Lets talk first about How Do I Claim The Employee Retention Credit :
Our team here what do these guys doing everybody in this room is assisting teach individuals about ERC and uh always offer a beautiful breakfast and have individuals actually learn about the program we need to head to the room where we are able to display a few of the checks that we are getting for business and I ‘d like to see that what is this this is uh hundreds of millions of dollars literally Kevin numerous millions of dollars so these are duplicate copies of the letters that go to clients validating that the check is on the way I imply you understand if you just start 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 mean it’s simply I indicate think of how many 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 IRS heading to the client 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 up until they in fact get the cash they don’t pay bottom line Wonder trust anything up until this letter is validated the check is on the way they transfer it into their checking account and they can really trust Wonder trust that the process has been ended up and how many you believe you’ve processed given that you began this we’re about 35 000 of these for
about six billion dollars wow so plainly 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 really crucial today the staff member retention credit which most of you have never ever heard of I definitely hadn’t become aware of it until extremely just recently and found out a lot about it due to the fact that this is most likely the most affordable cost of capital for any small company anywhere
anytime if you have employees in between five and five hundred so I have actually got the professional 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 not easy this isn’t like PPP we just phone your bank manager and say offer me a loan it does not 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 enjoy this program it’s disappearing soon you got to discover all about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply begin there so during the Trump Administration when President Trump was enacted they created the cares Act and the cares act offered services 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 difference right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
remedy the cash money payroll tax refund all right go on sorry I just have to make certain we got that point I indicate that’s a huge difference a loan versus cash cash I like money cash that’s what we’re speaking about alright 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 tough check in the mail where you get actual money from the IRS all right so let’s speak about how it works due to the fact that it sounds like to me if it’s a if it’s staff member 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 shareholders it’s for employees right you had to have owned a service but it’s based upon you having W-2 staff members 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 eligible 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 six quarters the program was open well walk us through the six quarters so you had quarters 2 three and four of 2020 and you had quarters one 2 and 3 of 2021. fine so that’s how it’s determined you need to be on the W-2 throughout that period now let’s talk my favorite part money just how much can you get back per employee that was on a W-2 in those 6 quarters so the computation in 2020 to be exact Kevin is 50 of the employee’s salary to an optimum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers escalated to 70 of the staff member’s salary to an optimum of 7 thousand per quarter how did that happen um they just changed 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 up to five thousand Max and then what occurs 21 000 Max in 2021 oh that’s how you come up with twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty 6 thousand dollars per employee that is because that’s a lot of money it is now there’s a caveat here the PPP cash would need to be decreased from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would lower the 26 000 so what we’re seeing usually Kevin is if you took PPP money somewhere around ten thousand dollars an individual so let’s state hypothetically you owned a dining establishment in New York City where I’m from and you had a hundred employees and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s huge certainly now the huge concern is why does no one know about this since look when I first found out about this when I first met Josh you know I’ve got lots of financial investments in lots of companies I’m a major advocate for entrepreneurship in America and make many numerous financial investments in business owners of which many suffered through the pandemic when I first became aware of this I called BS I don’t believe 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 and that were well deserved and we utilized them sensibly to stay alive throughout the pandemic so when I found out about this I said nah it can’t hold true however when I dug around I even contacted us to my politician pals Guv Senators they didn’t learn about it I indicate 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 real so let’s ask Josh why does nobody know about the employee retention credit you understand what’s interesting you’re talking about the banks Kevin since in the PPP loan process 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 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 procedure process that’s all um and here there was chaos because keep in mind in the initial cares act you could not do both programs so if you had actually done PPP you might refrain from doing ERC in the original program and when they altered 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 really he or she’s never 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 company your accountant no your accounting professional’s never done this before unless you have an account that entered into this service and bottom line my company Kevin has stayed in business since 2009 and we’ve been dealing 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 clients have actually dealt with bottom line to recuperate other government programs we’ve done sales tax and utilize tax unemployment tax work chance tax credits research and development tax credits unclaimed home real estate tax all of these other government programs.
The staff member retention tax credit is a broad based refundable tax credit created to encourage.
companies to keep workers on their payroll. The credit is 50% of as much as $10,000 in salaries paid by an.
company whose business is fully or partly 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.
companies who take Small Business Loans.
2. To certify, the employer has to fulfill one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s business 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 below 50% of the comparable quarter in 2019. Once the.
employer’s gross invoices exceed 80% of an equivalent quarter in 2019 they no longer qualify.
after completion of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the qualifying wages paid up to $10,000 in total.
It works for incomes paid after March 13th and before December 31, 2020.
The meaning of certifying wages varies by whether an employer had, typically, more or less than.
100 employees in 2019.
Companies that focus on ERC filing support normally supply expertise and support to assist services navigate the intricate procedure of declaring the credit. They can offer different services, including:.
How is the employee retention credit calculated? How Do I Claim The Employee Retention Credit
Eligibility Assessment: These business will examine your business’s eligibility for the ERC based upon elements such as your market, profits, and operations. They can help determine if you meet the requirements for the credit and identify the maximum credit quantity you can claim.
Paperwork and Calculation: ERC filing services will assist in gathering the essential paperwork, such as payroll records and financial declarations, to support your claim. They will also help compute the credit quantity based upon qualified salaries and other qualifying expenditures.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for previous quarters, these companies can review your previous payroll records and financials to identify possible chances for retroactive credits. They can assist you amend prior tax returns to claim these refunds.
Filing Assistance: Companies specializing in ERC filings will prepare and submit the necessary kinds and documents in your place. This includes finishing Type 941 or any other necessary tax return.
Compliance and Updates: ERC guidelines and assistance have actually progressed in time. These business stay updated with the latest modifications and make sure that your filings abide by the most existing guidelines. If the Internal revenue service requests extra info or conducts an audit associated to your ERC claim, they can also provide continuous assistance.
It’s important to research study and veterinarian any company using ERC filing support to guarantee their credibility and proficiency. Search for established firms with experience in tax and payroll services, or think about reaching out to relied on accounting firms or tax specialists who provide ERC filing support.
Bear in mind that while these business can provide valuable support, it’s always a good idea to have a basic understanding of the ERC requirements and procedure yourself. This will help you make notified decisions 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 steps. The objective of the ERC is to motivate businesses to keep and pay their staff members throughout the pandemic, even if their operations have actually been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to eligible companies, including for-profit businesses, tax-exempt companies, and specific governmental entities. To qualify, companies should meet one of two criteria:.
Business operations were fully or partly suspended due to a government order related to COVID-19.
The business experienced a significant decrease in gross invoices. As discussed previously, for 2021, a significant decline is defined as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a significant decline is defined 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 instantly preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit amount is equal to a percentage (up to 70%) of qualified earnings paid to staff members, including particular health insurance costs. The optimum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, organizations that received an Income Defense Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 allows organizations to claim the ERC even if they received a PPP loan. The very same salaries can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and boosted, allowing qualified companies to declare the credit for certified wages paid as far back as March 13, 2020. This retroactive provision supplies an opportunity for services to change prior-year income tax return and get refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their employment tax returns, normally Kind 941. If the credit goes beyond the quantity of employment taxes owed, the excess can be reimbursed to the company.
It’s important to note that the ERC arrangements and eligibility requirements have progressed in time. The best course of action is to consult with a tax professional or check out the main IRS site for the most up-to-date and in-depth details relating to the ERC, consisting of any current legal changes or updates.
To qualify for the ERC, a service must fulfill one of the following criteria:.
The business operations were fully or partly suspended due to a government order related to COVID-19.
Business experienced a substantial decrease in gross receipts. For 2021, a considerable decline is specified as a 20% decline in gross invoices compared to the exact 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% decrease in gross invoices compared to the instantly preceding quarter.
The ERC is readily available to organizations of all sizes, including tax-exempt organizations, but there are some exceptions. Federal government entities and businesses that received a PPP loan may have restrictions on claiming the credit.
The process for declaring the ERC includes finishing the essential types and including the credit on your work tax return (typically Type 941). The exact time it takes to process the credit can differ based on several factors, including the intricacy of your organization and the workload of the internal revenue service. It’s recommended to speak with a tax professional for guidance specific to your circumstance.
There are numerous companies that can aid with the procedure of claiming the ERC. These include accounting firms, tax advisory services, and payroll company. Some widely known companies that use support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research study and call these business directly to inquire about their fees and services.
Please note that the information offered here is based upon general knowledge and might not show the most recent updates or changes to the ERC. It is necessary to seek advice from a tax professional or visit the official internal revenue service site for the most precise and current details regarding eligibility, claiming procedures, and offered help.
Less than 100. If the employer had 100 or fewer staff members usually in 2019, then the credit is based.
on wages paid to all staff members whether they in fact worked or not. In other words, even if the.
staff members worked full-time and earned money for full time work, the company still gets the credit.
Greater than 100. If the company had more than 100 staff members usually in 2019, then the credit is.
enabled just for incomes paid to workers who did not work throughout the calendar quarter.
In both cases, “salaries” consists of not simply money payments but likewise a portion of the cost of employer.
supplied healthcare. How Do I Claim The Employee Retention Credit
Companies can be instantly repaid for the credit by decreasing the amount of payroll taxes they.