Lets talk first about Employee Retention Credit Less Than 5 Employees :
Our team here what do these men doing everybody in this space is helping teach individuals about ERC and uh constantly provide a beautiful breakfast and have individuals truly discover the program we need to head to the space 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 numerous countless dollars literally Kevin hundreds of countless dollars so these are replicate copies of the letters that go to customers validating that the check is on the way I indicate you know if you just 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 mean it’s just I indicate consider the number of real clients that went through the program yeah this is the very end this is the celebration at the end when the check is validated the numbers are confirmed and the check is on the mail in the mail from the IRS heading to the client so that’s how you have the ability to track it you understand when you
get this you understand the check is chosen sure and that’s when they pay so they don’t pay anything up until they in fact get the cash they don’t pay bottom line Wonder trust anything until this letter is verified the check is on the way they deposit it into their bank account and they can genuinely trust Wonder trust that the procedure has actually been finished and how many you think you have actually processed since you started this we have to do with 35 000 of these for
about six billion dollars wow so plainly they understand what they’re doing which’s what you require you require specialists 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 actually important today the worker retention credit which the majority of you have never heard of I definitely hadn’t become aware of it up until extremely recently and learned a lot about it due to the fact that this is probably the lowest cost of capital for any small business anywhere
anytime if you have employees between five 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 not easy this isn’t like PPP we just contact your bank supervisor and say offer me a loan it does not work there’s not a loan it’s an application and Josh is going to inform all of us about it and how to get it and why I’ve become yes the Ambassador and paid representative for this I love this program it’s going away soon you got to discover everything about it let’s talk employee retention credit Josh Fox what is an ERC let’s just begin there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act provided services 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 huge distinction right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the cash cash payroll tax refund okay go on sorry I simply need to ensure we got that point I indicate that’s a huge difference a loan versus money money I like money money that’s what we’re speaking 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 initial cares Act is the ERC and yes Kevin it is a beautiful tough check in the mail where you get real money from the internal revenue service all right so let’s discuss how it works since it sounds like to me if it’s a if it’s staff member retention credit that individual needed to be a worker 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 needed to have actually owned a business 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 very first six months of 2021 on the W-2 right so there were 6 quarters the program was open well stroll us through the 6 quarters so you had quarters 2 three and four 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 during that period now let’s talk my favorite part money just how much can you return per staff member that was on a W-2 in those six quarters so the computation in 2020 to be precise Kevin is 50 of the staff member’s income to an optimum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers escalated to 70 of the staff member’s income to an optimum of seven thousand per quarter how did that occur um they just 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 approximately five thousand Max and after that what takes place 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 employee that is since that’s a great deal of cash 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 decrease the 26 000 so what we’re seeing typically Kevin is if you took PPP cash somewhere around ten thousand dollars a person so let’s say hypothetically you owned a restaurant 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 substantial clearly now the huge concern is why does nobody understand about this since look when I initially became aware of this when I initially 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 numerous financial investments in entrepreneurs of which lots of suffered through the pandemic when I initially found out about this I called BS I do not believe it since I utilize the PPP we went through the cash 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 deserved and we used them sensibly to stay alive during the pandemic so when I heard about this I stated nah it can’t be true however when I dug around I even contacted us to my political leader pals Governor Senators they didn’t learn about it I indicate that’s how you know that’s how false information is that there’s no information out there then a lot of individuals told me well you can’t get it because you took the PPP also not real so let’s ask Josh why does nobody learn about the worker retention credit you know what’s intriguing you’re speaking about the banks Kevin due to the fact that in the PPP loan procedure the federal government made it very 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 procedure process that’s all um and here there was mayhem due to the fact that remember in the original cares act you might refrain from doing both programs so if you had actually done PPP you could not do ERC in the initial program and when they changed the law in 2021 the banks were refraining from doing ERC due to the fact that 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 actually he or she’s never 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 accounting professional no your accountant’s never done this prior to unless you have an account that went into this service and bottom line my firm Kevin has stayed in business given that 2009 and we have actually been working with the federal government and the state government to recuperate money for Fortune 500 Fortune 1000 companies so a great deal of our huge huge corporate clients have worked with bottom line to recover other federal government programs we’ve done sales tax and utilize tax unemployment tax work opportunity tax credits research and development tax credits unclaimed property property 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 workers on their payroll. The credit is 50% of approximately $10,000 in salaries paid by an.
employer whose company is totally or partially suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
Schedule.
1. The credit is readily available to all companies no matter size including tax exempt organizations. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) little.
services who take Small company Loans.
2. To certify, the company has to fulfill one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s company is totally or partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross invoices are below 50% of the similar quarter in 2019. As soon as the.
company’s gross invoices exceed 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 qualifying wages paid up to $10,000 in overall.
It works for earnings paid after March 13th and before December 31, 2020.
The meaning of certifying salaries differs by whether an employer had, usually, more or less than.
100 staff members in 2019.
Business that specialize in ERC filing assistance normally provide expertise and assistance to help businesses browse the complicated procedure of declaring the credit. They can offer various services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Less Than 5 Employees
Eligibility Assessment: These companies will evaluate your service’s eligibility for the ERC based upon factors such as your industry, earnings, and operations. If you meet the requirements for the credit and identify the maximum credit quantity you can claim, they can assist figure out.
Paperwork and Estimation: ERC filing services will help in gathering the required documentation, such as payroll records and financial statements, to support your claim. They will likewise help calculate the credit amount based upon qualified salaries and other certifying expenses.
Retroactive Claim Evaluation: If you are eligible to claim the ERC for prior quarters, these companies can review your previous payroll records and financials to determine prospective chances for retroactive credits. They can assist you change previous income tax return to claim these refunds.
Filing Help: Companies concentrating on ERC filings will prepare and send the necessary forms and documentation on your behalf. This includes completing Kind 941 or any other required tax return.
Compliance and Updates: ERC regulations and guidance have actually progressed in time. These companies stay upgraded with the current modifications and guarantee that your filings adhere to the most existing standards. If the IRS demands additional info or performs an audit associated to your ERC claim, they can likewise offer continuous support.
It is essential to research and veterinarian any company using ERC filing support to guarantee their trustworthiness and know-how. Search for established companies with experience in tax and payroll services, or think about reaching out to trusted accounting firms or tax specialists who use ERC filing support.
Keep in mind that while these companies can offer valuable support, it’s always a great concept to have a fundamental understanding of the ERC requirements and process yourself. This will help you make informed decisions and make sure accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief measures. The goal of the ERC is to encourage companies 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 available to qualified employers, including for-profit businesses, tax-exempt companies, and specific governmental entities. To certify, employers should meet one of two requirements:.
The business operations were fully or partially suspended due to a federal government order related to COVID-19.
The business experienced a significant decrease in gross receipts. As pointed out previously, for 2021, a considerable decline is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decline in gross receipts compared to the exact same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit amount amounts to a portion (up to 70%) of qualified incomes paid to employees, consisting of particular health plan 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, businesses that got an Income Protection Program (PPP) loan were not eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 allows organizations to declare the ERC even if they got a PPP loan. Nevertheless, the very 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 enhanced, permitting qualified companies to declare the credit for certified incomes paid as far back as March 13, 2020. This retroactive provision provides an opportunity for businesses to change prior-year income tax return and get refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their employment income tax return, usually Kind 941. If the credit goes beyond the quantity of work taxes owed, the excess can be reimbursed to the employer.
It is very important to note that the ERC provisions and eligibility requirements have developed gradually. The very best strategy is to speak with a tax expert or visit the official IRS site for the most current and in-depth details concerning the ERC, including any current legal changes or updates.
To qualify for the ERC, a service needs to fulfill one of the following criteria:.
The business operations were completely or partly suspended due to a federal government order related to COVID-19.
The business experienced a significant decrease in gross invoices. 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 decrease is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019, or a 20% decrease in gross receipts compared to the immediately preceding quarter.
The ERC is offered to organizations of all sizes, consisting of tax-exempt organizations, but there are some exceptions. Government entities and companies that received a PPP loan may have limitations on declaring the credit.
The process for declaring the ERC includes completing the essential forms and consisting of the credit on your employment tax return (generally Form 941). The exact time it takes to process the credit can vary based upon numerous factors, including the complexity of your organization and the work of the IRS. It’s suggested to seek advice from a tax professional for assistance particular to your scenario.
There are several business that can help with the process of declaring the ERC. Some popular companies that use support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the details provided here is based upon general knowledge and may not reflect the most recent updates or modifications to the ERC. It’s important to talk to a tax expert or check out the official internal revenue service website for the most precise and updated info concerning eligibility, declaring procedures, and available help.
Less than 100. The credit is based if the employer had 100 or fewer workers on average in 2019.
on earnings paid to all workers whether they actually worked or not. To put it simply, even if the.
employees 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.
permitted just for incomes paid to workers who did not work during the calendar quarter.
In both cases, “salaries” consists of not just money payments however also a portion of the expense of employer.
supplied health care. Employee Retention Credit Less Than 5 Employees
Payment.
Employers can be immediately compensated for the credit by decreasing the amount of payroll taxes they.