Lets talk first about Employee Retention Credit Interest Income :
Our group here what do these people doing everyone in this room is helping teach people about ERC and uh always provide a stunning breakfast and have individuals really find out about the program we should head to the room where we have the ability to display a few of the checks that we are getting for business and I want to see that what is this this is uh numerous countless dollars actually Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to clients validating that the check is on the way I mean 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 indicate it’s just I imply think of the number of actual clients that went through the program yeah this is the very end this is the celebration at the end when the check is confirmed the numbers are verified 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 understand when you
receive this you know the check is gone for sure and that’s when they pay so they do not pay anything up until they actually get the money they don’t pay bottom line Wonder trust anything till this letter is verified the check is on the way they transfer it into their savings account and they can really trust Wonder trust that the process has been finished and how many you believe you’ve processed because you began this we’re about 35 000 of these for
about 6 billion dollars wow so plainly they know what they’re doing which’s what you need you require professionals 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 Fantastic here you’re at my YouTube channel we’re discussing something actually essential today the employee retention credit which most of you have never heard of I certainly hadn’t become aware of it until really just recently and found out a lot about it because this is probably the most affordable cost 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 largest processor of these ERC credits this is a 170 page program so it’s challenging this isn’t like PPP we just contact your bank supervisor and say give me a loan it does not 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 love this program it’s disappearing very 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 begin there so throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act provided companies three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everybody it makes a huge distinction right there 2 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 all right go on sorry I just need to make certain we got that point I suggest that’s a big difference a loan versus cash cash I like money money 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 difficult check in the mail where you get real cash from the internal revenue service all right so let’s discuss how it works since it seems like to me if it’s a if it’s worker retention credit that person had to be an employee so I’m going to make the Presumption this cash is not for the owner not for people on the cap table not for shareholders it’s for workers right you needed to have actually owned a company however it’s based on you having W-2 employees in America not 10.99. As long as you had W-2 staff members 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 six months of 2021 on the W-2 appropriate so there were 6 quarters the program was open well stroll us through the 6 quarters so you had quarters two three and 4 of 2020 and you had quarters one two and three of 2021. alright so that’s how it’s measured you have to be on the W-2 during that period now let’s talk my preferred part cash just how much can you get back per staff member that was on a W-2 in those six quarters so the calculation in 2020 to be exact Kevin is 50 of the staff member’s wage to a maximum of 5 thousand dollars per staff member for the year of 2020 and in 2021 the numbers escalated to 70 of the staff member’s salary to an optimum of seven thousand per quarter how did that take place um they simply changed the rules in.
2021 versus since the turmoil of the pandemic so they wished 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 as much as five thousand Max and then what takes place 21 000 Max in 2021 oh that’s how you develop twenty 6 thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty 6 thousand dollars per employee that is because that’s a lot of money it is now there’s a caveat here the PPP money would need 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 typically Kevin is if you took PPP cash someplace around ten thousand dollars a person so let’s say hypothetically you owned a restaurant in New York 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 internal revenue service so it’s huge clearly now the huge concern is why does no one know about this since look when I initially became aware of this when I initially met Josh you understand I have actually got lots of investments in lots of companies I’m a significant supporter for entrepreneurship in America and make many numerous financial investments in business owners of which lots of suffered through the pandemic when I initially found out 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 sensibly to survive during the pandemic so when I heard about this I said nah it can’t be true but when I dug around I even called to my politician good friends Guv Senators they didn’t understand about it I imply that’s how you know that’s how misinformation is that there’s no details 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 real so let’s ask Josh why does nobody know about the worker retention credit you know what’s interesting you’re speaking about the banks Kevin because in the PPP loan process 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 huge 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 process procedure that’s all um and here there was chaos due to the fact that keep in mind in the original cares act you could not do both programs so if you had actually done PPP you might refrain from doing ERC in the initial program and when they altered the law in 2021 the banks were not 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 know how to do this not really she or he’s never done it in the past do the banks do it nope the banks don’t do it the payroll companies yeah a few of them are doing it as a payroll company your accountant no your accountant’s never done this prior to unless you have an account that went into this business and bottom line my company Kevin has actually been in business because 2009 and we have actually been working with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 companies so a great deal of our huge big corporate clients have worked with bottom line to recuperate 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 employee retention tax credit is a broad based refundable tax credit developed to motivate.
employers to keep employees on their payroll. The credit is 50% of up to $10,000 in earnings paid by an.
Because of COVID-19 or whose gross receipts, employer whose company is fully or partly suspended.
decline by more than 50%.
1. The credit is offered to all employers no matter size including tax exempt companies. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) small.
services who take Small Business Loans.
2. To certify, the company has to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s company is fully or partially 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 equivalent quarter in 2019. Once the.
employer’s gross receipts go above 80% of a comparable quarter in 2019 they no longer qualify.
after the end of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the qualifying incomes paid up to $10,000 in overall.
It is effective for wages paid after March 13th and before December 31, 2020.
The meaning of qualifying earnings varies by whether a company had, on average, basically than.
100 employees in 2019.
Companies that focus on ERC filing help generally offer competence and support to help businesses browse the complicated procedure of declaring the credit. They can use numerous services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Interest Income
Eligibility Evaluation: These business will examine your business’s eligibility for the ERC based upon factors such as your market, income, and operations. They can assist determine if you meet the requirements for the credit and determine the optimum credit amount you can declare.
Documentation and Computation: ERC filing services will assist in collecting the necessary paperwork, such as payroll records and financial statements, to support your claim. They will also assist compute the credit quantity based on qualified earnings and other qualifying costs.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for prior quarters, these business can examine your past payroll records and financials to identify potential chances for retroactive credits. They can assist you amend prior income tax return to claim these refunds.
Filing Help: Business focusing on ERC filings will prepare and submit the necessary kinds and paperwork in your place. This consists of completing Kind 941 or any other required tax forms.
Compliance and Updates: ERC regulations and guidance have actually progressed in time. These companies remain updated with the current changes and ensure that your filings adhere to the most present standards. If the Internal revenue service requests additional info or performs an audit associated to your ERC claim, they can also offer continuous support.
It is necessary to research and veterinarian any company providing ERC filing help to ensure their credibility and know-how. Look for recognized firms with experience in tax and payroll services, or consider connecting to relied on accounting companies or tax experts who provide ERC submitting support.
Keep in mind that while these companies can supply valuable assistance, it’s constantly a good idea to have a fundamental understanding of the ERC requirements and process yourself. This will help you make informed decisions and ensure precise filings.
The Worker 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 encourage services to maintain and pay their employees during the pandemic, even if their operations have actually been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to qualified employers, including for-profit companies, tax-exempt companies, and specific governmental entities. To certify, companies need to satisfy one of two criteria:.
Business operations were fully or partially suspended due to a government order related to COVID-19.
Business experienced a considerable decrease in gross receipts. As pointed out previously, for 2021, a significant decrease is defined as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decline in gross invoices compared to the very same quarter in 2019, or a 20% decline 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 quantity amounts to a portion (as much as 70%) of qualified incomes paid to staff members, consisting of particular health insurance costs. The optimum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, organizations that received a Paycheck Protection Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 allows organizations to declare the ERC even if they got a PPP loan. The same wages can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively broadened and enhanced, enabling qualified employers to claim the credit for qualified salaries paid as far back as March 13, 2020. This retroactive arrangement offers a chance for services to amend prior-year tax returns and receive refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their work income tax return, typically Kind 941. If the credit surpasses the quantity of work taxes owed, the excess can be refunded to the employer.
It is necessary to note that the ERC arrangements and eligibility criteria have progressed in 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 current and comprehensive details relating to the ERC, consisting of any current legal modifications or updates.
To get approved for the ERC, a service should meet among the following requirements:.
The business operations were fully or partially suspended due to a government order related to COVID-19.
Business experienced a substantial decrease in gross receipts. For 2021, a considerable decrease is specified as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decline is specified as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decline in gross invoices compared to the instantly preceding quarter.
The ERC is offered to services of all sizes, including tax-exempt organizations, however there are some exceptions. For example, federal government entities and services that got a PPP loan might have limitations on declaring the credit.
The process for declaring the ERC involves finishing the required kinds and consisting of the credit on your work income tax return (typically Kind 941). The exact time it requires to process the credit can differ based on several factors, including the complexity of your company and the work of the internal revenue service. It’s suggested to consult with a tax professional for guidance specific to your scenario.
There are a number of companies that can help with the procedure of declaring the ERC. These consist of accounting firms, tax advisory services, and payroll service providers. Some popular business that offer assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research study and call these companies straight to inquire about their services and costs.
Please keep in mind that the info provided here is based upon general understanding and may not reflect the most recent updates or modifications to the ERC. It is very important to consult with a tax expert or go to the official internal revenue service site for the most accurate and up-to-date information relating to eligibility, declaring procedures, and readily available assistance.
Less than 100. If the company had 100 or fewer staff members typically in 2019, then the credit is based.
on salaries paid to all workers whether they in fact worked or not. Simply put, even if the.
workers worked full-time and earned money for full-time work, the employer still gets the credit.
Greater than 100. The credit is if the employer had more than 100 workers on average in 2019.
permitted only for incomes paid to workers who did not work throughout the calendar quarter.
In both cases, “wages” consists of not simply cash payments however likewise a part of the cost of employer.
provided health care. Employee Retention Credit Interest Income
Companies can be right away compensated for the credit by minimizing the amount of payroll taxes they.