Lets talk first about Employee Retention Credit Hurricane Harvey :
Our group here what do these guys doing everyone in this space is helping teach people about ERC and uh always provide a stunning breakfast and have individuals truly find out about the program we ought to head to the room where we have the ability to show a few of the checks that we are getting for companies and I wish to see that what is this this is uh hundreds of countless dollars actually Kevin numerous countless dollars so these are replicate copies of the letters that go to customers verifying that the check is on the method I imply you know if you simply begin to look at some of these here I imply this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s just I imply think about 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 validated and the check is on the mail in the mail from the internal revenue service heading to the consumer 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 until they actually receive the cash they do not pay bottom line Wonder trust anything until this letter is validated the check is on the way they transfer it into their savings account and they can genuinely rely on Wonder trust that the procedure has actually been completed and how many you think you’ve processed since 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 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 Terrific here you’re at my YouTube channel we’re talking about something really crucial today the staff member retention credit which most of you have never heard of I certainly had not become aware of it till extremely just recently and found out a lot about it because this is most likely the most affordable cost of capital for any small business anywhere
anytime if you have workers in between 5 and five hundred so I’ve got the specialist 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 challenging this isn’t like PPP we just phone your bank manager and state 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’ve ended up being yes the Ambassador and paid spokesperson for this I love this program it’s disappearing very soon you got to find out all about it let’s talk worker 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 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody it makes a huge distinction 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 suggest that’s a huge distinction a loan versus cash money I like money 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 original cares Act is the ERC and yes Kevin it is a beautiful hard check in the mail where you get real money from the internal revenue service all right so let’s discuss how it works because it seems like to me if it’s a if it’s worker retention credit that person had 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 investors it’s for workers 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 workers 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 very first 6 months of 2021 on the W-2 right so there were six quarters the program was open well stroll us through the six quarters so you had quarters two three and 4 of 2020 and you had quarters one 2 and 3 of 2021. okay 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 get back per worker that was on a W-2 in those 6 quarters so the computation in 2020 to be specific Kevin is 50 of the worker’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 worker’s income to a maximum of seven thousand per quarter how did that happen um they just altered the rules in.
2021 versus due to the fact that 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 as much as 5 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 worker that is since that’s a lot of cash it is now there’s a caution here the PPP money would have to be decreased from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would decrease the 26 000 so what we’re seeing usually Kevin is if you took PPP money someplace around 10 thousand dollars a person so let’s state 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 IRS so it’s huge obviously now the big question is why does nobody learn about this because appearance when I first became aware of this when I initially fulfilled Josh you understand I’ve got great deals of investments in lots of companies I’m a major advocate for entrepreneurship in America and make numerous lots of investments in entrepreneurs of which lots of suffered through the pandemic when I initially found out about this I called BS I don’t think it due to the fact that I use the PPP we went through the cash center Banks to get it it was extremely 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 found out about this I said nah it can’t be true however when I dug around I even contacted us to my political leader pals Guv Senators they didn’t understand about it I suggest that’s how you know that’s how misinformation is that there’s no details out there then a bunch 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 nobody understand about the employee retention credit you understand what’s fascinating you’re talking about the banks Kevin because in the PPP loan procedure the federal government made it really 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 procedure 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 chaos due to the fact that keep in mind in the initial cares act you might refrain from doing both programs so if you had done PPP you might not do 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 federal government never made it clear to anybody about how to.
do this does your CFO understand how to do this not truly he or she’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 accountant no your accounting professional’s never done this before unless you have an account that went into this organization and bottom line my company Kevin has actually been in business considering that 2009 and we have actually been dealing with the federal government and the state government to recuperate money for Fortune 500 Fortune 1000 companies so a great deal of our huge big corporate customers have dealt with bottom line to recover other government programs we have actually done sales tax and use tax joblessness tax work chance tax credits research and development tax credits unclaimed property property 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 employees on their payroll. The credit is 50% of up to $10,000 in salaries paid by an.
employer whose service is fully or partially suspended because of COVID-19 or whose gross invoices.
decrease by more than 50%.
1. The credit is readily available to all employers no matter size including tax exempt organizations. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
businesses who take Small Business Loans.
2. To certify, the company has to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s organization is totally or partially suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross invoices are below 50% of the comparable quarter in 2019. As soon as the.
employer’s gross invoices exceed 80% of a comparable quarter in 2019 they no longer qualify.
after the end of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the qualifying earnings paid up to $10,000 in total.
It works for earnings paid after March 13th and prior to December 31, 2020.
The definition of certifying incomes varies by whether a company had, typically, more or less than.
100 employees in 2019.
Business that focus on ERC filing assistance usually supply proficiency and assistance to help services navigate the complicated procedure of claiming the credit. They can use different services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Hurricane Harvey
Eligibility Assessment: These business will examine your service’s eligibility for the ERC based upon aspects such as your industry, income, and operations. If you meet the requirements for the credit and identify the maximum credit quantity you can claim, they can assist identify.
Documentation and Estimation: ERC filing services will assist in gathering the required documents, such as payroll records and monetary statements, to support your claim. They will likewise help determine the credit quantity based upon qualified wages and other qualifying expenditures.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for previous quarters, these companies can examine your past payroll records and financials to determine potential chances for retroactive credits. They can help you amend prior tax returns to claim these refunds.
Filing Assistance: Business specializing in ERC filings will prepare and send the essential forms and documentation in your place. This consists of completing Kind 941 or any other necessary tax forms.
Compliance and Updates: ERC guidelines and assistance have actually developed gradually. These business stay updated with the current changes and guarantee that your filings comply with the most current guidelines. If the Internal revenue service requests additional information or performs an audit related to your ERC claim, they can likewise supply ongoing assistance.
It is essential to research and veterinarian any company providing ERC filing assistance to guarantee their trustworthiness and know-how. Search for established companies with experience in tax and payroll services, or think about reaching out to relied on accounting companies or tax specialists who use ERC filing support.
Keep in mind that while these companies can supply valuable help, it’s always an excellent idea to have a fundamental understanding of the ERC requirements and process yourself. This will help you make informed choices and ensure precise filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief procedures. The goal of the ERC is to motivate services to maintain and pay their employees during the pandemic, even if their operations have been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to eligible companies, including for-profit services, tax-exempt organizations, and specific governmental entities. To qualify, companies must meet one of two requirements:.
The business operations were fully or partly suspended due to a federal government order related to COVID-19.
Business experienced a substantial decline in gross receipts. As discussed earlier, for 2021, a considerable decrease is defined as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019, or a 20% decline in gross invoices compared to the immediately preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount amounts to a portion (as much as 70%) of qualified incomes paid to employees, including 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: At first, companies that received an Income Defense Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 allows businesses to claim the ERC even if they received a PPP loan. However, the exact same incomes can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and enhanced, permitting eligible employers to claim the credit for qualified salaries paid as far back as March 13, 2020. This retroactive provision offers an opportunity for companies to modify prior-year income tax return and receive refunds.
Declaring the Credit: Employers can declare the ERC by reporting it on their employment income tax return, usually Kind 941. The excess can be refunded to the employer if the credit goes beyond the quantity of work taxes owed.
It is very important to note that the ERC arrangements and eligibility criteria have actually progressed in time. The very best strategy is to consult with a tax expert or check out the main IRS website for the most comprehensive and current info concerning the ERC, consisting of any current legislative modifications or updates.
To get approved for the ERC, a business needs to fulfill one of the following criteria:.
The business operations were completely or partially suspended due to a federal government order related to COVID-19.
Business experienced a considerable decrease in gross invoices. For 2021, a significant decrease is specified as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
The ERC is available to organizations of all sizes, including tax-exempt companies, but there are some exceptions. Government entities and services that received a PPP loan may have limitations on declaring the credit.
The procedure for declaring the ERC involves finishing the necessary forms and consisting of the credit on your employment tax return (typically Type 941). The exact time it requires to process the credit can vary based on a number of aspects, consisting of the intricacy of your business and the workload of the IRS. It’s advised to seek advice from a tax expert for assistance specific to your situation.
There are a number of business that can help with the procedure of declaring the ERC. These consist of accounting firms, tax advisory services, and payroll provider. Some well-known business that offer assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research and call these business straight to inquire about their services and fees.
Please keep in mind that the details offered here is based on basic knowledge and might not show the most recent updates or changes to the ERC. It is necessary to consult with a tax professional or check out the official internal revenue service site for the most precise and updated info regarding eligibility, declaring procedures, and available help.
Less than 100. If the company had 100 or fewer workers usually in 2019, then the credit is based.
on incomes paid to all employees whether they in fact worked or not. In other words, even if the.
workers worked full-time and got paid for full time work, the employer still gets the credit.
Greater than 100. The credit is if the employer had more than 100 employees on average in 2019.
allowed only for wages paid to workers who did not work during the calendar quarter.
In both cases, “incomes” consists of not simply money payments but also a portion of the cost of company.
supplied health care. Employee Retention Credit Hurricane Harvey
Companies can be instantly compensated for the credit by reducing the amount of payroll taxes they.