Lets talk first about How Do I Calculate The Employee Retention Credit :
Our group here what do these guys doing everyone in this room is helping teach people about ERC and uh constantly provide a stunning breakfast and have individuals really find out about the program we should head to the space where we are able to display some 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 countless dollars so these are replicate copies of the letters that go to customers validating that the check is on the way I imply you know if you just start to look at some 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 about the number of 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 verified 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
get this you know the check is opted for sure which’s when they pay so they do not pay anything until they really get the cash they do not pay bottom line Wonder trust anything up until this letter is confirmed 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 ended up and how many you think you have actually processed because you began this we have to do with 35 000 of these for
about 6 billion dollars wow so clearly they know what they’re doing which’s what you require you need 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 Fantastic here you’re at my YouTube channel we’re discussing something truly crucial today the employee retention credit which the majority of you have never ever become aware of I definitely hadn’t heard of it until extremely recently and learned a lot about it since this is probably the most affordable cost of capital for any small company anywhere
anytime if you have workers between five and five hundred so I have actually got the expert with me this is Josh Fox he’s the creator and CEO of bottom line Ideas 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 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’ve ended up being yes the Ambassador and paid representative for this I enjoy this program it’s disappearing soon you got to learn all about it let’s talk worker retention credit Josh Fox what is an ERC let’s simply start there so during the Trump Administration when President Trump was enacted they came up with 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 everybody it makes a big difference right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
fix the cash money payroll tax refund fine go on sorry I just have to ensure we got that point I mean that’s a huge distinction a loan versus money cash I like cash 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 initial cares Act is the ERC and yes Kevin it is a gorgeous difficult check in the mail where you get actual money from the IRS all right so let’s talk about how it works since it sounds like to me if it’s a if it’s employee retention credit that person 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 a company 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 eligible so you have 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 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 two and 3 of 2021. fine so that’s how it’s measured you need to be on the W-2 during that duration now let’s talk my favorite part cash how much can you get back per staff member that was on a W-2 in those 6 quarters so the estimation in 2020 to be specific Kevin is 50 of the worker’s income to an optimum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers increased to 70 of the staff member’s income to an optimum of seven thousand per quarter how did that happen um they simply altered the rules in.
2021 versus due to the fact that the mayhem of the pandemic so they wanted 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 then what takes place 21 000 Max in 2021 oh that’s how you develop twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty six thousand dollars per worker that is because that’s a lot of cash it is now there’s a caveat here the PPP cash would have to be lowered from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would minimize the 26 000 so what we’re seeing on average Kevin is if you took PPP money 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 workers and you took PPP cash you would still get a million dollar in the mail from the IRS so it’s huge undoubtedly now the big question is why does no one learn about this due to the fact that look when I initially heard about this when I initially fulfilled Josh you know I’ve got great deals of financial investments in lots of business I’m a major advocate for entrepreneurship in America and make many many financial investments in entrepreneurs of which lots of suffered through the pandemic when I first became aware of this I called BS I do not think it due to the fact that I utilize 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 which were well deserved and we utilized them sensibly to survive throughout 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 friends Guv Senators they didn’t understand about it I imply that’s how you understand that’s how false information is that there’s no information out there then a lot of individuals told me well you can’t get it due to the fact that you took the PPP likewise not real so let’s ask Josh why does no one learn about the employee retention credit you understand what’s intriguing you’re discussing the banks Kevin since in the PPP loan procedure the federal government made it really 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 procedure procedure that’s all um and here there was mayhem because 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 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 any person about how to.
do this does your CFO know how to do this not actually he or she’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 accounting professional’s never ever done this before unless you have an account that entered into this service and bottom line my company Kevin has actually been in business given that 2009 and we have actually been working with the federal government and the state government to recover money for Fortune 500 Fortune 1000 business so a great deal of our big huge business customers have worked with bottom line to recover other federal government programs we’ve done sales tax and use tax joblessness tax work chance tax credits research and development tax credits unclaimed property real estate tax all of these other federal government programs.
The worker retention tax credit is a broad based refundable tax credit created to encourage.
employers to keep workers on their payroll. The credit is 50% of approximately $10,000 in earnings paid by an.
company whose company is totally or partly suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is readily available to all companies no matter size including tax exempt organizations. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) small.
companies who take Small Business Loans.
2. To qualify, the company has to satisfy one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s business is completely or partly suspended by government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross invoices are listed below 50% of the equivalent quarter in 2019. Once the.
employer’s gross invoices go above 80% of a comparable quarter in 2019 they no longer qualify.
after completion of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the certifying salaries paid up to $10,000 in overall.
It works for earnings paid after March 13th and before December 31, 2020.
The meaning of certifying earnings differs by whether a company had, usually, basically than.
100 staff members in 2019.
Business that specialize in ERC filing help usually offer expertise and assistance to help companies browse the complicated procedure of claiming the credit. They can use various services, including:.
How is the employee retention credit calculated? How Do I Calculate The Employee Retention Credit
Eligibility Evaluation: These business will assess your organization’s eligibility for the ERC based upon factors such as your market, profits, and operations. If you fulfill the requirements for the credit and determine the optimum credit quantity you can claim, they can help determine.
Documents and Computation: ERC filing services will help in collecting the necessary documents, such as payroll records and monetary statements, to support your claim. They will also help compute the credit quantity based on qualified salaries and other qualifying costs.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for previous quarters, these business can review your past payroll records and financials to identify potential chances for retroactive credits. They can assist you change previous tax returns to claim these refunds.
Filing Support: Business focusing on ERC filings will prepare and submit the necessary types and paperwork in your place. This consists of completing Type 941 or any other required tax forms.
Compliance and Updates: ERC policies and guidance have progressed gradually. These companies stay updated with the latest modifications and make sure that your filings abide by the most current guidelines. If the IRS demands additional information or conducts an audit associated to your ERC claim, they can also provide continuous assistance.
It’s important to research study and vet any business using ERC filing help to ensure their reliability and proficiency. Search for established companies with experience in tax and payroll services, or consider reaching out to trusted accounting firms or tax experts who offer ERC filing support.
Keep in mind that while these companies can provide valuable help, it’s always an excellent concept to have a fundamental understanding of the ERC requirements and process yourself. This will help you make notified decisions and make sure accurate filings.
The Worker Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief procedures. The goal of the ERC is to motivate services to retain and pay their workers during the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to eligible companies, consisting of for-profit businesses, tax-exempt organizations, and particular governmental entities. To qualify, companies must fulfill one of two criteria:.
The business operations were totally or partially suspended due to a federal government order related to COVID-19.
Business experienced a significant decrease in gross invoices. As mentioned earlier, for 2021, a considerable decline is specified as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a substantial decline is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decline in gross invoices compared to the immediately preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity is equal to a percentage (as much as 70%) of qualified earnings paid to employees, including specific health insurance costs. The maximum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, companies that received an Income Defense Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 enables services to claim the ERC even if they got a PPP loan. The same earnings can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and boosted, enabling qualified employers to claim the credit for certified wages paid as far back as March 13, 2020. This retroactive arrangement provides an opportunity for companies to modify prior-year tax returns and receive refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their employment income tax return, normally Type 941. The excess can be reimbursed to the company if the credit goes beyond the quantity of employment taxes owed.
It is very important to note that the ERC provisions and eligibility criteria have developed gradually. The very best strategy is to talk to a tax professional or visit the main internal revenue service site for the most up-to-date and in-depth info concerning the ERC, including any current legislative changes or updates.
To get approved for the ERC, a business needs to satisfy among the following requirements:.
Business operations were completely or partly suspended due to a federal government order related to COVID-19.
Business experienced a substantial decrease in gross receipts. For 2021, a significant decrease is specified as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
The ERC is available to services of all sizes, consisting of tax-exempt companies, but there are some exceptions. For example, government entities and organizations that received a PPP loan may have restrictions on claiming the credit.
The process for claiming the ERC involves finishing the required forms and consisting of the credit on your work tax return (normally Type 941). The exact time it requires to process the credit can differ based upon a number of factors, consisting of the intricacy of your service and the work of the internal revenue service. It’s advised to talk to a tax expert for guidance specific to your situation.
There are a number of business that can assist with the process of claiming the ERC. These consist of accounting companies, tax advisory services, and payroll provider. Some popular business that use help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research and call these business directly to ask about their services and costs.
Please keep in mind that the info supplied here is based on basic knowledge and might not show the most recent updates or modifications to the ERC. It is very important to seek advice from a tax expert or check out the official internal revenue service website for the most precise and updated information regarding eligibility, claiming treatments, and readily available assistance.
Less than 100. The credit is based if the employer had 100 or less workers on average in 2019.
on incomes paid to all workers whether they really worked or not. In other words, even if the.
workers 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.
enabled just for wages paid to staff members who did not work during the calendar quarter.
In both cases, “earnings” consists of not simply cash payments however likewise a portion of the expense of employer.
supplied health care. How Do I Calculate The Employee Retention Credit
Companies can be instantly reimbursed for the credit by decreasing the amount of payroll taxes they.