Lets talk first about Employee Retention Credit Preceding Quarter :
Our team here what do these people doing everyone in this space is assisting teach individuals about ERC and uh constantly provide a beautiful breakfast and have people truly find out about the program we should head to the space where we are able to display a few of the checks that we are getting for companies and I want to see that what is this this is uh numerous millions of dollars literally Kevin numerous millions of dollars so these are duplicate copies of the letters that go to customers confirming that the check is on the way I indicate you know if you simply begin 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 simply I mean think of the number of 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 validated 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 know when you
get this you understand the check is chosen sure which’s when they pay so they do not pay anything up until they in fact get the money they don’t pay bottom line Wonder trust anything till this letter is validated the check is on the method they transfer it into their savings account and they can truly trust Wonder trust that the process has actually been finished and how many you believe you’ve processed since you began this we have to do with 35 000 of these for
about 6 billion dollars wow so plainly they know what they’re doing which’s what you need you need 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 Wonderful here you’re at my YouTube channel we’re talking about something truly essential today the worker retention credit which the majority of you have actually never ever become aware of I definitely had not heard of it until very just recently and learned a lot about it since this is probably the lowest cost of capital for any small business anywhere
anytime if you have workers between 5 and five hundred so I’ve got the expert with me this is Josh Fox he’s the founder and CEO of bottom line Concepts they’re the largest processor of these ERC credits this is a 170 page program so it’s not easy this isn’t like PPP we simply call up your bank manager and state offer 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 have actually ended up being yes the Ambassador and paid representative for this I like this program it’s going away soon you got to learn all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply start there so throughout the Trump Administration when President Trump was enacted they developed the cares Act and the cares act used businesses three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone it makes a huge difference right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the cash cash payroll tax refund all right go on sorry I simply have to make certain we got that point I mean that’s a huge distinction a loan versus money money I like cash 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 lovely tough check in the mail where you get actual cash from the IRS all right so let’s discuss how it works due to the fact that it sounds like to me if it’s a if it’s worker retention credit that individual needed to be a staff member so I’m going to make the Presumption this cash is not for the owner not for individuals on the cap table not for investors it’s for employees right you had to have actually owned an organization however it’s based on 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 first 6 months of 2021 on the W-2 proper so there were 6 quarters the program was open well stroll us through the six quarters so you had quarters two three and four of 2020 and you had quarters one 2 and three of 2021. fine so that’s how it’s measured you need to be on the W-2 during that period now let’s talk my preferred part money just how much can you get back per staff member that was on a W-2 in those 6 quarters so the computation in 2020 to be exact Kevin is 50 of the staff member’s salary to an optimum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers increased to 70 of the employee’s wage to an optimum of 7 thousand per quarter how did that happen 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 up to 5 thousand Max and after that what happens 21 000 Max in 2021 oh that’s how you create 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 since that’s a great deal of cash it is now there’s a caveat here the PPP money would have to be decreased from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would minimize the 26 000 so what we’re seeing on average Kevin is if you took PPP cash somewhere around ten thousand dollars a person so let’s state hypothetically you owned a restaurant in New York City where I’m from and you had a hundred employees and you took PPP money you would still get a million dollar in the mail from the internal revenue service so it’s huge clearly now the huge question is why does no one know about this due to the fact that look when I first heard about this when I initially met Josh you know I’ve got lots of financial investments in great deals of companies I’m a significant supporter for entrepreneurship in America and make lots of many investments in business owners of which numerous suffered through the pandemic when I first found out about this I called BS I don’t think it because 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 deserved and we used them sensibly to survive during the pandemic so when I became aware of this I stated nah it can’t hold true but when I dug around I even contacted us to my politician buddies Governor Senators they didn’t know about it I indicate that’s how you know 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 because you took the PPP likewise not true so let’s ask Josh why does nobody learn about the employee retention credit you understand what’s intriguing you’re talking about the banks Kevin due to the fact that in the PPP loan process 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 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 process that’s all um and here there was mayhem since remember in the initial cares act you could refrain from doing both programs so if you had actually done PPP you could not do 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 government never made it clear to anyone about how to.
do this does your CFO understand how to do this not actually she or he’s never done it in the past do the banks do it nope the banks don’t do it the payroll business yeah some of them are doing it as a payroll business your accounting professional no your accountant’s never ever done this prior to unless you have an account that entered into this business and bottom line my firm Kevin has actually stayed in business considering that 2009 and we’ve been working with the federal government and the state federal government to recover cash for Fortune 500 Fortune 1000 companies so a great deal of our huge huge business customers have dealt with bottom line to recuperate other government programs we have actually done sales tax and utilize 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 created to encourage.
companies to keep staff members on their payroll. The credit is 50% of as much as $10,000 in wages paid by an.
company whose service is fully or partly suspended because of COVID-19 or whose gross invoices.
decrease by more than 50%.
1. The credit is available to all employers despite 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 company Loans.
2. To qualify, the employer has to satisfy one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s organization is completely or partly suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross receipts are listed below 50% of the comparable quarter in 2019. When the.
employer’s gross invoices exceed 80% of an equivalent 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 wages paid up to $10,000 in total.
It is effective for earnings paid after March 13th and prior to December 31, 2020.
The definition of qualifying wages differs by whether an employer had, usually, more or less than.
100 employees in 2019.
Companies that specialize in ERC filing assistance generally provide know-how and support to assist services navigate the intricate procedure of claiming the credit. They can use various services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Preceding Quarter
Eligibility Assessment: These business will evaluate your service’s eligibility for the ERC based upon elements such as your industry, profits, and operations. They can help figure out if you meet the requirements for the credit and recognize the optimum credit quantity you can claim.
Documentation and Computation: ERC filing services will assist in gathering the necessary documentation, such as payroll records and monetary declarations, to support your claim. They will likewise assist determine the credit amount based on eligible incomes and other certifying expenditures.
Retroactive Claim Review: If you are eligible to declare the ERC for previous quarters, these companies can evaluate your past payroll records and financials to identify prospective chances for retroactive credits. They can assist you amend previous income tax return to claim these refunds.
Filing Support: Companies concentrating on ERC filings will prepare and submit the needed forms and documents in your place. This includes finishing Form 941 or any other required tax forms.
Compliance and Updates: ERC regulations and assistance have progressed in time. These business remain upgraded with the latest modifications and guarantee that your filings comply with the most current standards. They can likewise provide continuous support if the IRS demands extra details or performs an audit related to your ERC claim.
It is essential to research and veterinarian any business providing ERC filing help to guarantee their trustworthiness and proficiency. Look for recognized firms with experience in tax and payroll services, or consider connecting to relied on accounting companies or tax specialists who offer ERC filing support.
Keep in mind that while these companies can offer valuable help, it’s constantly a good concept to have a basic understanding of the ERC requirements and procedure yourself. This will help you make informed decisions and make sure accurate filings.
The Worker Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief procedures. The objective of the ERC is to motivate businesses to keep and pay their employees during the pandemic, even if their operations have actually been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is available to qualified companies, including for-profit businesses, tax-exempt companies, and particular governmental entities. To qualify, employers must meet one of two requirements:.
The business operations were totally or partially suspended due to a federal government order related to COVID-19.
Business experienced a considerable decrease in gross invoices. As discussed previously, for 2021, a considerable decrease is specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decrease is specified as a 20% decline in gross invoices compared to the 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 amount is equal to a portion (as much as 70%) of certified incomes paid to staff members, including certain health insurance expenditures. The maximum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, companies that got an Income Protection Program (PPP) loan were not eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 enables organizations to declare the ERC even if they received a PPP loan. However, the very same earnings can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and boosted, allowing eligible companies to claim the credit for qualified wages paid as far back as March 13, 2020. This retroactive arrangement provides an opportunity for companies to amend prior-year tax returns and receive refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their work tax returns, usually Type 941. If the credit surpasses the quantity of work taxes owed, the excess can be refunded to the employer.
It’s important to keep in mind that the ERC arrangements and eligibility criteria have actually developed in time. The best course of action is to speak with a tax expert or check out the official IRS website for the most detailed and up-to-date info relating to the ERC, consisting of any current legislative modifications or updates.
To receive the ERC, an organization needs to fulfill one of the following requirements:.
Business operations were totally or partially suspended due to a government order related to COVID-19.
The business experienced a considerable decline in gross receipts. For 2021, a substantial decrease is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decrease is specified as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the immediately preceding quarter.
The ERC is available to companies of all sizes, including tax-exempt organizations, however there are some exceptions. For instance, government entities and organizations that received a PPP loan may have constraints on declaring the credit.
The procedure for declaring the ERC includes completing the essential forms and including the credit on your work income tax return (typically Form 941). The exact time it takes to process the credit can differ based upon several factors, including the intricacy of your company and the workload of the IRS. It’s recommended to consult with a tax professional for assistance particular to your scenario.
There are several companies that can help with the process of claiming the ERC. These consist of accounting companies, tax advisory services, and payroll company. Some well-known business that provide assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research study and call these companies straight to ask about their charges and services.
Please note that the information offered here is based upon general knowledge and might not reflect the most current updates or modifications to the ERC. It’s important to speak with a tax professional or visit the official IRS website for the most precise and updated info relating to eligibility, declaring procedures, and available support.
Less than 100. The credit is based if the company had 100 or less staff members on average in 2019.
on earnings paid to all employees whether they really worked or not. To put it simply, even if the.
employees worked full time and made money for full time work, the employer still gets the credit.
Greater than 100. The credit is if the company had more than 100 workers on average in 2019.
allowed just for incomes paid to employees who did not work throughout the calendar quarter.
In both cases, “earnings” includes not just cash payments but also a part of the cost of company.
supplied health care. Employee Retention Credit Preceding Quarter
Companies can be immediately repaid for the credit by lowering the amount of payroll taxes they.