Lets talk first about Employee Retention Credit How Is It Paid :
Our team here what do these people doing everyone in this space is helping teach people about ERC and uh always offer a beautiful breakfast and have people really learn about the program we should 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 numerous millions of dollars so these are duplicate copies of the letters that go to clients confirming that the check is on the way I imply you understand if you just begin to take a 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 imply think of the number of actual customers that went through the program yeah this is the very end this is the celebration at the end when the check is verified the numbers are confirmed and the check is on the mail in the mail from the IRS heading to the customer so that’s how you’re able 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 get the cash they do not pay bottom line Wonder trust anything until this letter is confirmed the check is on the method they deposit it into their checking account and they can really trust Wonder trust that the process has been ended up and the number of you believe you’ve processed because you began this we’re about 35 000 of these for
about 6 billion dollars wow so clearly they understand what they’re doing and that’s what you require you require 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 essential today the worker retention credit which most of you have actually never ever heard of I certainly had not become aware of it till extremely recently and learned a lot about it because this is most likely the lowest cost of capital for any small business anywhere
anytime if you have staff members in between 5 and five hundred so I’ve got the expert with me this is Josh Fox he’s the founder and CEO of bottom line Concepts they’re the biggest processor of these ERC credits this is a 170 page program so it’s difficult this isn’t like PPP we simply contact your bank supervisor and say offer me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to tell us all about it and how to get it and why I have actually ended up being yes the Ambassador and paid spokesperson for this I love this program it’s going away 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 came up with the cares Act and the cares act used services three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody it makes a big distinction right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the money money payroll tax refund alright go on sorry I just need to make sure we got that point I indicate that’s a big difference a loan versus money cash I like cash money that’s what we’re discussing 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 tough check in the mail where you get actual money from the internal revenue service all right so let’s speak about how it works because it seems like to me if it’s a if it’s employee retention credit that person had to be a staff member so I’m going to make the Presumption this cash is not for the owner not for individuals on the cap table not for investors it’s for employees right you had to have actually owned an organization but it’s based on you having W-2 workers in America not 10.99. so 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 6 quarters the program was open well walk us through the 6 quarters so you had quarters two 3 and 4 of 2020 and you had quarters one 2 and three 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 how much can you return per employee that was on a W-2 in those 6 quarters so the calculation in 2020 to be precise Kevin is 50 of the employee’s wage to an optimum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the worker’s wage to an optimum of 7 thousand per quarter how did that happen um they simply changed the rules in.
2021 versus because the turmoil 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 up to five thousand Max and after that what occurs 21 000 Max in 2021 oh that’s how you develop twenty 6 thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty 6 thousand dollars per worker that is because that’s a great deal of money it is now there’s a caveat here the PPP cash would have to be reduced 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 money someplace around 10 thousand dollars a person so let’s say hypothetically you owned a dining establishment in New york city City where I’m from and you had a hundred workers and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s huge certainly now the huge question is why does no one learn about this due to the fact that look when I first heard about this when I first satisfied Josh you know I’ve got great deals of financial investments in great deals of companies I’m a major supporter for entrepreneurship in America and make many lots of investments in business owners of which lots of suffered through the pandemic when I first became aware of this I called BS I do not think it because I use the PPP we went through the money center Banks to get it it was very easy to do we had our CEOs call the banks they got their loans and that were well should have and we used them carefully to survive throughout the pandemic so when I heard about this I stated nah it can’t hold true but when I dug around I even contacted us to my politician good friends Guv Senators they didn’t understand about it I imply that’s how you understand that’s how false information 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 real so let’s ask Josh why does nobody understand about the employee retention credit you understand what’s interesting 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 procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s just process procedure that’s all um and here there was turmoil since remember in the original cares act you could refrain from doing both programs so if you had actually done PPP you could refrain from doing ERC in the initial program and when they changed the law in 2021 the banks were not doing ERC due to the fact that 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 understand how to do this not truly he or she’s never done it previously do the banks do it nope the banks don’t do it the payroll business yeah some of them are doing it as a payroll company your accounting professional no your accounting professional’s never done this prior to unless you have an account that entered into this business and bottom line my firm Kevin has been in business given that 2009 and we’ve been dealing with the federal government and the state government to recover money for Fortune 500 Fortune 1000 companies so a lot of our huge big corporate clients have actually worked with bottom line to recover other federal government programs we have actually done sales tax and use tax unemployment tax work chance 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 employees on their payroll. The credit is 50% of as much as $10,000 in incomes paid by an.
Because of COVID-19 or whose gross receipts, company whose business is completely or partly suspended.
decline by more than 50%.
1. The credit is readily available to all companies no matter size including tax exempt companies. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
companies who take Small Business Loans.
2. To qualify, the employer has to satisfy one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s company is totally or partly suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross invoices are 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 quantity of the credit is 50% of the qualifying earnings 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 salaries varies by whether a company had, on average, more or less than.
100 employees in 2019.
Companies that focus on ERC filing help generally provide proficiency and support to assist services browse the intricate process of claiming the credit. They can use various services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit How Is It Paid
Eligibility Evaluation: These business will evaluate your service’s eligibility for the ERC based on factors such as your industry, revenue, and operations. They can help identify if you meet the requirements for the credit and identify the optimum credit quantity you can declare.
Documentation and Calculation: ERC filing services will help in gathering the required paperwork, such as payroll records and financial statements, to support your claim. They will likewise assist determine the credit quantity based upon qualified salaries and other qualifying expenditures.
Retroactive Claim Review: If you are qualified to declare the ERC for prior quarters, these companies can evaluate your past payroll records and financials to recognize prospective opportunities for retroactive credits. They can assist you amend previous income tax return to claim these refunds.
Filing Assistance: Companies concentrating on ERC filings will prepare and send the essential forms and paperwork on your behalf. This includes completing Form 941 or any other necessary tax forms.
Compliance and Updates: ERC guidelines and guidance have progressed with time. These companies stay upgraded with the latest changes and make sure that your filings abide by the most current guidelines. If the Internal revenue service requests extra details or performs an audit related to your ERC claim, they can also provide ongoing assistance.
It is necessary to research study and vet any company using ERC filing assistance to guarantee their credibility and competence. Look for established firms with experience in tax and payroll services, or think about connecting to trusted accounting firms or tax experts who use ERC submitting support.
Remember that while these companies can offer important assistance, it’s constantly a good concept to have a basic understanding of the ERC requirements and procedure yourself. This will help you make notified choices and make sure precise filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief steps. The goal of the ERC is to motivate businesses to retain and pay their employees during the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to eligible companies, including for-profit companies, tax-exempt organizations, and particular governmental entities. To qualify, employers should meet one of two requirements:.
The business operations were completely or partially suspended due to a government order related to COVID-19.
The business experienced a substantial decrease in gross invoices. As discussed previously, for 2021, a significant decrease is specified as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a substantial decline is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit amount is equal to a percentage (as much as 70%) of qualified salaries paid to staff members, including particular health plan expenditures. The maximum credit per employee 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 Protection Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 enables businesses to declare the ERC even if they received a PPP loan. Nevertheless, the exact same wages can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and boosted, permitting qualified companies to declare the credit for certified incomes paid as far back as March 13, 2020. This retroactive arrangement provides a chance for companies to amend prior-year income tax return and receive refunds.
Declaring the Credit: Employers can declare the ERC by reporting it on their work income tax return, generally Kind 941. The excess can be refunded to the employer if the credit goes beyond the quantity of work taxes owed.
It’s important to keep in mind that the ERC arrangements and eligibility criteria have evolved in time. The very best course of action is to consult with a tax professional or go to the main internal revenue service site for the most up-to-date and detailed information relating to the ERC, consisting of any recent legislative modifications or updates.
To qualify for the ERC, a business should fulfill one of the following criteria:.
Business operations were fully or partially suspended due to a federal government order related to COVID-19.
Business experienced a substantial decrease in gross receipts. For 2021, a considerable decrease is defined 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 receipts compared to the same quarter in 2019, or a 20% decline in gross invoices compared to the right away preceding quarter.
The ERC is readily available to companies of all sizes, including tax-exempt companies, but there are some exceptions. Government entities and businesses that got a PPP loan may have constraints on claiming the credit.
The procedure for claiming the ERC includes finishing the necessary kinds and consisting of the credit on your employment income tax return (generally Kind 941). The exact time it takes to process the credit can vary based upon several aspects, including the complexity of your company and the workload of the IRS. It’s suggested to seek advice from a tax expert for guidance specific to your situation.
There are a number of business that can assist with the process of declaring the ERC. Some well-known business that use support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the info supplied here is based on basic understanding and might not show the most current updates or changes to the ERC. It is necessary to speak with a tax professional or go to the main IRS site for the most updated and precise information regarding eligibility, claiming treatments, and offered help.
Less than 100. The credit is based if the employer had 100 or fewer staff members on average in 2019.
on salaries paid to all workers whether they really worked or not. To put it simply, 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 usually in 2019, then the credit is.
enabled just for salaries paid to staff members who did not work throughout the calendar quarter.
In both cases, “incomes” includes not just cash payments but likewise a portion of the expense of employer.
provided health care. Employee Retention Credit How Is It Paid
Companies can be right away repaid for the credit by lowering the amount of payroll taxes they.