Lets talk first about Federal Employee Retention Credit Program :
Our group here what do these men doing everyone in this space is helping teach people about ERC and uh always supply a stunning breakfast and have individuals actually discover the program we ought to head to the room where we have the ability to show a few of the checks that we are getting for business and I wish to see that what is this this is uh numerous countless dollars literally Kevin numerous countless dollars so these are replicate copies of the letters that go to customers confirming that the check is on the way I mean you understand if you simply begin to take a look at some 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 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 verified the numbers are verified 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 understand when you
receive this you understand the check is chosen sure and that’s when they pay so they do not pay anything till they actually 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 checking account and they can really trust Wonder trust that the procedure has been finished and the number of you think you have actually processed considering that you started this we have to do with 35 000 of these for
about six billion dollars wow so clearly they know what they’re doing which’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 Fantastic here you’re at my YouTube channel we’re discussing something truly important today the worker retention credit which most of you have actually never ever become aware of I definitely hadn’t heard of it up until really just recently and discovered a lot about it because this is most likely the lowest expense of capital for any small business anywhere
anytime if you have staff members between 5 and five hundred so I’ve got the professional with me this is Josh Fox he’s the founder and CEO of bottom line Principles they’re the biggest processor of these ERC credits this is a 170 page program so it’s hard this isn’t like PPP we simply call up your bank manager and say offer me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to tell 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 like this program it’s disappearing very soon you got to discover everything about it let’s talk worker 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 offered services three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everyone it makes a big difference right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the money money payroll tax refund all right go on sorry I just have to make certain we got that point I imply that’s a big difference a loan versus money money I like cash cash that’s what we’re discussing 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 real money 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 worker retention credit that person had to be an employee 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 staff members right you had to have owned a business however it’s based upon you having W-2 staff members 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 need 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 3 and 4 of 2020 and you had quarters one 2 and three of 2021. fine so that’s how it’s determined you have to be on the W-2 throughout that period now let’s talk my preferred part cash just how much can you get back per employee that was on a W-2 in those six quarters so the calculation in 2020 to be specific Kevin is 50 of the worker’s income to a maximum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the employee’s salary to a maximum of 7 thousand per quarter how did that take place um they just changed the rules in.
2021 versus since the mayhem of the pandemic so they wanted to even get more to keep those workers 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 employee that is since that’s a lot of cash it is now there’s a caution here the PPP money would have to be minimized from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would decrease the 26 000 so what we’re seeing usually Kevin is if you took PPP cash somewhere around 10 thousand dollars a person so let’s say hypothetically you owned a dining establishment in New york city 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 concern is why does nobody learn about this because look when I initially heard about this when I initially fulfilled Josh you understand I’ve got lots of financial investments in lots of business I’m a significant advocate for entrepreneurship in America and make many lots of investments in business owners of which lots of suffered through the pandemic when I initially heard about this I called BS I don’t think it due to the fact that I use the PPP we went through the money center Banks to get it it was extremely easy to do we had our CEOs call the banks they got their loans and that were well deserved and we utilized them sensibly to survive during the pandemic so when I found out about this I said nah it can’t be true but when I dug around I even called to my politician buddies Governor Senators they didn’t understand about it I imply that’s how you know that’s how misinformation is that there’s no info out there then a bunch of individuals told me well you can’t get it because you took the PPP also not real so let’s ask Josh why does nobody understand about the worker retention credit you know what’s interesting you’re discussing the banks Kevin due to the fact that in the PPP loan procedure the federal government made it very clear that if you desired a PPP loan you would call Wells Fargo Citibank Bank of America any of the big 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 just process procedure that’s all um and here there was turmoil due to the fact that keep in mind in the initial cares act you could not do both programs so if you had actually done PPP you could not do 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 government never ever made it clear to any person about how to.
do this does your CFO understand how to do this not truly she or he’s never ever 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 ever done this prior to unless you have an account that entered into this service and bottom line my firm Kevin has actually been in business since 2009 and we have actually been working with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 business so a great deal of our huge big business clients have actually dealt with bottom line to recover other government programs we’ve done sales tax and utilize tax joblessness 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 designed to motivate.
companies to keep workers on their payroll. The credit is 50% of as much as $10,000 in salaries paid by an.
employer whose organization is totally or partly suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
1. The credit is offered to all companies despite size consisting of tax exempt companies. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) little.
organizations who take Small Business Loans.
2. To certify, the company needs to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s company is fully or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are listed below 50% of the similar quarter in 2019. Once the.
employer’s gross receipts exceed 80% of an equivalent quarter in 2019 they no longer certify.
after the end of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the qualifying wages paid up to $10,000 in overall.
It is effective for earnings paid after March 13th and before December 31, 2020.
The meaning of certifying salaries varies by whether a company had, on average, more or less than.
100 workers in 2019.
Business that focus on ERC filing help usually offer know-how and support to assist companies browse the complex procedure of claiming the credit. They can use different services, including:.
How is the employee retention credit calculated? Federal Employee Retention Credit Program
Eligibility Evaluation: These business will evaluate your organization’s eligibility for the ERC based upon elements such as your market, profits, and operations. They can help figure out if you fulfill the requirements for the credit and recognize the maximum credit amount you can declare.
Paperwork and Computation: ERC filing services will assist in gathering the essential paperwork, such as payroll records and monetary declarations, to support your claim. They will also help compute the credit quantity based on qualified earnings and other qualifying costs.
Retroactive Claim Review: If you are qualified to claim the ERC for previous quarters, these companies can evaluate your past payroll records and financials to identify possible opportunities for retroactive credits. They can assist you amend prior tax returns to declare these refunds.
Filing Help: Companies concentrating on ERC filings will prepare and submit the needed forms and documentation in your place. This includes completing Type 941 or any other required tax return.
Compliance and Updates: ERC guidelines and assistance have actually progressed with time. These companies remain upgraded with the current changes and guarantee that your filings adhere to the most current standards. If the IRS demands additional info or conducts an audit associated to your ERC claim, they can likewise provide continuous assistance.
It is very important to research study and veterinarian any company providing ERC filing assistance to ensure their credibility and know-how. Look for established firms with experience in tax and payroll services, or consider connecting to relied on accounting companies or tax specialists who use ERC filing support.
Remember that while these business can supply valuable support, it’s always an excellent concept to have a standard understanding of the ERC requirements and process yourself. This will help you make notified decisions and ensure precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief procedures. The goal of the ERC is to motivate services to retain and pay their staff members during the pandemic, even if their operations have been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to eligible companies, including for-profit companies, tax-exempt organizations, and certain governmental entities. To certify, employers must fulfill one of two criteria:.
The business operations were fully or partially suspended due to a federal government order related to COVID-19.
The business experienced a considerable decline in gross invoices. As mentioned previously, for 2021, a significant decline is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross invoices compared to the right away preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit quantity is equal to a percentage (approximately 70%) of qualified salaries paid to staff members, including particular health insurance 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: At first, companies that received an Income Security Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 enables companies to claim the ERC even if they got a PPP loan. The exact same earnings can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively broadened and enhanced, enabling eligible employers to claim the credit for certified earnings paid as far back as March 13, 2020. This retroactive provision offers a chance for companies to change prior-year tax returns and receive refunds.
Declaring the Credit: Employers can declare the ERC by reporting it on their employment tax returns, typically Form 941. If the credit surpasses the quantity of work taxes owed, the excess can be reimbursed to the employer.
It is essential to note that the ERC provisions and eligibility criteria have actually developed gradually. The best strategy is to talk to a tax professional or check out the main IRS website for the most up-to-date and comprehensive info regarding the ERC, including any recent legislative modifications or updates.
To qualify for the ERC, a service must satisfy one of the following criteria:.
The business operations were completely or partially suspended due to a federal government order related to COVID-19.
Business experienced a considerable decline in gross invoices. For 2021, a significant decrease is defined as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the instantly preceding quarter.
The ERC is offered to businesses of all sizes, consisting of tax-exempt companies, but there are some exceptions. For example, federal government entities and services that received a PPP loan might have restrictions on declaring the credit.
The procedure for claiming the ERC involves finishing the needed types and consisting of the credit on your work tax return (usually Form 941). The exact time it takes to process the credit can vary based upon numerous elements, consisting of the intricacy of your organization and the work of the IRS. It’s recommended to seek advice from a tax professional for guidance particular to your circumstance.
There are several companies that can help with the process of claiming the ERC. Some popular companies that provide assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the details provided here is based upon basic understanding and might not reflect the most current updates or modifications to the ERC. It is necessary to consult with a tax professional or check out the official IRS website for the most up-to-date and precise information regarding eligibility, claiming treatments, and readily available help.
Less than 100. The credit is based if the company had 100 or fewer staff members on average in 2019.
on wages paid to all workers whether they actually worked or not. Simply put, even if the.
workers worked full-time and made money for full time work, the company still gets the credit.
Greater than 100. If the employer had more than 100 employees usually in 2019, then the credit is.
allowed only for wages paid to employees who did not work throughout the calendar quarter.
In both cases, “wages” includes not simply money payments but likewise a part of the cost of company.
provided healthcare. Federal Employee Retention Credit Program
Companies can be immediately reimbursed for the credit by minimizing the amount of payroll taxes they.