organization’s eligibility for the ERC based upon aspects such as your market, revenue, and operations. They can assist determine if you satisfy the requirements for the credit and identify the maximum credit quantity you can declare.
Documents and Computation: ERC filing services will help in gathering the necessary paperwork, such as payroll records and financial declarations, to support your claim. They will also help calculate the credit amount based upon eligible wages and other certifying costs.
Retroactive Claim Review: If you are qualified to declare the ERC for previous quarters, these companies can examine your previous payroll records and financials to determine prospective chances for retroactive credits. They can assist you modify prior income tax return to declare these refunds.
Filing Assistance: Business specializing in ERC filings will prepare and send the needed types and paperwork in your place. This consists of finishing Type 941 or any other necessary tax return.
Compliance and Updates: ERC regulations and guidance have developed with time. These companies remain updated with the current changes and ensure that your filings comply with the most existing standards. If the IRS requests additional info or performs an audit related to your ERC claim, they can likewise supply ongoing support.
It’s important to research and vet any business offering ERC filing help to ensure their credibility and expertise. Look for established firms with experience in tax and payroll services, or think about reaching out to relied on accounting companies or tax experts who use ERC filing assistance.
Keep in mind that while these business can provide valuable assistance, it’s constantly a good concept to have a basic understanding of the ERC requirements and process yourself. This will assist you make informed choices and guarantee precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief measures. The goal of the ERC is to encourage companies to keep and pay their workers during the pandemic, even if their operations have actually been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to eligible employers, consisting of for-profit organizations, tax-exempt companies, and specific governmental entities. To qualify, employers should fulfill one of two requirements:.
The business operations were fully or partly suspended due to a government order related to COVID-19.
Business experienced a substantial decline in gross invoices. As mentioned previously, for 2021, a significant decline is specified as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decrease in gross invoices compared to the right away preceding quarter.
Credit Quantity: 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 (as much as 70%) of certified wages paid to workers, including certain health plan expenditures. The maximum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, companies that received a Paycheck Security Program (PPP) loan were not eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 enables services to claim the ERC even if they got a PPP loan. Nevertheless, the very same salaries can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and enhanced, permitting qualified employers to declare the credit for certified incomes paid as far back as March 13, 2020. This retroactive arrangement offers an opportunity for companies to change prior-year tax returns and receive refunds.
Declaring the Credit: Employers can declare the ERC by reporting it on their employment tax returns, generally Type 941. The excess can be reimbursed to the company if the credit surpasses the quantity of work taxes owed.
It is necessary to note that the ERC arrangements and eligibility requirements have actually evolved gradually. The very best course of action is to speak with a tax expert or check out the main internal revenue service site for the most up-to-date and comprehensive info concerning the ERC, consisting of any current legal changes or updates.
To get approved for the ERC, a business should satisfy one of the following criteria:.
Business operations were completely or partly suspended due to a government order related to COVID-19.
Business experienced a considerable decline in gross invoices. For 2021, a substantial decline is specified as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross invoices compared to the right away preceding quarter.
The ERC is available to businesses of all sizes, consisting of tax-exempt organizations, however there are some exceptions. Federal government entities and services that received a PPP loan might have constraints on declaring the credit.
The procedure for claiming the ERC involves completing the essential types and including the credit on your employment tax return (typically Type 941). The exact time it requires to process the credit can differ based upon a number of elements, including the intricacy of your business and the workload of the IRS. It’s advised to speak with a tax professional for guidance specific to your scenario.
There are a number of companies that can assist with the process of claiming the ERC. These include accounting firms, tax advisory services, and payroll company. Some well-known business that use help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research and call these companies straight to inquire about their charges and services.
Please note that the details supplied here is based upon general understanding and might not reflect the most current updates or changes to the ERC. It is essential to seek advice from a tax professional or go to the main internal revenue service site for the most precise and current info concerning eligibility, claiming procedures, and readily available help.
Less than 100. The credit is based if the employer had 100 or less workers on average in 2019.
on wages paid to all employees whether they actually worked or not. In other words, even if the.
staff members worked full-time and got paid for full-time work, the company still gets the credit.
Greater than 100. If the employer had more than 100 workers usually in 2019, then the credit is.
enabled just for incomes paid to employees who did not work during the calendar quarter.
In both cases, “salaries” includes not simply money payments but likewise a portion of the expense of employer.
offered health care. Employee Retention Credit Eligible Employees
Employers can be right away reimbursed for the credit by lowering the amount of payroll taxes they.