Lets talk first about How Do I Calculate Employee Retention Credit :
Our group here what do these guys doing everybody in this room is assisting teach people about ERC and uh constantly supply a beautiful breakfast and have people truly learn about the program we should head to the space where we have the ability to show a few 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 hundreds of countless dollars so these are duplicate copies of the letters that go to customers verifying that the check is on the method I suggest you understand if you simply start to take a look at a few of these here I suggest this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s simply I suggest think about the number of real customers that went through the program yeah this is the very end this is the celebration at the end when the check is validated the numbers are verified and the check is on the mail in the mail from the internal revenue service heading to the customer so that’s how you’re able to track it you know when you
get this you understand the check is chosen sure which’s when they pay so they don’t pay anything until they in fact get the cash they do not pay bottom line Wonder trust anything until this letter is verified the check is on the method they deposit it into their checking account and they can really rely on Wonder trust that the process has actually been ended up and the number of you believe you’ve processed considering that 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 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 speaking about something really essential today the staff member retention credit which most of you have never ever become aware of I definitely had not become aware of it up until really recently and discovered a lot about it because this is probably the most affordable cost of capital for any small company anywhere
anytime if you have staff members between five 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 hard 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 all of us about it and how to get it and why I have actually become yes the Ambassador and paid representative for this I enjoy this program it’s disappearing very soon you got to learn all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just start there so throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act offered services 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 precisely so the ERC is a refund that’s.
correct the money money payroll tax refund fine go on sorry I simply need to ensure we got that point I imply that’s a big difference a loan versus cash cash I like cash money that’s what we’re talking 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 initial cares Act is the ERC and yes Kevin it is a gorgeous hard check in the mail where you get actual cash from the internal revenue service 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 individual had to be a worker so I’m going to make the Assumption this money is not for the owner not for people on the cap table not for investors it’s for workers right you had to have owned a service however it’s based on you having W-2 workers 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 qualified so you need to be on payroll in 2020 on the W-2 and you need to be on payroll for the very first six months of 2021 on the W-2 right so there were six quarters the program was open well walk us through the six quarters so you had quarters 2 3 and 4 of 2020 and you had quarters one two and 3 of 2021. okay so that’s how it’s measured you have to be on the W-2 during that duration now let’s talk my favorite part cash just how much can you return per staff member that was on a W-2 in those six quarters so the calculation in 2020 to be exact Kevin is 50 of the worker’s salary to an optimum of 5 thousand dollars per staff member for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the employee’s wage to a maximum of 7 thousand per quarter how did that happen um they simply altered 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 as much as five thousand Max and after that what happens 21 000 Max in 2021 oh that’s how you create 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 caution here the PPP money would have to be minimized from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would lower the 26 000 so what we’re seeing usually Kevin is if you took PPP money someplace around 10 thousand dollars a person so let’s state hypothetically you owned a dining establishment in New york city City where I’m from and you had a hundred workers and you took PPP cash you would still get a million dollar in the mail from the IRS so it’s substantial clearly now the huge question is why does nobody know about this due to the fact that look when I initially became aware of this when I initially satisfied Josh you know I’ve got great deals of investments in lots of business I’m a major advocate for entrepreneurship in America and make lots of numerous investments in entrepreneurs of which lots of suffered through the pandemic when I first heard about this I called BS I do not believe it since 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 been worthy of and we used them wisely to survive throughout the pandemic so when I heard about this I said nah it can’t hold true however when I dug around I even called to my politician pals Guv Senators they didn’t learn about it I mean that’s how you know that’s how misinformation is that there’s no information out there then a lot of individuals told me well you can’t get it since you took the PPP also not true so let’s ask Josh why does no one know about the worker retention credit you know what’s intriguing you’re talking about the banks Kevin because in the PPP loan process the federal government made it extremely 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 just process process that’s all um and here there was turmoil because remember in the original cares act you might not do both programs so if you had done PPP you could not do ERC in the original program and when they altered the law in 2021 the banks were refraining from doing ERC because 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 she or he’s never done it previously do the banks do it nope the banks do not do it the payroll companies yeah a few of them are doing it as a payroll company your accounting professional no your accounting professional’s never done this prior to unless you have an account that entered into this company and bottom line my company Kevin has actually stayed in business considering that 2009 and we have actually been working with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 companies so a great deal of our big big corporate customers have worked with bottom line to recuperate other government programs we’ve done sales tax and utilize tax unemployment 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 created to motivate.
employers to keep workers on their payroll. The credit is 50% of as much as $10,000 in incomes paid by an.
Since of COVID-19 or whose gross receipts, company whose business is completely or partly suspended.
decline by more than 50%.
1. The credit is available to all employers regardless of size consisting of tax exempt companies. There are.
just two exceptions: (1) state and city governments and their instrumentalities and (2) little.
services who take Small Business Loans.
2. To qualify, the employer needs to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s business is fully or partially suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross invoices are below 50% of the similar quarter in 2019. As soon as the.
employer’s gross receipts go above 80% of a comparable 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 certifying wages paid up to $10,000 in overall.
It works for wages paid after March 13th and before December 31, 2020.
The definition of certifying earnings varies by whether an employer had, on average, more or less than.
100 workers in 2019.
Business that focus on ERC filing assistance generally supply competence and support to help companies navigate the complicated procedure of claiming the credit. They can use numerous services, including:.
How is the employee retention credit calculated? How Do I Calculate Employee Retention Credit
Eligibility Assessment: These companies will evaluate your business’s eligibility for the ERC based on aspects such as your market, revenue, and operations. They can help figure out if you meet the requirements for the credit and determine the maximum credit amount you can claim.
Documents and Computation: ERC filing services will help in collecting the required documents, such as payroll records and financial declarations, to support your claim. They will also assist determine the credit amount based on qualified incomes and other certifying expenditures.
Retroactive Claim Review: If you are qualified to claim the ERC for prior quarters, these companies can examine your previous payroll records and financials to determine possible chances for retroactive credits. They can assist you change previous income tax return to claim these refunds.
Filing Help: Companies focusing on ERC filings will prepare and send the essential forms and paperwork on your behalf. This includes completing Type 941 or any other necessary tax forms.
Compliance and Updates: ERC policies and assistance have developed with time. These companies stay upgraded with the most recent modifications and make sure that your filings comply with the most present standards. They can also supply ongoing assistance if the IRS demands extra info or conducts an audit related to your ERC claim.
It is necessary to research study and veterinarian any business providing ERC filing help to guarantee their trustworthiness and proficiency. Search for established firms with experience in tax and payroll services, or consider reaching out to relied on accounting companies or tax experts who provide ERC submitting assistance.
Remember that while these business can provide important assistance, it’s constantly an excellent concept to have a basic understanding of the ERC requirements and procedure yourself. This will assist you make informed choices and guarantee accurate filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief measures. The goal of the ERC is to encourage businesses to maintain and pay their staff members during the pandemic, even if their operations have been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to qualified employers, consisting of for-profit companies, tax-exempt companies, and specific governmental entities. To certify, employers should meet one of two requirements:.
The business operations were fully or partially suspended due to a federal government order related to COVID-19.
The business experienced a significant decline in gross invoices. As discussed previously, for 2021, a substantial decrease is specified as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a substantial decrease is defined 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.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount amounts to a percentage (as much as 70%) of qualified earnings paid to staff members, including particular health plan expenses. The optimum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, services that got a Paycheck Security Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 enables businesses to claim the ERC even if they received a PPP loan. The very same incomes can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and enhanced, allowing qualified employers to declare the credit for qualified earnings paid as far back as March 13, 2020. This retroactive arrangement provides a chance for organizations to amend prior-year income tax return and receive refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their work tax returns, typically Form 941. If the credit exceeds the quantity of employment taxes owed, the excess can be reimbursed to the company.
It is necessary to keep in mind that the ERC provisions and eligibility criteria have actually progressed gradually. The best course of action is to seek advice from a tax professional or go to the main internal revenue service site for the most in-depth and up-to-date info concerning the ERC, consisting of any current legal modifications or updates.
To receive the ERC, a service must satisfy among the following criteria:.
Business operations were completely or partly suspended due to a federal government order related to COVID-19.
Business experienced a significant decrease in gross invoices. For 2021, a considerable decrease is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
The ERC is offered to services of all sizes, including tax-exempt companies, but there are some exceptions. For example, federal government entities and services that received a PPP loan may have limitations on claiming the credit.
The procedure for claiming the ERC involves finishing the necessary forms and including the credit on your work tax return (normally Form 941). The exact time it requires to process the credit can differ based upon a number of aspects, including the intricacy of your business and the workload of the IRS. It’s advised to speak with a tax expert for guidance particular to your scenario.
There are numerous business that can help with the procedure of claiming the ERC. These include accounting firms, tax advisory services, and payroll provider. Some widely known companies that provide help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research and get in touch with these companies straight to inquire about their charges and services.
Please keep in mind that the info offered here is based upon basic knowledge and may not show the most recent updates or modifications to the ERC. It is essential to talk to a tax expert or visit the official internal revenue service site for the most precise and current info concerning eligibility, claiming procedures, and readily available help.
Less than 100. The credit is based if the employer had 100 or less employees on average in 2019.
on earnings paid to all workers whether they really worked or not. In other words, even if the.
employees worked full time and got paid for full time work, the employer still gets the credit.
Greater than 100. If the employer had more than 100 workers on average in 2019, then the credit is.
permitted only for earnings paid to workers who did not work throughout the calendar quarter.
In both cases, “incomes” consists of not simply money payments but also a portion of the cost of company.
offered health care. How Do I Calculate Employee Retention Credit
Employers can be right away repaid for the credit by reducing the quantity of payroll taxes they.