Lets talk first about Employee Retention Credit For Dummies :
Our team here what do these men doing everybody in this room is helping teach people about ERC and uh constantly supply a beautiful breakfast and have individuals actually find out about the program we must head to the space where we are able to show some of the checks that we are getting for business and I want to see that what is this this is uh hundreds of millions of dollars literally Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to clients verifying that the check is on the method I suggest you know if you just begin to look at some 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 party at the end when the check is verified the numbers are verified and the check is on the mail in the mail from the internal revenue service heading to the customer so that’s how you’re able to track it you know when you
receive this you know the check is chosen sure which’s when they pay so they do not pay anything up until they in fact get the money they do not pay bottom line Wonder trust anything till this letter is validated the check is on the method they transfer it into their savings account and they can really trust Wonder trust that the procedure has been completed and how many you think you have actually processed because you started this we have to do with 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 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 Terrific here you’re at my YouTube channel we’re discussing something actually essential today the staff member retention credit which the majority of you have actually never ever heard of I definitely had not become aware of it until extremely just recently and discovered a lot about it due to the fact that this is probably the most affordable cost of capital for any small company anywhere
anytime if you have workers between five and five hundred so I have actually got the expert with me this is Josh Fox he’s the creator and CEO of bottom line Concepts they’re the largest processor of these ERC credits this is a 170 page program so it’s hard this isn’t like PPP we simply call up your bank manager and state 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 representative for this I like this program it’s disappearing soon you got to find out all 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 created the cares Act and the cares act used services 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everyone it makes a huge difference right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
fix the money cash payroll tax refund all right go on sorry I just need to make sure we got that point I imply that’s a huge distinction a loan versus money cash I like cash money that’s what we’re talking 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 lovely difficult check in the mail where you get actual cash from the IRS 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 person needed to be a worker 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 employees right you had 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 workers and you paid federal payroll taxes that’s why you would be qualified so you need to be on payroll in 2020 on the W-2 and you have to be on payroll for the first six months of 2021 on the W-2 right so there were six 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 2 and three of 2021. okay so that’s how it’s measured you have to be on the W-2 during that period now let’s talk my favorite part cash how much can you get back per worker that was on a W-2 in those 6 quarters so the calculation in 2020 to be precise Kevin is 50 of the staff member’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 staff member’s wage to an optimum of 7 thousand per quarter how did that take place um they simply altered the rules in.
2021 versus because the chaos of the pandemic so they wanted 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 up to 5 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 five thousand in twenty twenty that’s twenty 6 thousand dollars per staff member that is since that’s a great deal of cash it is now there’s a caveat here the PPP money would have to be decreased 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 on average Kevin is if you took PPP cash someplace around ten thousand dollars an individual so let’s say hypothetically you owned a restaurant in New york city 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 certainly now the big question is why does nobody know about this due to the fact that appearance when I first found out about this when I initially met Josh you understand I’ve got great deals of financial investments in great deals of companies I’m a significant advocate for entrepreneurship in America and make numerous numerous financial investments in business owners of which many suffered through the pandemic when I first became aware of this I called BS I do not believe 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 been worthy of and we utilized them wisely to stay alive throughout the pandemic so when I found out about this I said nah it can’t hold true however when I dug around I even contacted us to my political leader good friends Governor Senators they didn’t learn about it I indicate that’s how you understand that’s how misinformation is that there’s no info out there then a lot of people informed me well you can’t get it due to the fact that you took the PPP likewise not real so let’s ask Josh why does no one learn about the worker retention credit you know what’s intriguing you’re speaking about 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 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 procedure process that’s all um and here there was mayhem because remember in the original cares act you could refrain from doing both programs so if you had done PPP you could refrain from doing ERC in the original program and when they changed 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 know how to do this not actually he or she’s never ever done it previously do the banks do it nope the banks do not do it the payroll companies yeah some of them are doing it as a payroll business your accountant no your accountant’s never ever done this before unless you have an account that went into this organization and bottom line my firm Kevin has stayed in business considering that 2009 and we’ve been working with the federal government and the state government to recover money for Fortune 500 Fortune 1000 business so a great deal of our big huge corporate customers have actually worked with bottom line to recuperate other government programs we’ve done sales tax and use tax unemployment tax work opportunity tax credits research and development tax credits unclaimed home property tax all of these other government programs.
The staff member retention tax credit is a broad based refundable tax credit created to motivate.
companies to keep workers on their payroll. The credit is 50% of approximately $10,000 in wages paid by an.
company whose company is completely or partially suspended because of COVID-19 or whose gross invoices.
decrease by more than 50%.
1. The credit is offered to all employers regardless of size including tax exempt organizations. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
organizations who take Small Business Loans.
2. To qualify, the employer needs to satisfy one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s service is completely or partly suspended by government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the comparable quarter in 2019. As soon as the.
employer’s gross receipts go above 80% of a comparable quarter in 2019 they no longer qualify.
after the end of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the certifying incomes paid up to $10,000 in total.
It works for incomes paid after March 13th and before December 31, 2020.
The definition of certifying wages differs by whether a company had, typically, more or less than.
100 workers in 2019.
Business that specialize in ERC filing help usually supply proficiency and assistance to help companies browse the complex process of declaring the credit. They can use various services, including:.
How is the employee retention credit calculated? Employee Retention Credit For Dummies
Eligibility Evaluation: These companies will examine your service’s eligibility for the ERC based upon aspects such as your market, income, and operations. If you fulfill the requirements for the credit and recognize the maximum credit amount you can declare, they can assist figure out.
Documents and Computation: ERC filing services will help in gathering the required documents, such as payroll records and monetary declarations, to support your claim. They will likewise assist calculate the credit quantity based upon qualified incomes and other qualifying costs.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for prior quarters, these business can review your past payroll records and financials to identify potential opportunities for retroactive credits. They can help you amend prior tax returns to claim these refunds.
Filing Support: Companies concentrating on ERC filings will prepare and submit the required types and documents in your place. This consists of finishing Kind 941 or any other required tax forms.
Compliance and Updates: ERC guidelines and assistance have progressed gradually. These business stay updated with the current changes and guarantee that your filings comply with the most present guidelines. They can also supply continuous support if the internal revenue service requests extra information or performs an audit related to your ERC claim.
It’s important to research study and veterinarian any business offering ERC filing support to guarantee their trustworthiness and competence. Look for established firms with experience in tax and payroll services, or consider connecting to relied on accounting firms or tax experts who provide ERC filing support.
Bear in mind that while these companies can provide valuable help, it’s always a great idea to have a basic understanding of the ERC requirements and process yourself. This will help you make informed choices and make sure precise filings.
The Worker Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief measures. The goal of the ERC is to encourage businesses to retain and pay their staff members during the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to eligible employers, including for-profit companies, tax-exempt organizations, and particular governmental entities. To certify, companies must meet one of two criteria:.
The business operations were completely or partly suspended due to a federal government order related to COVID-19.
Business experienced a considerable decline in gross receipts. As pointed out previously, for 2021, a substantial decrease is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decline is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decline in gross invoices compared to the right away preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity is equal to a portion (approximately 70%) of qualified incomes paid to staff members, including certain health insurance expenses. The optimum credit per worker 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 Security Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 enables companies to declare the ERC even if they got a PPP loan. However, the exact same earnings can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and improved, allowing eligible employers to declare the credit for qualified wages paid as far back as March 13, 2020. This retroactive provision provides an opportunity for services to amend prior-year tax returns and receive refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their employment income tax return, usually Form 941. If the credit exceeds the quantity of employment taxes owed, the excess can be reimbursed to the employer.
It’s important to note that the ERC arrangements and eligibility criteria have progressed with time. The best course of action is to talk to a tax professional or go to the main internal revenue service site for the most updated and in-depth information regarding the ERC, consisting of any current legislative changes or updates.
To receive the ERC, a business must meet one of the following requirements:.
The business operations were totally or partly suspended due to a federal government order related to COVID-19.
Business experienced a substantial decline in gross receipts. For 2021, a considerable decline is defined as a 20% decline in gross invoices 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.
The ERC is offered to organizations of all sizes, consisting of tax-exempt organizations, however there are some exceptions. Federal government entities and organizations that got a PPP loan might have restrictions on claiming the credit.
The procedure for claiming the ERC involves finishing the needed kinds and including the credit on your work tax return (usually Form 941). The exact time it requires to process the credit can differ based on several factors, consisting of the intricacy of your company and the workload of the IRS. It’s recommended to speak with a tax professional for assistance particular to your situation.
There are numerous business that can assist with the process of declaring the ERC. Some widely known business that use help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the information supplied here is based on basic knowledge and might not reflect the most current updates or changes to the ERC. It is necessary to consult with a tax expert or visit the main IRS site for the most updated and precise details concerning eligibility, declaring procedures, and readily available assistance.
Less than 100. The credit is based if the employer had 100 or less employees on average in 2019.
on salaries paid to all staff members whether they actually worked or not. To put it simply, even if the.
workers worked full-time and made money for full-time work, the company still gets the credit.
Greater than 100. If the company had more than 100 workers typically in 2019, then the credit is.
permitted just for wages paid to workers who did not work throughout the calendar quarter.
In both cases, “earnings” includes not just cash payments but also a portion of the expense of company.
supplied health care. Employee Retention Credit For Dummies
Employers can be immediately compensated for the credit by decreasing the quantity of payroll taxes they.