Lets talk first about Employee Retention Credit For Employee :
Our group here what do these people doing everyone in this space is assisting teach people about ERC and uh always provide a gorgeous breakfast and have individuals actually 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 business and I ‘d like to see that what is this this is uh numerous millions of dollars actually Kevin numerous millions of dollars so these are replicate copies of the letters that go to clients verifying that the check is on the way I suggest you know if you simply start 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 mean it’s just I indicate consider how many actual 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 validated 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
get this you know 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 cash 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 bank account and they can truly rely on Wonder trust that the process has actually been finished and the number of you believe you have actually processed given that you began this we have to do with 35 000 of these for
about 6 billion dollars wow so clearly they know 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 among these that’s what matters all right Mr Terrific here you’re at my YouTube channel we’re discussing something really important today the employee retention credit which most of you have actually never ever heard of I certainly had not become aware of it until very recently and learned a lot about it because this is probably the most affordable expense of capital for any small company anywhere
anytime if you have staff members between 5 and five hundred so I’ve got the professional with me this is Josh Fox he’s the creator and CEO of bottom line Ideas 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 say give me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to inform 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 love this program it’s going away very soon you got to learn all about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply begin there so throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act offered companies three 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 difference right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
remedy the cash money payroll tax refund okay go on sorry I just need to ensure we got that point I imply that’s a huge distinction a loan versus money cash I like cash cash that’s what we’re speaking about fine 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 gorgeous hard check in the mail where you get real money from the internal revenue service all right so let’s discuss how it works due to the fact that it sounds like to me if it’s a if it’s worker retention credit that person needed to be a worker so I’m going to make the Assumption this cash is not for the owner not for individuals on the cap table not for investors it’s for workers right you had to have actually owned an organization but it’s based upon you having W-2 employees 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 right so there were six 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. all right so that’s how it’s measured you have to be on the W-2 throughout that period now let’s talk my favorite part money 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 exact Kevin is 50 of the employee’s income to an optimum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the worker’s wage to a maximum of seven thousand per quarter how did that take place um they just altered the rules in.
2021 versus because the turmoil 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 after that what takes place 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 six thousand dollars per employee that is since that’s a lot of cash it is now there’s a caveat here the PPP money would have to be minimized from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would minimize the 26 000 so what we’re seeing typically Kevin is if you took PPP cash somewhere around 10 thousand dollars an individual so let’s say hypothetically you owned a dining establishment 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 IRS so it’s big clearly now the huge question is why does no one understand about this due to the fact that look when I first found out about this when I first met Josh you know I’ve got great deals of financial investments in lots of companies I’m a major supporter for entrepreneurship in America and make many numerous investments in business owners of which lots of suffered through the pandemic when I first heard about this I called BS I don’t 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 which were well should have and we used them wisely to stay alive during the pandemic so when I became aware of this I stated nah it can’t be true however when I dug around I even contacted us to my political leader pals Governor Senators they didn’t understand about it I indicate that’s how you know that’s how false information is that there’s no info out there then a lot of people 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 intriguing you’re talking about the banks Kevin due to the fact that in the PPP loan process the federal government made it very 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 simply procedure process that’s all um and here there was chaos due to the fact that remember in the original cares act you might refrain from doing both programs so if you had done PPP you could refrain from doing 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 made it clear to anybody about how to.
do this does your CFO understand how to do this not actually she or he’s never ever done it before 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 business your accounting professional no your accounting professional’s never ever done this before unless you have an account that entered into this organization and bottom line my company Kevin has actually stayed in business given that 2009 and we have actually been working with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 companies so a lot of our big huge corporate clients have worked with bottom line to recuperate other federal government programs we’ve done sales tax and utilize tax unemployment tax work chance tax credits research and development tax credits unclaimed home property tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit designed to motivate.
companies to keep staff members on their payroll. The credit is 50% of approximately $10,000 in salaries paid by an.
Because of COVID-19 or whose gross receipts, employer whose business is totally or partly suspended.
decline by more than 50%.
1. The credit is available to all employers despite size including tax exempt organizations. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) little.
services who take Small Business Loans.
2. To certify, the company has to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s service is totally or partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross invoices are below 50% of the equivalent quarter in 2019. Once the.
company’s gross receipts go above 80% of an equivalent quarter in 2019 they no longer certify.
after the end of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the qualifying earnings paid up to $10,000 in overall.
It is effective for salaries paid after March 13th and before December 31, 2020.
The definition of certifying incomes differs by whether a company had, usually, more or less than.
100 employees in 2019.
Companies that concentrate on ERC filing support usually provide know-how and assistance to assist organizations browse the intricate procedure of claiming the credit. They can offer various services, including:.
How is the employee retention credit calculated? Employee Retention Credit For Employee
Eligibility Assessment: These companies will examine your organization’s eligibility for the ERC based on aspects such as your market, earnings, and operations. If you satisfy the requirements for the credit and identify the optimum credit quantity you can declare, they can help figure out.
Documentation and Computation: ERC filing services will help in collecting the necessary documentation, such as payroll records and financial statements, to support your claim. They will likewise help determine the credit amount based on eligible salaries and other qualifying expenses.
Retroactive Claim Review: If you are qualified to claim the ERC for prior quarters, these business can evaluate your previous payroll records and financials to identify potential opportunities for retroactive credits. They can help you modify prior tax returns to declare these refunds.
Filing Assistance: Business specializing in ERC filings will prepare and send the required kinds and paperwork on your behalf. This includes completing Form 941 or any other necessary tax forms.
Compliance and Updates: ERC guidelines and guidance have evolved with time. These companies remain upgraded with the current changes and make sure that your filings adhere to the most present guidelines. They can likewise provide ongoing support if the IRS requests extra information or performs an audit related to your ERC claim.
It is very important to research and veterinarian any company offering ERC filing assistance to ensure their trustworthiness and know-how. Look for established firms with experience in tax and payroll services, or consider connecting to trusted accounting companies or tax professionals who use ERC submitting support.
Remember that while these companies can offer valuable assistance, it’s constantly an excellent idea to have a basic understanding of the ERC requirements and procedure yourself. This will assist you make notified choices and guarantee accurate filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief measures. The objective of the ERC is to motivate organizations to retain and pay their staff members during the pandemic, even if their operations have been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is available to eligible employers, consisting of for-profit businesses, tax-exempt companies, and certain governmental entities. To certify, companies should fulfill one of two criteria:.
Business operations were completely or partially suspended due to a government order related to COVID-19.
Business experienced a significant decrease in gross receipts. As pointed out earlier, for 2021, a substantial decline is specified as a 20% decrease in gross receipts compared to the very 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 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 amounts to a portion (as much as 70%) of qualified incomes paid to workers, consisting of certain health insurance costs. 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, businesses that received a Paycheck Defense Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 permits organizations to declare the ERC even if they got a PPP loan. However, the exact same incomes can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and improved, allowing qualified companies to declare the credit for certified earnings paid as far back as March 13, 2020. This retroactive provision offers an opportunity for services to modify prior-year tax returns and get refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their employment tax returns, normally Form 941. The excess can be refunded to the company if the credit goes beyond the quantity of employment taxes owed.
It is very important to note that the ERC provisions and eligibility criteria have actually developed gradually. The best strategy is to seek advice from a tax professional or check out the main IRS website for the most detailed and current information concerning the ERC, including any current legal changes or updates.
To qualify for the ERC, a business needs to satisfy one of the following criteria:.
The business operations were completely or partially suspended due to a government order related to COVID-19.
Business experienced a substantial decrease in gross invoices. For 2021, a significant decline is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a considerable decline 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 immediately preceding quarter.
The ERC is available to businesses of all sizes, consisting of tax-exempt companies, but there are some exceptions. Government entities and organizations that got a PPP loan might have limitations on claiming the credit.
The process for claiming the ERC includes finishing the needed kinds and consisting of the credit on your employment income tax return (normally Form 941). The exact time it requires to process the credit can vary based upon several aspects, consisting of the intricacy of your organization and the workload of the internal revenue service. It’s suggested to consult with a tax professional for assistance specific to your scenario.
There are a number of companies that can assist with the process of declaring the ERC. Some popular business that provide help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the details offered here is based upon basic knowledge and may not reflect the most current updates or modifications to the ERC. It is necessary to consult with a tax professional or check out the main internal revenue service site for the most current and precise details concerning eligibility, declaring treatments, and offered support.
Less than 100. The credit is based if the employer had 100 or fewer employees on average in 2019.
on wages paid to all workers whether they really worked or not. Simply put, even if the.
staff members worked full-time and earned money for full time work, the employer 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 wages paid to staff members who did not work throughout the calendar quarter.
In both cases, “incomes” includes not simply money payments however also a portion of the cost of employer.
provided health care. Employee Retention Credit For Employee
Employers can be right away compensated for the credit by decreasing the amount of payroll taxes they.