Lets talk first about Employee Retention Credit Section 2301 :
Our group here what do these people doing everyone in this room is assisting teach people about ERC and uh constantly offer a beautiful breakfast and have individuals actually find out about the program we must head to the room where we have the ability to display some of the checks that we are getting for companies and I wish to see that what is this this is uh numerous millions of dollars actually Kevin numerous millions of dollars so these are replicate copies of the letters that go to clients confirming that the check is on the way I mean you know if you just begin 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 suggest it’s simply I imply think of how many actual customers that went through the program yeah this is the very end this is the celebration at the end when the check is verified the numbers are confirmed and the check is on the mail in the mail from the IRS heading to the consumer so that’s how you have the ability to track it you know when you
receive this you understand the check is chosen sure which’s when they pay so they don’t pay anything until they in fact receive the cash they do not pay bottom line Wonder trust anything till this letter is confirmed the check is on the way they deposit it into their bank account and they can truly trust Wonder trust that the procedure has actually been ended up and how many you think you’ve processed because you began this we’re about 35 000 of these for
about six billion dollars wow so clearly they understand what they’re doing which’s what you need you require experts 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 talking about something really crucial today the staff member retention credit which the majority of you have never heard of I certainly hadn’t heard of it until very just recently and found out a lot about it because this is most likely the most affordable expense of capital for any small company anywhere
anytime if you have employees between 5 and five hundred so I’ve got the professional 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 difficult this isn’t like PPP we simply call your bank manager and say give me a loan it doesn’t 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 have actually become yes the Ambassador and paid spokesperson for this I enjoy this program it’s disappearing very soon you got to find out all about it let’s talk worker retention credit Josh Fox what is an ERC let’s simply begin there so throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act offered organizations three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everyone it makes a big distinction right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
fix the money cash payroll tax refund fine go on sorry I just need to ensure we got that point I indicate that’s a big distinction a loan versus cash cash I like money cash that’s what we’re speaking about fine 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 actual money from the IRS all right so let’s speak about how it works because it sounds like to me if it’s a if it’s worker retention credit that person had to be a worker 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 needed to have owned a business but it’s based upon you having W-2 workers in America not 10.99. As long as you had W-2 employees 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 6 months of 2021 on the W-2 proper so there were 6 quarters the program was open well walk us through the six quarters so you had quarters 2 3 and four of 2020 and you had quarters one two and three of 2021. fine so that’s how it’s determined you have to be on the W-2 during that period now let’s talk my favorite part cash how much can you get back per employee that was on a W-2 in those 6 quarters so the estimation in 2020 to be precise Kevin is 50 of the worker’s wage to an optimum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the worker’s income to an optimum of seven thousand per quarter how did that occur 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 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 five thousand in twenty twenty that’s twenty 6 thousand dollars per worker that is since that’s a lot of cash it is now there’s a caveat here the PPP money would have to be lowered from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would decrease 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 say 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 money you would still get a million dollar in the mail from the IRS so it’s big undoubtedly now the huge question is why does no one understand about this since appearance when I first found out about this when I initially fulfilled Josh you understand I have actually got great deals of investments in great deals of companies I’m a major advocate for entrepreneurship in America and make many numerous investments in entrepreneurs of which many suffered through the pandemic when I first heard about this I called BS I do not believe it due to the fact that I use the PPP we went through the money 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 utilized them carefully 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 pals Guv Senators they didn’t understand about it I mean that’s how you understand that’s how false information is that there’s no information out there then a bunch of individuals told me well you can’t get it due to the fact that you took the PPP likewise not true so let’s ask Josh why does nobody know about the worker retention credit you understand what’s interesting you’re speaking about the banks Kevin because 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 procedure 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 turmoil because keep in mind in the initial cares act you could refrain from doing both programs so if you had done PPP you might refrain from doing ERC in the original 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 made it clear to anybody about how to.
do this does your CFO understand how to do this not really she or he’s never ever done it before do the banks do it nope the banks don’t do it the payroll companies yeah a few of them are doing it as a payroll business your accounting professional no your accounting professional’s never ever done this prior to unless you have an account that went into this company and bottom line my firm Kevin has been in business considering that 2009 and we have actually been dealing with the federal government and the state federal government to recover cash for Fortune 500 Fortune 1000 business so a lot of our huge huge corporate clients have dealt with bottom line to recover other government programs we’ve done sales tax and use tax unemployment tax work opportunity 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 created to encourage.
employers to keep staff members on their payroll. The credit is 50% of up to $10,000 in incomes paid by an.
employer whose company is fully or partially suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
1. The credit is available to all employers regardless of size consisting of tax exempt organizations. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) little.
businesses who take Small company Loans.
2. To qualify, the employer has to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s company is fully or partially suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross receipts are listed below 50% of the equivalent quarter in 2019. Once the.
company’s gross receipts go above 80% of an equivalent quarter in 2019 they no longer certify.
after the end of that quarter.
Computation of the Credit.
The quantity of the credit is 50% of the qualifying salaries paid up to $10,000 in overall.
It works for incomes paid after March 13th and before December 31, 2020.
The definition of qualifying wages varies by whether an employer had, typically, basically than.
100 staff members in 2019.
Companies that specialize in ERC filing help usually provide know-how and support to assist companies browse the complex process of claiming the credit. They can use various services, including:.
How is the employee retention credit calculated? Employee Retention Credit Section 2301
Eligibility Evaluation: These business will evaluate your business’s eligibility for the ERC based on elements such as your industry, profits, and operations. If you fulfill the requirements for the credit and determine the optimum credit quantity you can claim, they can help figure out.
Documentation and Calculation: ERC filing services will help in collecting the essential documentation, such as payroll records and monetary statements, to support your claim. They will also help calculate the credit amount based on eligible wages and other qualifying costs.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for previous quarters, these business can review your previous payroll records and financials to determine potential chances for retroactive credits. They can assist you modify prior income tax return to claim these refunds.
Filing Support: Business specializing in ERC filings will prepare and submit the necessary forms and documents in your place. This includes completing Kind 941 or any other necessary tax forms.
Compliance and Updates: ERC guidelines and guidance have actually progressed gradually. These business remain updated with the current modifications and guarantee that your filings adhere to the most present standards. If the IRS requests extra info or carries out an audit associated to your ERC claim, they can also supply ongoing assistance.
It is essential to research study and vet any business offering ERC filing assistance to guarantee their trustworthiness and know-how. Look for recognized firms with experience in tax and payroll services, or consider reaching out to trusted accounting firms or tax specialists who offer ERC filing support.
Keep in mind that while these business can offer valuable help, it’s always an excellent idea to have a basic understanding of the ERC requirements and process yourself. This will assist you make notified choices and guarantee 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 goal of the ERC is to encourage businesses to keep 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, consisting of for-profit businesses, tax-exempt companies, and specific governmental entities. To certify, companies must fulfill one of two criteria:.
Business operations were fully or partly suspended due to a government order related to COVID-19.
Business experienced a considerable decline in gross invoices. As discussed earlier, for 2021, a considerable decrease is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decline is specified 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 instantly preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount is equal to a portion (approximately 70%) of certified earnings paid to employees, consisting of specific health plan expenditures. The optimum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, organizations that received an Income Protection Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 permits services to declare the ERC even if they got a PPP loan. The very same incomes can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and improved, allowing eligible employers to claim the credit for qualified earnings paid as far back as March 13, 2020. This retroactive provision offers an opportunity for businesses to modify prior-year tax returns and get refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their employment income tax return, usually Form 941. The excess can be reimbursed to the company if the credit exceeds the amount of employment taxes owed.
It is necessary to keep in mind that the ERC arrangements and eligibility criteria have evolved gradually. The very best strategy is to consult with a tax professional or check out the main IRS site for the most current and detailed info relating to the ERC, including any current legal modifications or updates.
To get approved for the ERC, a service needs to meet among the following requirements:.
Business operations were totally or partially 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 defined as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a considerable decline 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 instantly preceding quarter.
The ERC is readily available to companies of all sizes, consisting of tax-exempt organizations, however there are some exceptions. Federal government entities and services that got a PPP loan may have restrictions on declaring the credit.
The procedure for claiming the ERC includes completing the required types and consisting of the credit on your work income tax return (usually Type 941). The exact time it requires to process the credit can differ based upon a number of elements, including the complexity of your business and the workload of the internal revenue service. It’s advised to speak with a tax expert for guidance specific to your scenario.
There are numerous companies that can help with the procedure of declaring the ERC. Some well-known business that provide support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the info supplied here is based upon basic knowledge and might not reflect the most current updates or changes to the ERC. It is necessary to consult with a tax professional or go to the official IRS website for the most precise and current details concerning eligibility, declaring procedures, and readily available help.
Less than 100. If the company had 100 or fewer employees on average in 2019, then the credit is based.
on incomes paid to all staff members whether they in fact worked or not. To put it simply, even if the.
employees worked full time and made money for full-time work, the company still gets the credit.
Greater than 100. The credit is if the company had more than 100 employees on average in 2019.
permitted just for wages paid to staff members who did not work during the calendar quarter.
In both cases, “salaries” consists of not simply money payments but likewise a portion of the expense of company.
offered health care. Employee Retention Credit Section 2301
Employers can be instantly compensated for the credit by minimizing the quantity of payroll taxes they.