Lets talk first about Employee Retention Credit Time Period :
Our group here what do these guys doing everyone in this space is assisting teach people about ERC and uh always provide a gorgeous breakfast and have people truly discover the program we ought to head to the room where we are able 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 countless dollars literally Kevin numerous millions of dollars so these are replicate copies of the letters that go to clients validating that the check is on the method I mean you understand if you just begin to 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 suggest it’s just I mean consider how many real clients that went through the program yeah this is the very end this is the celebration at the end when the check is confirmed the numbers are verified and the check is on the mail in the mail from the IRS heading to the customer so that’s how you have the ability to track it you know when you
receive this you understand the check is chosen sure and that’s when they pay so they do not pay anything until they in fact receive the money they don’t pay bottom line Wonder trust anything till this letter is confirmed the check is on the method they transfer it into their savings account and they can really trust Wonder trust that the process has actually been finished and the number of you believe you’ve processed given that 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 and that’s what you need you require specialists 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 discussing something really crucial today the employee retention credit which the majority of you have actually never ever heard of I definitely hadn’t become aware of it up until very recently and discovered a lot about it since this is most likely the lowest cost of capital for any small company anywhere
anytime if you have workers in 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 challenging this isn’t like PPP we just call up 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 have actually ended up being yes the Ambassador and paid representative for this I love this program it’s disappearing very soon you got to learn everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply start there so during the Trump Administration when President Trump was enacted they created the cares Act and the cares act offered businesses 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost 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 cash cash payroll tax refund fine go on sorry I simply need to make sure we got that point I indicate that’s a big difference 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 original cares Act is the ERC and yes Kevin it is a lovely hard check in the mail where you get actual cash from the IRS all right so let’s talk about how it works since it seems like to me if it’s a if it’s employee retention credit that person had to be a staff member so I’m going to make the Presumption this money is not for the owner not for individuals on the cap table not for investors it’s for workers right you needed to have actually owned a business however it’s based on you having W-2 workers in America not 10.99. so as long as you had W-2 staff members and you paid federal payroll taxes that’s why you would be eligible so you need 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 appropriate so there were 6 quarters the program was open well walk 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 determined you need to be on the W-2 during that period now let’s talk my favorite part cash just how much can you return per worker that was on a W-2 in those 6 quarters so the estimation in 2020 to be precise Kevin is 50 of the staff member’s wage to a maximum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the worker’s income to an optimum of 7 thousand per quarter how did that happen um they just altered the rules in.
2021 versus because the turmoil 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 takes place 21 000 Max in 2021 oh that’s how you come up with twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per worker 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 reduced from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would minimize the 26 000 so what we’re seeing usually Kevin is if you took PPP cash someplace around 10 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 staff members and you took PPP money you would still get a million dollar in the mail from the internal revenue service so it’s big clearly now the huge question is why does nobody learn about this because look when I initially heard about this when I initially met Josh you know I’ve got lots of financial investments in lots of companies I’m a major supporter for entrepreneurship in America and make lots of numerous investments in business owners of which numerous suffered through the pandemic when I first became aware of this I called BS I do not think it since 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 and that were well deserved and we utilized them carefully to stay alive during the pandemic so when I found out about this I said nah it can’t be true however when I dug around I even called to my political leader pals Guv Senators they didn’t know about it I suggest that’s how you know that’s how misinformation is that there’s no details out there then a bunch of individuals told me well you can’t get it since you took the PPP also not real so let’s ask Josh why does nobody understand about the staff member retention credit you understand what’s intriguing you’re talking about the banks Kevin since 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 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 turmoil since keep in mind in the original cares act you could refrain from doing both programs so if you had done PPP you could refrain from doing ERC in the initial program and when they changed the law in 2021 the banks were not doing ERC because it’s not alone so you’re getting a tax refund so the federal government never made it clear to anybody about how to.
do this does your CFO know how to do this not truly he or she’s never 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 company your accountant no your accountant’s never done this before unless you have an account that went into this service and bottom line my company Kevin has stayed in business given that 2009 and we’ve been dealing with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 companies so a great deal of our huge huge business clients have worked with bottom line to recover other federal government programs we’ve done sales tax and use tax joblessness tax work opportunity tax credits research and development tax credits unclaimed property property tax all of these other government programs.
The worker retention tax credit is a broad based refundable tax credit designed to motivate.
employers to keep staff members on their payroll. The credit is 50% of up to $10,000 in incomes paid by an.
Due to the fact that of COVID-19 or whose gross invoices, employer whose company is fully or partly suspended.
decrease by more than 50%.
Schedule.
1. The credit is available to all employers despite size including tax exempt companies. There are.
just two exceptions: (1) state and city governments and their instrumentalities and (2) small.
companies who take Small Business Loans.
2. To qualify, the company needs to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s organization is completely or partly suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross receipts are listed below 50% of the equivalent quarter in 2019. When the.
company’s gross receipts exceed 80% of a similar 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 certifying incomes paid up to $10,000 in total.
It is effective for incomes paid after March 13th and before December 31, 2020.
The meaning of qualifying wages varies by whether an employer had, typically, basically than.
100 workers in 2019.
Companies that specialize in ERC filing support generally supply proficiency and assistance to help services browse the intricate process of declaring the credit. They can provide various services, including:.
How is the employee retention credit calculated? Employee Retention Credit Time Period
Eligibility Evaluation: These companies will examine your business’s eligibility for the ERC based upon factors such as your market, income, and operations. They can assist figure out if you meet the requirements for the credit and recognize the optimum credit quantity you can claim.
Paperwork and Calculation: ERC filing services will assist in collecting the necessary paperwork, such as payroll records and monetary statements, to support your claim. They will likewise help calculate the credit amount based on qualified wages and other certifying costs.
Retroactive Claim Review: If you are qualified to declare the ERC for previous quarters, these companies can evaluate your previous payroll records and financials to recognize potential chances for retroactive credits. They can assist you change previous income tax return to claim these refunds.
Filing Support: Business concentrating on ERC filings will prepare and send the required types and paperwork in your place. This consists of finishing Type 941 or any other necessary tax forms.
Compliance and Updates: ERC regulations and guidance have actually evolved over time. These companies remain updated with the most recent changes and make sure that your filings comply with the most current guidelines. If the Internal revenue service demands extra details or conducts an audit related to your ERC claim, they can likewise offer ongoing support.
It is very important to research study and vet any business using ERC filing assistance to ensure their trustworthiness and know-how. Search for established firms with experience in tax and payroll services, or consider connecting to relied on accounting firms or tax professionals who use ERC filing support.
Remember that while these companies can provide important assistance, it’s constantly an excellent concept to have a standard understanding of the ERC requirements and procedure yourself. This will assist you make notified choices and ensure accurate filings.
The Staff Member 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 motivate businesses to retain and pay their workers during the pandemic, even if their operations have actually been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to qualified companies, including for-profit organizations, tax-exempt companies, and specific governmental entities. To qualify, employers need to meet one of two requirements:.
Business operations were fully or partially suspended due to a federal government order related to COVID-19.
The business experienced a substantial decline in gross receipts. As discussed previously, for 2021, a significant decline is specified as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a substantial decline is specified as a 20% decline in gross invoices compared to the same quarter in 2019, or a 20% decline 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 certified salaries paid to staff members, consisting of certain health insurance costs. 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, businesses that received a Paycheck Security Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 permits businesses 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 broadened and improved, allowing eligible employers to declare the credit for qualified earnings paid as far back as March 13, 2020. This retroactive arrangement provides a chance for companies to change prior-year income tax return and get refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their employment income tax return, normally Kind 941. The excess can be reimbursed to the company if the credit surpasses the amount of employment taxes owed.
It is necessary to note that the ERC provisions and eligibility requirements have developed in time. The best strategy is to seek advice from a tax professional or go to the main IRS site for the most in-depth and updated details relating to the ERC, including any current legislative modifications or updates.
To qualify for the ERC, a service needs to fulfill among the following requirements:.
The business operations were completely or partly suspended due to a government order related to COVID-19.
Business experienced a significant decrease in gross receipts. For 2021, a considerable decrease is defined as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019, or a 20% decline in gross receipts compared to the right away preceding quarter.
The ERC is offered to companies of all sizes, consisting of tax-exempt companies, however there are some exceptions. Government entities and companies that received a PPP loan may have restrictions on declaring the credit.
The process for declaring the ERC involves finishing the needed types and consisting of the credit on your employment tax return (typically Type 941). The exact time it requires to process the credit can vary based on numerous aspects, consisting of the intricacy of your company and the work of the IRS. It’s recommended to talk to a tax professional for assistance specific to your scenario.
There are numerous companies that can help with the procedure of claiming the ERC. These include accounting firms, tax advisory services, and payroll service providers. Some widely known companies that use assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research study and call these companies straight to inquire about their services and costs.
Please note that the information supplied here is based upon basic knowledge and might not show the most recent updates or modifications to the ERC. It is essential to consult with a tax professional or check out the main IRS site for the most accurate and current details concerning eligibility, declaring treatments, and offered support.
Less than 100. The credit is based if the company had 100 or less employees on average in 2019.
on earnings paid to all staff members whether they actually worked or not. Simply put, 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 employer had more than 100 staff members on average in 2019.
enabled just for salaries paid to staff members who did not work during the calendar quarter.
In both cases, “wages” includes not simply money payments however also a part of the cost of company.
offered health care. Employee Retention Credit Time Period
Payment.
Employers can be instantly repaid for the credit by decreasing the quantity of payroll taxes they.