Lets talk first about Employee Retention Credit How To Calculate :
Our team here what do these people doing everyone in this room is helping teach individuals about ERC and uh constantly offer a gorgeous breakfast and have individuals truly learn more about the program we should head to the space where we are able to display a few of the checks that we are getting for business and I wish to see that what is this this is uh numerous countless dollars literally Kevin hundreds of millions of dollars so these are duplicate copies of the letters that go to customers validating that the check is on the method I indicate you know if you simply start to take a look at some of these here I mean 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 the number of real 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 verified 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
receive this you know the check is chosen sure and that’s when they pay so they don’t pay anything till they actually receive the cash they don’t pay bottom line Wonder trust anything until this letter is validated the check is on the method they deposit it into their checking account and they can genuinely trust Wonder trust that the procedure has been finished and how many you think you have actually processed given that you began this we’re about 35 000 of these for
about six billion dollars wow so clearly they understand what they’re doing which’s what you require you require 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 speaking about something actually important today the staff member retention credit which most of you have never become aware of I definitely hadn’t become aware of it until very recently and learned a lot about it due to the fact that this is most likely the most affordable cost of capital for any small business anywhere
anytime if you have employees between five and five hundred so I’ve got the expert 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 difficult this isn’t like PPP we simply contact your bank supervisor and state give 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 spokesperson for this I enjoy this program it’s going away very soon you got to learn everything about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply begin 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 everyone it makes a big distinction right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the money cash payroll tax refund okay go on sorry I just have to ensure we got that point I suggest that’s a huge distinction a loan versus money cash I like money money that’s what we’re discussing okay 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 stunning tough check in the mail where you get actual cash 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 staff member 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 people on the cap table not for shareholders it’s for staff members right you needed to have actually owned a business but it’s based upon you having W-2 staff members 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 need 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 appropriate so there were six quarters the program was open well walk us through the 6 quarters so you had quarters two 3 and four of 2020 and you had quarters one 2 and three of 2021. fine so that’s how it’s measured you need to be on the W-2 throughout that duration now let’s talk my favorite part money how much can you get back per staff member that was on a W-2 in those six quarters so the estimation in 2020 to be specific Kevin is 50 of the employee’s salary to an optimum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers escalated to 70 of the staff member’s wage to an optimum of seven thousand per quarter how did that occur um they simply changed the rules in.
2021 versus because 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 approximately five thousand Max and after that what occurs 21 000 Max in 2021 oh that’s how you create 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 because that’s a great deal of money it is now there’s a caution here the PPP cash would need to be minimized 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 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 workers and you took PPP money you would still get a million dollar in the mail from the internal revenue service so it’s big undoubtedly now the huge concern is why does nobody learn about this because look when I initially found out about this when I initially met Josh you understand I have actually got lots of investments in lots of business I’m a significant supporter for entrepreneurship in America and make many many investments in business owners of which lots of suffered through the pandemic when I initially heard about this I called BS I do not believe it due to the fact that I utilize 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 been worthy of and we used them wisely to survive during the pandemic so when I found out about this I stated nah it can’t be true however when I dug around I even contacted us to my politician pals Guv Senators they didn’t understand about it I indicate that’s how you understand that’s how false information is that there’s no information out there then a bunch of people told me well you can’t get it due to the fact that you took the PPP likewise not true so let’s ask Josh why does no one know about the staff member retention credit you understand what’s intriguing you’re discussing the banks Kevin since 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 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 procedure procedure that’s all um and here there was turmoil because keep in mind in the initial cares act you could not do both programs so if you had 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 because it’s not alone so you’re getting a tax refund so the government never ever made it clear to any person about how to.
do this does your CFO understand how to do this not truly she or he’s never ever done it previously do the banks do it nope the banks do not 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 went into this company and bottom line my company Kevin has actually stayed in business since 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 business clients have actually worked with bottom line to recuperate other government programs we have actually done sales tax and utilize tax joblessness tax work chance tax credits research and development tax credits unclaimed property real estate tax all of these other government programs.
The staff member retention tax credit is a broad based refundable tax credit designed to encourage.
companies to keep staff members on their payroll. The credit is 50% of as much as $10,000 in salaries paid by an.
Because of COVID-19 or whose gross receipts, employer whose business is totally or partially suspended.
decline by more than 50%.
1. The credit is readily 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) small.
companies who take Small Business Loans.
2. To qualify, the company needs to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s organization is fully or partly suspended by government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross receipts are below 50% of the equivalent quarter in 2019. As soon as the.
company’s gross invoices go above 80% of a similar quarter in 2019 they no longer qualify.
after the end of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the qualifying incomes paid up to $10,000 in overall.
It works for incomes paid after March 13th and before December 31, 2020.
The meaning of qualifying salaries differs by whether a company had, usually, more or less than.
100 workers in 2019.
Business that specialize in ERC filing assistance typically offer knowledge and support to assist services navigate the complex procedure of declaring the credit. They can provide various services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit How To Calculate
Eligibility Evaluation: These business will evaluate your organization’s eligibility for the ERC based on aspects such as your industry, income, and operations. They can assist figure out if you fulfill the requirements for the credit and determine the optimum credit amount you can claim.
Paperwork and Estimation: ERC filing services will help in collecting the essential documents, such as payroll records and monetary statements, to support your claim. They will also assist compute the credit quantity based upon eligible earnings and other qualifying costs.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for previous quarters, these business can review your previous payroll records and financials to identify potential chances for retroactive credits. They can help you change previous income tax return to claim these refunds.
Filing Assistance: Companies focusing on ERC filings will prepare and send the required types and paperwork on your behalf. This includes completing Kind 941 or any other necessary tax return.
Compliance and Updates: ERC guidelines and guidance have actually developed with time. These companies stay updated with the latest modifications and guarantee that your filings comply with the most current standards. They can likewise provide continuous support if the internal revenue service requests additional details or performs an audit related to your ERC claim.
It is very important to research study and veterinarian any company providing ERC filing help to guarantee their trustworthiness and knowledge. Try to find recognized companies with experience in tax and payroll services, or think about connecting to trusted accounting companies or tax professionals who provide ERC submitting support.
Bear in mind that while these business can provide important help, it’s always a great concept to have a basic understanding of the ERC requirements and procedure yourself. This will help you make informed choices and guarantee precise filings.
The Staff Member 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 motivate companies 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 eligible companies, consisting of for-profit services, tax-exempt companies, and particular governmental entities. To certify, companies should satisfy one of two criteria:.
Business operations were totally or partly suspended due to a government order related to COVID-19.
Business experienced a significant decline in gross receipts. As mentioned previously, for 2021, a considerable decrease is specified as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decrease 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 amount is equal to a percentage (as much as 70%) of qualified earnings paid to staff members, including certain health plan costs. The maximum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, services that received an Income Security Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 permits businesses to declare the ERC even if they got a PPP loan. However, the same wages can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and boosted, enabling eligible employers to claim the credit for qualified incomes paid as far back as March 13, 2020. This retroactive arrangement offers a chance for businesses to change prior-year tax returns and receive refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their work tax returns, normally Form 941. The excess can be refunded to the company if the credit goes beyond the quantity of work taxes owed.
It is necessary to keep in mind that the ERC arrangements and eligibility criteria have developed in time. The very best course of action is to consult with a tax expert or visit the official IRS site for the most detailed and up-to-date information relating to the ERC, consisting of any current legislative modifications or updates.
To receive the ERC, an organization should meet among the following requirements:.
The business operations were totally or partially suspended due to a government order related to COVID-19.
Business experienced a significant decrease in gross invoices. For 2021, a substantial decline is specified as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the right away preceding quarter.
The ERC is offered to companies of all sizes, including tax-exempt companies, however there are some exceptions. Federal government entities and services that received a PPP loan might have restrictions on claiming the credit.
The process for claiming the ERC includes completing the essential types and including the credit on your work income tax return (usually Form 941). The exact time it takes to process the credit can vary based upon numerous factors, consisting of the intricacy of your company and the workload of the IRS. It’s suggested to talk to a tax professional for guidance specific to your situation.
There are a number of business that can help 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 info supplied here is based on basic knowledge and may not show the most recent updates or changes to the ERC. It is essential to seek advice from a tax professional or go to the official internal revenue service website for the most accurate and current information relating to eligibility, declaring procedures, and readily available support.
Less than 100. If the employer had 100 or fewer staff members typically in 2019, then the credit is based.
on earnings paid to all employees whether they actually worked or not. In other words, even if the.
workers 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 employees usually in 2019, then the credit is.
permitted just for earnings paid to staff members who did not work throughout the calendar quarter.
In both cases, “earnings” consists of not simply cash payments however likewise a portion of the cost of employer.
provided healthcare. Employee Retention Credit How To Calculate
Companies can be right away reimbursed for the credit by lowering the amount of payroll taxes they.