Lets talk first about Employee Retention Credit Misconceptions :
Our group here what do these people doing everyone in this room is assisting teach people about ERC and uh constantly supply a gorgeous breakfast and have people really learn about the program we need to head to the room where we are able to show some of the checks that we are getting for business and I ‘d like to see that what is this this is uh hundreds of millions of dollars actually Kevin hundreds of countless dollars so these are duplicate copies of the letters that go to customers confirming that the check is on the way I suggest you know if you just start to look at a few of these here I imply this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I mean it’s simply I indicate think of the number of actual customers 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 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
receive this you know the check is opted for sure and that’s when they pay so they don’t pay anything up until they really receive the cash they don’t pay bottom line Wonder trust anything till this letter is confirmed 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 ended up and the number of you believe you have actually processed considering that you began this we’re about 35 000 of these for
about 6 billion dollars wow so plainly they understand what they’re doing and that’s what you need you need 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 Fantastic here you’re at my YouTube channel we’re discussing something actually essential today the worker retention credit which most of you have actually never ever become aware of I certainly hadn’t become aware of it till really recently and learned a lot about it due to the fact that this is probably the lowest cost of capital for any small company anywhere
anytime if you have staff members in between 5 and five hundred so I have actually got the specialist with me this is Josh Fox he’s the founder and CEO of bottom line Principles they’re the largest processor of these ERC credits this is a 170 page program so it’s hard this isn’t like PPP we just call your bank manager and say offer me a loan it doesn’t 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’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 everything about it let’s talk staff member 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 used businesses 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 exactly so the ERC is a refund that’s.
fix the cash cash payroll tax refund fine go on sorry I just have to make certain we got that point I mean that’s a huge distinction a loan versus cash cash I like money cash 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 stunning hard check in the mail where you get actual cash from the internal revenue service all right so let’s talk about how it works because it sounds 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 cash is not for the owner not for individuals on the cap table not for shareholders it’s for employees right you had to have actually owned an organization however it’s based upon 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 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 3 and four of 2020 and you had quarters one 2 and 3 of 2021. okay so that’s how it’s measured you have to be on the W-2 during that duration now let’s talk my preferred part money how much can you get back per employee that was on a W-2 in those 6 quarters so the computation in 2020 to be exact Kevin is 50 of the worker’s salary to a maximum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers escalated to 70 of the worker’s salary to an optimum of seven thousand per quarter how did that occur um they simply altered the rules in.
2021 versus due to the fact that the mayhem of the pandemic so they wanted to even get more to keep those staff members on payroll 100 so if you can get 5 000 per person Max in twenty that was 50 in 2020 up to 5 thousand Max and then what occurs 21 000 Max in 2021 oh that’s how you come up with 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 great deal of cash it is now there’s a caveat here the PPP money would need to be reduced from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would reduce the 26 000 so what we’re seeing on average Kevin is if you took PPP cash 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 staff members 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 concern is why does nobody understand about this since appearance when I initially found out about this when I initially satisfied Josh you know I’ve got lots of financial investments in great deals of companies I’m a significant advocate for entrepreneurship in America and make lots of many investments in entrepreneurs of which numerous suffered through the pandemic when I initially heard about this I called BS I don’t think 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 utilized them wisely 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 contacted us to my politician good friends Guv Senators they didn’t learn about it I suggest that’s how you understand that’s how false information is that there’s no details out there then a lot of people told me well you can’t get it because you took the PPP also not true so let’s ask Josh why does no one understand about the employee retention credit you know what’s intriguing you’re speaking about the banks Kevin due to the fact that 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 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 remember in the initial cares act you could not do both programs so if you had actually done PPP you might refrain from doing ERC in the original program and when they altered the law in 2021 the banks were refraining from doing ERC because it’s not alone so you’re getting a tax refund so the government never made it clear to any person about how to.
do this does your CFO know how to do this not really she or he’s never ever done it previously 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 accounting professional’s never done this before unless you have an account that went into this business and bottom line my company Kevin has actually been in business given that 2009 and we’ve been dealing with the federal government and the state federal government to recuperate money for Fortune 500 Fortune 1000 business so a great deal of our huge huge business customers have actually worked with bottom line to recuperate other federal government programs we have actually done sales tax and use tax joblessness tax work opportunity tax credits research and development tax credits unclaimed home property tax all of these other federal government programs.
The staff member retention tax credit is a broad based refundable tax credit created to encourage.
employers to keep workers on their payroll. The credit is 50% of approximately $10,000 in salaries paid by an.
Due to the fact that of COVID-19 or whose gross invoices, employer whose company is fully or partly suspended.
decline by more than 50%.
Availability.
1. The credit is available to all companies regardless of size consisting of tax exempt companies. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
companies who take Small Business Loans.
2. To qualify, the employer has to satisfy one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s service is totally or partly suspended by 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. When the.
employer’s gross receipts go above 80% of a comparable quarter in 2019 they no longer qualify.
after completion of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the qualifying salaries paid up to $10,000 in total.
It works for wages paid after March 13th and before December 31, 2020.
The definition of certifying incomes varies by whether an employer had, typically, more or less than.
100 staff members in 2019.
Business that concentrate on ERC filing help typically offer competence and support to assist organizations browse the complicated process of claiming the credit. They can offer numerous services, including:.
How is the employee retention credit calculated? Employee Retention Credit Misconceptions
Eligibility Assessment: These business will examine your service’s eligibility for the ERC based upon factors such as your market, profits, and operations. If you satisfy the requirements for the credit and determine the optimum credit quantity you can claim, they can help identify.
Paperwork and Estimation: ERC filing services will assist in collecting the essential documents, such as payroll records and financial statements, to support your claim. They will also help determine the credit quantity based on eligible salaries and other certifying costs.
Retroactive Claim Review: If you are eligible to claim the ERC for prior quarters, these companies can review your previous payroll records and financials to identify prospective chances for retroactive credits. They can help you amend prior income tax return to claim these refunds.
Filing Support: Companies concentrating on ERC filings will prepare and send the needed types and paperwork in your place. This consists of finishing Type 941 or any other necessary tax forms.
Compliance and Updates: ERC regulations and assistance have actually evolved over time. These business remain upgraded with the most recent changes and make sure that your filings comply with the most current standards. They can likewise offer continuous assistance if the IRS demands extra info or conducts an audit related to your ERC claim.
It is necessary to research and vet any business using ERC filing support to ensure their trustworthiness and knowledge. Look for recognized companies with experience in tax and payroll services, or consider reaching out to trusted accounting companies or tax experts who provide ERC submitting assistance.
Keep in mind that while these companies can supply valuable support, it’s constantly an excellent idea to have a basic understanding of the ERC requirements and process yourself. This will help you make notified choices and guarantee precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief steps. The goal of the ERC is to motivate services to keep and pay their workers during the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to eligible companies, consisting of for-profit organizations, tax-exempt organizations, and specific governmental entities. To certify, employers need to meet one of two criteria:.
The business operations were totally or partially suspended due to a government order related to COVID-19.
Business experienced a substantial decrease in gross receipts. As pointed out earlier, 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 decrease is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross receipts compared to the right away preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit amount is equal to a portion (approximately 70%) of qualified salaries paid to staff members, consisting of certain health plan costs. The maximum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, companies that got an Income Defense Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 allows businesses to declare the ERC even if they got a PPP loan. However, the exact same wages can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively broadened and boosted, enabling qualified employers to declare the credit for certified incomes paid as far back as March 13, 2020. This retroactive provision supplies an opportunity for organizations to modify prior-year income tax return and get refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their work income tax return, typically Kind 941. If the credit surpasses the amount of work taxes owed, the excess can be reimbursed to the employer.
It is very important to keep in mind that the ERC provisions and eligibility criteria have developed with time. The best strategy is to consult with a tax expert or check out the main IRS website for the most updated and detailed info regarding the ERC, consisting of any recent legal modifications or updates.
To qualify for the ERC, an organization should meet among the following criteria:.
Business operations were completely or partially suspended due to a federal government order related to COVID-19.
The business experienced a considerable decline in gross invoices. For 2021, a significant decline is defined as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
The ERC is available to businesses of all sizes, consisting of tax-exempt companies, but there are some exceptions. Federal government entities and services that got a PPP loan may have constraints on claiming the credit.
The process for declaring the ERC involves finishing the needed forms and consisting of the credit on your work income tax return (generally Type 941). The exact time it requires to process the credit can vary based upon numerous aspects, consisting of the complexity of your organization and the workload of the IRS. It’s advised to seek advice from a tax expert for assistance particular to your circumstance.
There are several business that can help with the process of declaring the ERC. These include accounting companies, tax advisory services, and payroll service providers. Some well-known companies that offer support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research and call these companies directly to ask about their costs and services.
Please note that the information offered here is based on basic understanding and might not reflect the most current updates or changes to the ERC. It is very important to talk to a tax professional or visit the main IRS website for the most updated and accurate info concerning eligibility, claiming treatments, and readily available help.
Less than 100. The credit is based if the company had 100 or fewer employees on average in 2019.
on wages paid to all employees whether they really worked or not. Simply put, even if the.
staff members worked full-time and made money for full-time work, the company still gets the credit.
Greater than 100. The credit is if the employer had more than 100 staff members on average in 2019.
enabled only for earnings paid to workers who did not work throughout the calendar quarter.
In both cases, “earnings” includes not simply cash payments however likewise a part of the cost of employer.
provided healthcare. Employee Retention Credit Misconceptions
Payment.
Companies can be immediately repaid for the credit by minimizing the quantity of payroll taxes they.