Lets talk first about Employee Retention Credit New Business Started In 2020 :
Our team here what do these men doing everyone in this room is helping teach people about ERC and uh always supply a gorgeous breakfast and have individuals actually find out about the program we must head to the room where we have the ability to show a few of the checks that we are getting for companies 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 clients confirming that the check is on the way I mean you understand if you simply start to look at a few of these here I mean this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I imply it’s just I mean think about how many real clients 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 verified and the check is on the mail in the mail from the internal revenue service heading to the customer so that’s how you’re able to track it you know when you
get this you understand the check is chosen sure and that’s when they pay so they don’t pay anything till they actually receive the money they do not pay bottom line Wonder trust anything till 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 been ended up and the number of you believe you have actually processed considering that you started this we’re about 35 000 of these for
about 6 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 Wonderful here you’re at my YouTube channel we’re speaking about something truly crucial today the staff member retention credit which the majority of you have actually never become aware of I definitely had not heard of it until very just recently and learned a lot about it since this is most likely 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 professional with me this is Josh Fox he’s the creator and CEO of bottom line Ideas 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 simply phone your bank manager and say offer 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 become yes the Ambassador and paid representative for this I like this program it’s disappearing soon you got to find out everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just start there so throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act used 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 money cash payroll tax refund alright go on sorry I simply need to make certain we got that point I suggest that’s a huge difference a loan versus cash cash I like cash money that’s what we’re discussing alright 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 stunning difficult check in the mail where you get real money from the internal revenue service all right so let’s speak about how it works because it seems like to me if it’s a if it’s worker retention credit that individual 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 shareholders it’s for employees right you had to have owned a service but it’s based upon you having W-2 staff members 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 proper so there were 6 quarters the program was open well walk us through the 6 quarters so you had quarters two three and four of 2020 and you had quarters one two and three of 2021. okay so that’s how it’s determined you need to be on the W-2 during that period 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 computation in 2020 to be precise Kevin is 50 of the staff member’s salary to an optimum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the employee’s wage to a maximum of 7 thousand per quarter how did that happen um they just changed the rules in.
2021 versus due to the fact that the mayhem of the pandemic so they wished 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 as much as 5 thousand Max and after that what occurs 21 000 Max in 2021 oh that’s how you develop twenty 6 thousand twenty one thousand to twenty twenty one plus five 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 caution here the PPP money would have to be reduced from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would lower the 26 000 so what we’re seeing on average Kevin is if you took PPP money someplace around ten thousand dollars an individual 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 substantial obviously now the big concern is why does nobody understand about this because look when I initially became aware of this when I first fulfilled Josh you know I’ve got great deals of financial investments in great deals of companies I’m a significant supporter for entrepreneurship in America and make numerous numerous financial investments in business owners of which many suffered through the pandemic when I first found out about this I called BS I don’t believe it due to the fact that I use 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 been worthy of and we used them wisely to stay alive during the pandemic so when I became aware of this I said nah it can’t hold true but when I dug around I even called to my politician good friends Governor Senators they didn’t understand about it I mean that’s how you understand that’s how misinformation is that there’s no info out there then a lot of people informed me well you can’t get it since you took the PPP likewise not real so let’s ask Josh why does no one understand about the staff member retention credit you know what’s fascinating you’re talking 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 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 because remember in the initial cares act you could not do both programs so if you had actually done PPP you could refrain from doing ERC in the original 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 federal government never ever made it clear to anyone 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 business yeah a few 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 because 2009 and we’ve been working with the federal government and the state government to recuperate money for Fortune 500 Fortune 1000 companies so a lot of our huge huge business customers have actually dealt with bottom line to recover other federal government programs we’ve done sales tax and utilize tax joblessness tax work opportunity tax credits research and development tax credits unclaimed property property tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit created to encourage.
employers to keep staff members on their payroll. The credit is 50% of as much as $10,000 in incomes paid by an.
company whose organization is fully or partially suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
Schedule.
1. The credit is offered to all employers despite size consisting of tax exempt organizations. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
services who take Small Business Loans.
2. To certify, the employer needs to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s business is fully or partially 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 comparable quarter in 2019. As soon as the.
company’s gross receipts exceed 80% of a similar quarter in 2019 they no longer qualify.
after completion of that quarter.
Computation of the Credit.
The quantity of the credit is 50% of the certifying wages paid up to $10,000 in total.
It works for wages paid after March 13th and before December 31, 2020.
The meaning of qualifying salaries varies by whether a company had, usually, more or less than.
100 workers in 2019.
Business that concentrate on ERC filing support usually supply proficiency and support to assist businesses navigate the complex process of declaring the credit. They can provide various services, including:.
How is the employee retention credit calculated? Employee Retention Credit New Business Started In 2020
Eligibility Assessment: These business will examine your business’s eligibility for the ERC based on factors such as your industry, revenue, and operations. They can assist figure out if you satisfy the requirements for the credit and identify the maximum credit amount you can declare.
Documentation and Computation: ERC filing services will assist in collecting the required documents, such as payroll records and financial declarations, to support your claim. They will also help determine the credit quantity based upon qualified salaries and other certifying expenses.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for previous quarters, these companies can examine your past payroll records and financials to determine possible opportunities for retroactive credits. They can help you modify prior income tax return to declare these refunds.
Filing Help: Companies focusing on ERC filings will prepare and send the essential forms and documentation on your behalf. This consists of completing Kind 941 or any other required tax forms.
Compliance and Updates: ERC regulations and guidance have progressed with time. These companies stay updated with the current modifications and ensure that your filings comply with the most existing standards. They can likewise offer ongoing assistance if the IRS demands additional information or performs an audit related to your ERC claim.
It is very important to research and vet any business using ERC filing assistance to guarantee their reliability and proficiency. Search for established companies with experience in tax and payroll services, or think about connecting to trusted accounting companies or tax specialists who use ERC submitting support.
Keep in mind that while these business can offer valuable help, it’s constantly a great idea to have a standard understanding of the ERC requirements and process yourself. This will assist you make notified decisions and make sure precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief steps. The objective of the ERC is to encourage organizations to retain and pay their staff members throughout the pandemic, even if their operations have been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to qualified companies, including for-profit companies, tax-exempt organizations, and specific governmental entities. To certify, companies should fulfill one of two criteria:.
The business operations were totally or partly suspended due to a government order related to COVID-19.
Business experienced a substantial decrease in gross invoices. As pointed out previously, for 2021, a significant decrease is defined as a 20% decline in gross receipts 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 exact same quarter in 2019, or a 20% decline in gross receipts compared to the immediately 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 certified earnings paid to workers, consisting of certain 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, services that received a Paycheck Protection Program (PPP) loan were not eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 permits services to claim the ERC even if they received a PPP loan. Nevertheless, the very same salaries can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and improved, permitting eligible companies to claim the credit for certified salaries paid as far back as March 13, 2020. This retroactive arrangement provides an opportunity for businesses to amend prior-year income tax return and get refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their employment tax returns, normally Kind 941. If the credit surpasses 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 criteria have actually evolved gradually. The best course of action is to talk to a tax professional or check out the main internal revenue service site for the most in-depth and current details regarding the ERC, including any current legal changes or updates.
To get approved for the ERC, an organization should meet one of the following requirements:.
The business operations were fully or partly suspended due to a government order related to COVID-19.
Business experienced a considerable decrease in gross receipts. For 2021, a substantial decrease is specified as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
The ERC is offered to organizations of all sizes, consisting of tax-exempt companies, however there are some exceptions. Federal government entities and services that received a PPP loan might have restrictions on declaring the credit.
The procedure for claiming the ERC includes finishing the required kinds and consisting of the credit on your work income tax return (normally Kind 941). The exact time it requires to process the credit can differ based on numerous aspects, including the complexity of your organization and the workload of the internal revenue service. It’s recommended to seek advice from a tax expert for assistance specific to your circumstance.
There are several business that can help with the procedure of claiming the ERC. Some well-known business that use help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the info offered here is based on general knowledge and might not reflect the most recent updates or changes to the ERC. It is very important to seek advice from a tax professional or visit the main IRS website for the most up-to-date and precise info concerning eligibility, declaring treatments, and readily available assistance.
Less than 100. The credit is based if the company had 100 or fewer workers on average in 2019.
on incomes paid to all employees whether they really worked or not. Simply put, even if the.
employees worked full-time and got paid for full time work, the company still gets the credit.
Greater than 100. The credit is if the company had more than 100 staff members on average in 2019.
permitted just for incomes paid to staff members who did not work throughout the calendar quarter.
In both cases, “salaries” includes not simply money payments however likewise a portion of the cost of company.
provided healthcare. Employee Retention Credit New Business Started In 2020
Payment.
Companies can be immediately compensated for the credit by decreasing the quantity of payroll taxes they.