Lets talk first about Employee Retention Credit Owner Employee :
Our group here what do these guys doing everyone in this space is helping teach people about ERC and uh constantly offer a lovely breakfast and have people actually find out about the program we should head to the space where we have the ability to display some of the checks that we are getting for companies 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 replicate copies of the letters that go to clients verifying that the check is on the way I indicate you know if you just start to take a look at a few of these here I indicate this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I mean it’s just I suggest think about the number of actual customers that went through the program yeah this is the very end this is the party at the end when the check is confirmed the numbers are validated and the check is on the mail in the mail from the internal revenue service heading to the client so that’s how you have the ability to track it you know when you
receive this you know the check is chosen sure and that’s when they pay so they do not pay anything up until they in fact get the cash they do not pay bottom line Wonder trust anything till this letter is confirmed the check is on the method they transfer it into their bank account and they can really rely on Wonder trust that the procedure has actually been ended up and the number of you think you have actually processed because you started this we have to do with 35 000 of these for
about 6 billion dollars wow so plainly they know 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 talking about something actually crucial today the worker retention credit which most of you have never ever heard of I definitely had not become aware of it till really recently and learned a lot about it because this is probably the lowest expense 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 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 difficult this isn’t like PPP we just contact your bank manager and say provide me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to inform us all about it and how to get it and why I’ve ended up being 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 employee retention credit Josh Fox what is an ERC let’s just start there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act used services three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everyone 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 money money payroll tax refund alright go on sorry I simply need to make sure we got that point I suggest that’s a big difference a loan versus cash money I like money cash that’s what we’re speaking about okay 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 lovely tough check in the mail where you get real cash from the IRS all right so let’s discuss how it works since it seems like to me if it’s a if it’s staff member retention credit that person needed to be a staff member so I’m going to make the Presumption this money is not for the owner not for people on the cap table not for shareholders it’s for workers right you had to have actually owned a company but it’s based upon you having W-2 employees in America not 10.99. so as long as you had W-2 employees 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 six months of 2021 on the W-2 appropriate so there were 6 quarters the program was open well walk us through the 6 quarters so you had quarters 2 3 and 4 of 2020 and you had quarters one two and three of 2021. fine so that’s how it’s measured you need to be on the W-2 during that duration now let’s talk my preferred part money how much can you return per worker that was on a W-2 in those six quarters so the calculation in 2020 to be specific Kevin is 50 of the employee’s wage to a maximum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers escalated to 70 of the worker’s income to an optimum of seven thousand per quarter how did that happen 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 employees on payroll 100 so if you can get 5 000 per person Max in twenty that was 50 in 2020 up to five thousand Max and after that what happens 21 000 Max in 2021 oh that’s how you come up with twenty 6 thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty 6 thousand dollars per staff member that is because that’s a lot of cash it is now there’s a caveat here the PPP cash would need to be decreased from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would reduce the 26 000 so what we’re seeing typically Kevin is if you took PPP cash someplace around 10 thousand dollars an individual 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 cash you would still get a million dollar in the mail from the internal revenue service so it’s substantial undoubtedly now the big concern is why does nobody understand about this because appearance when I initially heard about this when I initially satisfied Josh you know I’ve got lots of investments in lots of companies I’m a significant supporter for entrepreneurship in America and make numerous lots of financial investments in entrepreneurs of which many suffered through the pandemic when I initially heard about this I called BS I do not think it because 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 which were well should have and we used them carefully to stay alive throughout the pandemic so when I became aware of this I stated nah it can’t hold true however when I dug around I even contacted us to my political leader pals Governor Senators they didn’t understand about it I indicate that’s how you know that’s how misinformation is that there’s no details out there then a bunch of individuals informed me well you can’t get it due to the fact that you took the PPP also not real so let’s ask Josh why does no one understand about the worker retention credit you understand what’s intriguing you’re talking about the banks Kevin due to the fact that in the PPP loan procedure the federal government made it extremely clear that if you desired 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 just process process that’s all um and here there was mayhem due to the fact that remember in the initial cares act you might not do both programs so if you had done PPP you might refrain from doing 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 federal government never made it clear to anyone about how to.
do this does your CFO know how to do this not really he or she’s never done it in the past 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 ever done this before unless you have an account that went into this organization and bottom line my firm Kevin has stayed in business considering that 2009 and we’ve been working with the federal government and the state government to recover money for Fortune 500 Fortune 1000 companies so a great deal of our huge huge business customers have actually dealt with bottom line to recover other federal government programs we have actually done sales tax and utilize tax joblessness tax work chance tax credits research and development tax credits unclaimed property real estate tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit designed to motivate.
employers to keep employees on their payroll. The credit is 50% of up to $10,000 in earnings paid by an.
Since of COVID-19 or whose gross receipts, company whose business is completely or partially suspended.
decline by more than 50%.
1. The credit is available to all employers regardless of size consisting of tax exempt organizations. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
businesses who take Small company Loans.
2. To qualify, the company needs to satisfy one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s business is totally or partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross invoices are listed below 50% of the similar quarter in 2019. When the.
company’s gross receipts go above 80% of an equivalent 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 wages paid up to $10,000 in total.
It is effective for wages paid after March 13th and prior to December 31, 2020.
The definition of qualifying salaries varies by whether a company had, usually, basically than.
100 staff members in 2019.
Business that focus on ERC filing help normally supply know-how and support to assist companies browse the complex procedure of declaring the credit. They can use different services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Owner Employee
Eligibility Evaluation: These companies will evaluate your company’s eligibility for the ERC based on aspects such as your industry, profits, and operations. If you fulfill the requirements for the credit and determine the maximum credit quantity you can claim, they can help figure out.
Documentation and Estimation: ERC filing services will help in gathering the necessary documentation, such as payroll records and financial statements, to support your claim. They will likewise help compute the credit quantity based on qualified incomes and other qualifying costs.
Retroactive Claim Review: If you are eligible to declare the ERC for previous quarters, these companies can examine your past payroll records and financials to determine potential chances for retroactive credits. They can help you change previous tax returns to claim these refunds.
Filing Support: Business focusing on ERC filings will prepare and submit the essential types and paperwork on your behalf. This includes finishing Type 941 or any other required tax return.
Compliance and Updates: ERC regulations and assistance have actually progressed over time. These companies stay upgraded with the current modifications and ensure that your filings adhere to the most present standards. If the IRS requests extra info or performs an audit associated to your ERC claim, they can also supply continuous assistance.
It is very important to research and vet any company using ERC filing help to ensure their credibility and know-how. Try to find recognized firms with experience in tax and payroll services, or think about reaching out to relied on accounting firms or tax specialists who offer ERC filing assistance.
Bear in mind that while these companies can supply important support, it’s always a great concept to have a standard understanding of the ERC requirements and procedure yourself. This will help you make informed decisions and ensure accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief measures. The objective of the ERC is to motivate services to keep and pay their staff members throughout the pandemic, even if their operations have actually been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to qualified companies, consisting of for-profit businesses, tax-exempt organizations, and particular governmental entities. To qualify, employers should satisfy one of two 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. As pointed out earlier, for 2021, a substantial decrease is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a substantial 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 instantly preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity amounts to a percentage (up to 70%) of certified earnings paid to employees, including certain health plan expenses. The maximum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, companies that got a Paycheck Security Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 permits companies to claim the ERC even if they received a PPP loan. The same wages can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and improved, allowing eligible employers to claim the credit for certified wages paid as far back as March 13, 2020. This retroactive provision provides a chance for businesses to change prior-year tax returns and get refunds.
Claiming the Credit: Companies can declare the ERC by reporting it on their employment income tax return, typically Type 941. The excess can be refunded to the employer if the credit goes beyond the quantity of work taxes owed.
It is very important to note that the ERC arrangements and eligibility requirements have actually developed in time. The very best strategy is to speak with a tax expert or go to the official internal revenue service website for the most comprehensive and updated info regarding the ERC, including any recent legislative changes or updates.
To qualify for the ERC, a company needs to fulfill among the following requirements:.
Business operations were totally or partially suspended due to a government order related to COVID-19.
The business experienced a significant decrease in gross invoices. For 2021, a significant decrease is defined 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% decline in gross receipts compared to the very same quarter in 2019, or a 20% decline in gross receipts compared to the instantly preceding quarter.
The ERC is readily available to companies of all sizes, including tax-exempt organizations, but there are some exceptions. Federal government entities and businesses that got a PPP loan might have constraints on claiming the credit.
The procedure for claiming the ERC involves completing the needed kinds and consisting of the credit on your work tax return (typically Form 941). The exact time it takes to process the credit can differ based upon a number of elements, including the intricacy of your service and the workload of the internal revenue service. It’s advised to speak with a tax expert for guidance specific to your situation.
There are numerous business that can help with the procedure of declaring the ERC. Some well-known companies that provide assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the information provided here is based on basic knowledge and may not reflect the most recent updates or modifications to the ERC. It is very important to talk to a tax expert or check out the main IRS site for the most updated and accurate details relating to eligibility, declaring procedures, and offered assistance.
Less than 100. The credit is based if the employer had 100 or fewer employees on average in 2019.
on salaries paid to all workers whether they actually worked or not. In other words, even if the.
staff members 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 staff members on average in 2019.
permitted just for earnings paid to staff members who did not work throughout the calendar quarter.
In both cases, “salaries” consists of not just money payments but also a part of the cost of company.
supplied health care. Employee Retention Credit Owner Employee
Companies can be immediately compensated for the credit by reducing the amount of payroll taxes they.