Lets talk first about Employee Retention Credit Eligible Employer :
Our group here what do these men doing everybody in this room is assisting teach people about ERC and uh constantly supply a gorgeous breakfast and have people truly learn about the program we ought to head to the space where we have the ability to display 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 literally Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to customers verifying that the check is on the way I imply you know 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 mean it’s simply I indicate think about the number of actual clients 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 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 know when you
get this you understand the check is gone for sure and that’s when they pay so they don’t pay anything up until they in fact receive the money they do not pay bottom line Wonder trust anything up until this letter is verified the check is on the method they transfer it into their checking account and they can truly trust Wonder trust that the process has actually been completed and how many you think you’ve processed considering that you started this we’re about 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 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 talking about something really essential today the worker retention credit which the majority of you have actually never ever heard of I certainly hadn’t heard of it till very just recently and learned a lot about it since this is most likely the lowest cost of capital for any small business anywhere
anytime if you have workers between 5 and five hundred so I’ve got the expert with me this is Josh Fox he’s the creator and CEO of bottom line Principles they’re the biggest processor of these ERC credits this is a 170 page program so it’s not easy this isn’t like PPP we simply call your bank supervisor 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 have actually ended up being yes the Ambassador and paid spokesperson for this I enjoy this program it’s going away 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 simply start there so during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act offered organizations three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everybody it makes a huge difference right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the cash money payroll tax refund fine go on sorry I just need to make sure we got that point I indicate that’s a huge distinction a loan versus cash cash I like cash cash that’s what we’re speaking about all right 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 difficult check in the mail where you get actual money from the IRS all right so let’s discuss how it works since it sounds like to me if it’s a if it’s worker retention credit that individual needed to be a staff member 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 staff members right you had to have owned an organization however it’s based on you having W-2 employees 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 eligible so you have 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 right so there were six quarters the program was open well walk us through the six quarters so you had quarters two three and 4 of 2020 and you had quarters one two and 3 of 2021. alright so that’s how it’s measured you need to be on the W-2 during that period now let’s talk my preferred 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 worker’s wage to an optimum of 5 thousand dollars per employee 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 take place um they just changed the rules in.
2021 versus due to the fact that the mayhem of the pandemic so they wanted to even get more to keep those employees on payroll 100 so if you can get 5 000 per person Max in twenty that was 50 in 2020 up to five thousand Max and then what occurs 21 000 Max in 2021 oh that’s how you come up with twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty six thousand dollars per staff member that is since that’s a great deal of money it is now there’s a caution here the PPP cash would need to be decreased from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would lower the 26 000 so what we’re seeing on average Kevin is if you took PPP cash someplace around 10 thousand dollars a person so let’s state hypothetically you owned a dining establishment in New York City where I’m from and you had a hundred staff members and you took PPP money 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 learn about this due to the fact that look when I initially heard about this when I first satisfied Josh you know I have actually got great deals of financial investments in great deals of companies I’m a major advocate for entrepreneurship in America and make numerous numerous investments in entrepreneurs of which lots of suffered through the pandemic when I first became aware of this I called BS I don’t believe it due to the fact that I use the PPP we went through the money center Banks to get it it was really easy to do we had our CEOs call the banks they got their loans which were well been worthy of and we used them sensibly to stay alive throughout the pandemic so when I became aware of this I stated nah it can’t hold true but when I dug around I even contacted us to my political leader buddies Governor Senators they didn’t know about it I suggest that’s how you know that’s how false information is that there’s no details out there then a bunch of people told me well you can’t get it due to the fact that you took the PPP also not real so let’s ask Josh why does no one know about the staff member retention credit you understand what’s fascinating you’re talking about the banks Kevin due to the fact that in the PPP loan procedure 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 nation 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 turmoil because keep in mind in the original cares act you might refrain from doing both programs so if you had actually done PPP you might not do ERC in the initial program and when they altered 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 made it clear to anybody 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 do not do it the payroll business yeah some of them are doing it as a payroll business your accountant no your accounting professional’s never done this before unless you have an account that entered into this company and bottom line my firm Kevin has actually been in business because 2009 and we’ve been working with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 business so a lot of our huge huge business clients have actually worked with bottom line to recuperate other federal government programs we’ve done sales tax and use tax unemployment tax work opportunity tax credits research and development tax credits unclaimed property real estate tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit developed to encourage.
companies to keep staff members on their payroll. The credit is 50% of approximately $10,000 in wages paid by an.
Since of COVID-19 or whose gross invoices, company whose business is fully or partially suspended.
decline by more than 50%.
1. The credit is offered to all employers regardless of size consisting of tax exempt companies. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) small.
businesses who take Small company Loans.
2. To certify, the company needs to satisfy one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s business is totally or partly suspended by government order due to COVID-19.
during the calendar quarter or.
o the company’s gross invoices are below 50% of the equivalent quarter in 2019. Once the.
company’s gross receipts exceed 80% of an equivalent quarter in 2019 they no longer certify.
after the end of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the qualifying wages paid up to $10,000 in overall.
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, on average, more or less than.
100 workers in 2019.
Companies that specialize in ERC filing help usually offer knowledge and support to help services 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 Employer
Eligibility Assessment: These business will evaluate your company’s eligibility for the ERC based on factors such as your market, earnings, and operations. If you satisfy the requirements for the credit and determine the optimum credit amount you can declare, they can assist determine.
Documentation and Estimation: ERC filing services will help in gathering the necessary documents, such as payroll records and financial declarations, to support your claim. They will also assist compute the credit amount based upon qualified incomes and other qualifying expenditures.
Retroactive Claim Review: If you are eligible to claim the ERC for previous quarters, these business can review your past payroll records and financials to identify potential opportunities for retroactive credits. They can help you change previous income tax return to declare these refunds.
Filing Assistance: Business specializing in ERC filings will prepare and submit the necessary types and documentation on your behalf. This includes completing Kind 941 or any other required tax return.
Compliance and Updates: ERC regulations and guidance have actually progressed over time. These companies stay upgraded with the latest changes and ensure that your filings abide by the most existing standards. They can likewise offer ongoing assistance if the IRS demands additional info or performs an audit related to your ERC claim.
It is essential to research and veterinarian any business providing ERC filing support to ensure their trustworthiness and expertise. Try to find established companies with experience in tax and payroll services, or consider connecting to trusted accounting firms or tax professionals who use ERC filing assistance.
Remember that while these companies can provide important help, it’s constantly a great concept to have a basic understanding of the ERC requirements and process yourself. This will help you make notified decisions and guarantee accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief steps. The goal of the ERC is to encourage businesses to maintain and pay their workers throughout the pandemic, even if their operations have actually been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to qualified companies, including for-profit services, tax-exempt organizations, and specific governmental entities. To qualify, employers must satisfy one of two requirements:.
Business operations were completely or partially suspended due to a government order related to COVID-19.
The business experienced a considerable decline in gross receipts. As mentioned previously, for 2021, a substantial decrease is specified as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a substantial decrease is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross receipts compared to the immediately preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit amount amounts to a portion (as much as 70%) of qualified earnings paid to workers, consisting of certain health insurance 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, businesses that got a Paycheck Security Program (PPP) loan were not eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 allows companies to declare the ERC even if they got a PPP loan. Nevertheless, the same wages can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively broadened and boosted, allowing qualified companies to claim the credit for certified earnings paid as far back as March 13, 2020. This retroactive arrangement offers an opportunity for organizations to modify prior-year income tax return and receive refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their employment income tax return, usually Form 941. If the credit exceeds the amount of employment taxes owed, the excess can be reimbursed to the employer.
It is necessary to keep in mind that the ERC provisions and eligibility criteria have actually progressed over time. The best strategy is to seek advice from a tax expert or visit the official IRS site for the most up-to-date and in-depth info regarding the ERC, including any current legal modifications or updates.
To qualify for the ERC, a business needs to meet 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 decline in gross invoices. For 2021, a considerable decline is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the right away 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 got a PPP loan might have restrictions on declaring the credit.
The process for declaring the ERC involves completing the needed forms and consisting of the credit on your employment income tax return (normally Type 941). The exact time it requires to process the credit can differ based upon numerous aspects, including the intricacy of your service and the workload of the internal revenue service. It’s suggested 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 claiming the ERC. These consist of accounting firms, tax advisory services, and payroll company. Some popular business that offer assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research study and call these business directly to inquire about their services and charges.
Please keep in mind that the details offered here is based upon basic knowledge and might not reflect the most current updates or modifications to the ERC. It is very important to talk to a tax professional or check out the main internal revenue service site for the most up-to-date and accurate details relating to eligibility, declaring treatments, and available help.
Less than 100. If the employer had 100 or less staff members typically in 2019, then the credit is based.
on earnings paid to all staff members whether they actually worked or not. In other words, even if the.
workers 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 staff members typically in 2019, then the credit is.
allowed just for earnings paid to employees who did not work throughout the calendar quarter.
In both cases, “wages” consists of not just money payments but also a part of the cost of company.
provided healthcare. Employee Retention Credit Eligible Employer
Employers can be instantly repaid for the credit by minimizing the quantity of payroll taxes they.