Lets talk first about Employee Retention Credit In 2022 :
Our team here what do these people doing everyone in this space is assisting teach individuals about ERC and uh constantly offer a lovely breakfast and have individuals actually discover the program we should head to the room where we have the ability 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 actually Kevin numerous millions of dollars so these are replicate copies of the letters that go to clients confirming that the check is on the way I imply you know if you simply begin to take a look at some of these here I indicate this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s just I suggest think of how many actual clients 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 validated and the check is on the mail in the mail from the internal revenue service heading to the customer so that’s how you have the ability to track it you know when you
get this you understand the check is chosen sure and that’s when they pay so they do not pay anything till they really get the money they don’t pay bottom line Wonder trust anything until this letter is confirmed the check is on the method they transfer it into their checking account and they can truly trust Wonder trust that the process has actually been completed and the number of you believe you’ve processed considering that you began this we’re about 35 000 of these for
about six billion dollars wow so plainly they know what they’re doing and that’s what you need you need 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 speaking about something truly crucial today the employee retention credit which the majority of you have never ever heard of I certainly had not heard of it up until very recently and learned a lot about it since this is most likely the most affordable expense of capital for any small business anywhere
anytime if you have staff members between five and five hundred so I’ve got the professional with me this is Josh Fox he’s the creator and CEO of bottom line Concepts they’re the biggest processor of these ERC credits this is a 170 page program so it’s hard this isn’t like PPP we just contact your bank supervisor and state provide 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 representative for this I enjoy this program it’s disappearing soon you got to find out all 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 provided organizations three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everybody it makes a big distinction right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
remedy the money money payroll tax refund alright go on sorry I just have to make sure we got that point I suggest that’s a big difference a loan versus money money I like money 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 original cares Act is the ERC and yes Kevin it is a gorgeous tough check in the mail where you get actual cash from the IRS 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 individual needed 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 shareholders it’s for staff members right you had to have owned a service however it’s based upon you having W-2 workers 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 qualified so you have 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 6 quarters the program was open well stroll us through the six quarters so you had quarters two 3 and 4 of 2020 and you had quarters one two and 3 of 2021. fine so that’s how it’s measured you have to be on the W-2 throughout that duration now let’s talk my favorite part money just how much can you return per employee that was on a W-2 in those 6 quarters so the calculation in 2020 to be specific Kevin is 50 of the employee’s income to a maximum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers escalated to 70 of the employee’s income to a maximum of seven thousand per quarter how did that take place um they just altered the rules in.
2021 versus because the chaos 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 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 5 thousand in twenty twenty that’s twenty 6 thousand dollars per staff member that is because that’s a lot of money it is now there’s a caution here the PPP cash would need to be minimized from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would decrease the 26 000 so what we’re seeing usually Kevin is if you took PPP money somewhere around 10 thousand dollars a person so let’s state hypothetically you owned a dining establishment in New York City where I’m from and you had a hundred staff members and you took PPP money you would still get a million dollar in the mail from the IRS so it’s substantial clearly now the huge question is why does nobody learn about this since appearance when I first heard about this when I initially met Josh you understand I’ve got lots of 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 initially found out about this I called BS I do not 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 and that were well been worthy of and we utilized them carefully to stay alive during the pandemic so when I heard about this I said nah it can’t hold true however when I dug around I even called to my political leader buddies Guv Senators they didn’t learn about it I mean that’s how you understand that’s how misinformation is that there’s no details out there then a lot of individuals 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 understand about the worker retention credit you understand what’s fascinating you’re speaking about the banks Kevin since in the PPP loan process 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 big 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 process procedure that’s all um and here there was chaos due to the fact that remember in the original cares act you could refrain from doing both programs so if you had actually done PPP you might not do ERC in the original program and when they changed 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 know how to do this not really he or she’s never ever done it before 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 accounting professional no your accounting professional’s never done this before unless you have an account that went into this company and bottom line my firm Kevin has actually stayed in business since 2009 and we’ve been working with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 companies so a great deal of our big huge business customers have actually worked with bottom line to recover other government programs we’ve done sales tax and utilize tax joblessness tax work chance tax credits research and development tax credits unclaimed property property tax all of these other government programs.
The worker retention tax credit is a broad based refundable tax credit developed to motivate.
companies to keep staff members on their payroll. The credit is 50% of as much as $10,000 in earnings paid by an.
employer whose organization is fully or partially suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
1. The credit is offered to all employers no matter size including tax exempt companies. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
organizations who take Small Business Loans.
2. To qualify, the company has to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s business is totally or partly suspended by government order due to COVID-19.
during the calendar quarter or.
o the company’s gross receipts are listed below 50% of the similar quarter in 2019. Once the.
employer’s gross invoices go above 80% of a similar quarter in 2019 they no longer certify.
after completion of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the certifying salaries paid up to $10,000 in overall.
It is effective for earnings paid after March 13th and before December 31, 2020.
The meaning of qualifying salaries varies by whether a company had, usually, basically than.
100 employees in 2019.
Business that concentrate on ERC filing assistance typically offer know-how and assistance to assist businesses browse the intricate procedure of declaring the credit. They can provide numerous services, including:.
How is the employee retention credit calculated? Employee Retention Credit In 2022
Eligibility Assessment: These companies will assess your service’s eligibility for the ERC based on elements such as your industry, income, and operations. If you meet the requirements for the credit and identify the optimum credit quantity you can claim, they can assist figure out.
Documentation and Calculation: ERC filing services will assist in collecting the necessary documentation, such as payroll records and financial statements, to support your claim. They will also assist calculate the credit quantity based upon qualified incomes and other certifying expenses.
Retroactive Claim Review: If you are eligible to declare the ERC for prior quarters, these companies can evaluate your previous payroll records and financials to recognize prospective opportunities for retroactive credits. They can help you modify previous income tax return to declare these refunds.
Filing Assistance: Business 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 necessary tax return.
Compliance and Updates: ERC regulations and assistance have developed gradually. These companies remain updated with the latest changes and make sure that your filings abide by the most present guidelines. They can also provide ongoing support if the internal revenue service demands additional details or performs an audit related to your ERC claim.
It is necessary to research and vet any company offering ERC filing assistance to ensure their reliability and expertise. Search for recognized firms with experience in tax and payroll services, or think about reaching out to trusted accounting firms or tax specialists who provide ERC filing support.
Bear in mind that while these business can supply important support, it’s always an excellent concept to have a standard understanding of the ERC requirements and process yourself. This will assist you make informed choices and ensure accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief measures. The goal of the ERC is to motivate organizations to maintain and pay their workers during the pandemic, even if their operations have been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to qualified employers, including for-profit businesses, tax-exempt companies, and certain governmental entities. To certify, companies need to fulfill one of two criteria:.
Business operations were fully or partially suspended due to a government order related to COVID-19.
Business experienced a significant decrease in gross receipts. As mentioned previously, for 2021, a substantial decline is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decrease is specified as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decrease in gross receipts compared to the immediately preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit quantity amounts to a percentage (as much as 70%) of certified wages paid to staff members, consisting of specific 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, organizations that received a Paycheck Security Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 allows services to declare the ERC even if they got a PPP loan. The exact same incomes can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively expanded and improved, enabling qualified companies to claim the credit for certified wages paid as far back as March 13, 2020. This retroactive arrangement offers an opportunity for businesses to amend prior-year income tax return and get refunds.
Declaring the Credit: Employers can declare the ERC by reporting it on their work income tax return, generally Form 941. If the credit goes beyond the quantity of work taxes owed, the excess can be refunded to the company.
It is essential to note that the ERC provisions and eligibility requirements have actually developed over time. The very best course of action is to speak with a tax expert or go to the official internal revenue service site for the most comprehensive and up-to-date information concerning the ERC, consisting of any current legal changes or updates.
To get approved for the ERC, an organization needs to fulfill among the following requirements:.
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. For 2021, a considerable decrease is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decrease in gross receipts compared to the right away preceding quarter.
The ERC is available to services of all sizes, including tax-exempt organizations, but there are some exceptions. For instance, government entities and companies that received a PPP loan might have restrictions on declaring the credit.
The procedure for claiming the ERC includes completing the necessary forms and consisting of the credit on your employment tax return (typically Type 941). The exact time it takes to process the credit can vary based on several factors, consisting of the intricacy of your company and the workload of the IRS. It’s advised to speak with a tax professional for assistance particular to your situation.
There are a number of companies that can help with the process of declaring the ERC. Some popular companies that use help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the information offered here is based on general understanding and might not reflect the most recent updates or changes to the ERC. It is very important to consult with a tax professional or go to the main IRS site for the most accurate and up-to-date information relating to eligibility, declaring treatments, and available help.
Less than 100. If the employer had 100 or fewer employees usually in 2019, then the credit is based.
on salaries paid to all staff members whether they in fact worked or not. Simply put, even if the.
workers worked full time and earned money for full-time work, the company still gets the credit.
Greater than 100. The credit is if the company had more than 100 employees on average in 2019.
enabled just for salaries paid to workers who did not work throughout the calendar quarter.
In both cases, “earnings” includes not just cash payments but likewise a portion of the cost of company.
offered healthcare. Employee Retention Credit In 2022
Companies can be immediately reimbursed for the credit by minimizing the quantity of payroll taxes they.