Lets talk first about How Do You Calculate The Employee Retention Credit :
Our team here what do these men doing everyone in this space is helping teach people about ERC and uh constantly supply a stunning breakfast and have individuals truly discover the program we need to head to the space where we have the ability to show 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 countless dollars so these are duplicate copies of the letters that go to customers verifying that the check is on the way I imply you know if you simply begin to 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 mean consider how many 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 confirmed and the check is on the mail in the mail from the IRS heading to the customer so that’s how you’re able 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 actually 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 bank account and they can truly trust Wonder trust that the procedure has actually been finished and how many you think you’ve processed because you started this we have to do with 35 000 of these for
about 6 billion dollars wow so plainly they understand 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 Terrific here you’re at my YouTube channel we’re speaking about something actually essential today the worker retention credit which the majority of you have actually never ever heard of I certainly hadn’t become aware of it until really recently and found out a lot about it since this is probably the lowest expense of capital for any small business anywhere
anytime if you have employees in between five and five hundred so I’ve got the professional with me this is Josh Fox he’s the creator and CEO of bottom line Concepts 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 simply contact your bank manager and state provide me a loan it does not 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 become yes the Ambassador and paid spokesperson for this I love this program it’s going away very soon you got to learn all about it let’s talk employee 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 provided companies 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everyone it makes a huge difference right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the money money payroll tax refund fine go on sorry I simply have to make certain we got that point I indicate that’s a huge difference a loan versus cash money I like money 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 beautiful tough check in the mail where you get real money from the internal revenue service all right so let’s talk about how it works because it sounds like to me if it’s a if it’s staff member retention credit that individual needed to be a worker so I’m going to make the Assumption this cash 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 company however it’s based upon you having W-2 employees in America not 10.99. so as long as you had W-2 workers 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 first 6 months of 2021 on the W-2 right so there were six quarters the program was open well stroll us through the 6 quarters so you had quarters two three and 4 of 2020 and you had quarters one two and 3 of 2021. all right so that’s how it’s measured you need to be on the W-2 during that period now let’s talk my preferred part cash how much can you get back per staff member that was on a W-2 in those 6 quarters so the computation in 2020 to be precise Kevin is 50 of the employee’s wage to a maximum of 5 thousand dollars per staff member for the year of 2020 and in 2021 the numbers increased to 70 of the employee’s salary to an optimum of 7 thousand per quarter how did that happen um they simply altered the rules in.
2021 versus due to the fact that the chaos 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 five thousand Max and then what happens 21 000 Max in 2021 oh that’s how you come up with twenty 6 thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per worker that is because that’s a great deal of money it is now there’s a caution here the PPP money would have to be decreased 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 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 money you would still get a million dollar in the mail from the IRS so it’s huge obviously now the big concern is why does nobody know about this because appearance when I initially heard about this when I first met Josh you understand I have actually got great deals of financial investments in lots of companies I’m a major advocate for entrepreneurship in America and make lots of numerous financial investments in entrepreneurs of which lots of suffered through the pandemic when I initially found out about this I called BS I don’t believe it due to the fact that I use 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 used them sensibly to stay alive 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 political leader pals Governor Senators they didn’t know about it I mean that’s how you understand that’s how misinformation is that there’s no details out there then a lot of individuals informed me well you can’t get it since you took the PPP also not true so let’s ask Josh why does no one understand about the staff member retention credit you understand what’s fascinating you’re discussing the banks Kevin since in the PPP loan procedure the federal government made it very 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 simply procedure procedure that’s all um and here there was chaos due to the fact that remember in the initial cares act you might refrain from doing both programs so if you had done PPP you could not do ERC in the original 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 ever made it clear to anyone about how to.
do this does your CFO understand how to do this not actually 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 accounting professional no your accountant’s never ever done this before unless you have an account that went into this organization and bottom line my firm Kevin has actually stayed in business given that 2009 and we have actually been working with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 business so a lot of our huge huge corporate customers have worked with bottom line to recover 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 designed to encourage.
employers to keep workers on their payroll. The credit is 50% of approximately $10,000 in wages paid by an.
company whose business is fully or partially suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
1. The credit is offered to all employers despite size consisting of tax exempt organizations. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
companies who take Small company Loans.
2. To qualify, the company has to meet one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s business is totally or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are below 50% of the similar quarter in 2019. Once the.
employer’s gross receipts exceed 80% of a comparable quarter in 2019 they no longer certify.
after the end of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the certifying wages paid up to $10,000 in total.
It works for incomes paid after March 13th and prior to December 31, 2020.
The meaning of qualifying wages differs by whether an employer had, typically, more or less than.
100 staff members in 2019.
Companies that focus on ERC filing support usually provide know-how and assistance to help companies navigate the complicated procedure of declaring the credit. They can use various services, consisting of:.
How is the employee retention credit calculated? How Do You Calculate The Employee Retention Credit
Eligibility Assessment: These companies will evaluate your service’s eligibility for the ERC based on factors such as your market, revenue, and operations. They can help identify if you satisfy the requirements for the credit and identify the optimum credit quantity you can declare.
Documents and Calculation: ERC filing services will assist in collecting the required paperwork, such as payroll records and financial declarations, to support your claim. They will likewise help calculate the credit quantity based upon eligible earnings and other certifying costs.
Retroactive Claim Review: If you are eligible to declare the ERC for previous quarters, these companies can examine your previous payroll records and financials to determine prospective opportunities for retroactive credits. They can help you amend prior tax returns to claim these refunds.
Filing Assistance: Business concentrating on ERC filings will prepare and submit the essential types and paperwork on your behalf. This consists of completing Form 941 or any other necessary tax forms.
Compliance and Updates: ERC policies and guidance have actually evolved gradually. These companies remain upgraded with the latest modifications and make sure that your filings adhere to the most present standards. They can also provide continuous support if the IRS demands extra information or conducts an audit related to your ERC claim.
It is very important to research and veterinarian any business offering ERC filing assistance to ensure their trustworthiness and know-how. Look for established companies with experience in tax and payroll services, or think about connecting to relied on accounting firms or tax experts who provide ERC submitting assistance.
Bear in mind that while these business can provide important support, it’s always a good idea to have a fundamental understanding of the ERC requirements and process yourself. This will help you make informed choices and guarantee accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief procedures. The goal of the ERC is to encourage businesses to retain and pay their workers throughout the pandemic, even if their operations have actually been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to eligible employers, including for-profit organizations, tax-exempt companies, and particular governmental entities. To certify, companies need to satisfy one of two requirements:.
Business operations were completely or partially suspended due to a federal government order related to COVID-19.
The business experienced a substantial decline in gross receipts. As pointed out previously, for 2021, a substantial decline is specified as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decline in gross receipts compared to the instantly preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount is equal to a portion (as much as 70%) of certified salaries paid to workers, including certain 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, services that received an Income Protection Program (PPP) loan were not eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 allows organizations to declare the ERC even if they got a PPP loan. The exact same incomes can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and enhanced, enabling eligible employers to declare the credit for qualified wages paid as far back as March 13, 2020. This retroactive arrangement supplies a chance for companies to modify prior-year tax returns and receive refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their work tax returns, typically Form 941. If the credit exceeds the amount of employment taxes owed, the excess can be reimbursed to the employer.
It is essential to note that the ERC arrangements and eligibility requirements have actually developed over time. The best course of action is to seek advice from a tax expert or check out the official IRS website for the most comprehensive and up-to-date information concerning the ERC, consisting of any recent legislative modifications or updates.
To qualify for the ERC, an organization must satisfy one of the following requirements:.
The business operations were totally or partly suspended due to a government order related to COVID-19.
The business experienced a significant decrease in gross invoices. For 2021, a significant decrease is specified as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decline in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the right away preceding quarter.
The ERC is available to businesses of all sizes, consisting of tax-exempt organizations, however there are some exceptions. Federal government entities and organizations that received a PPP loan might have limitations on claiming the credit.
The procedure for claiming the ERC involves completing the required types and consisting of the credit on your employment income tax return (generally Type 941). The exact time it requires to process the credit can differ based upon several factors, including the complexity of your organization and the work of the internal revenue service. It’s suggested to speak with a tax professional for assistance specific to your situation.
There are several companies that can assist with the procedure of declaring the ERC. Some popular companies that offer help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the info supplied here is based on general understanding and may not reflect the most recent updates or modifications to the ERC. It is very important to talk to a tax professional or check out the official internal revenue service website for the most updated and precise information relating to eligibility, claiming treatments, and readily available help.
Less than 100. The credit is based if the employer had 100 or less employees on average in 2019.
on wages paid to all employees whether they actually worked or not. Simply put, even if the.
workers worked full-time and got paid for full-time work, the employer still gets the credit.
Greater than 100. If the company had more than 100 workers on average in 2019, then the credit is.
permitted only for earnings paid to workers who did not work during the calendar quarter.
In both cases, “incomes” consists of not just cash payments but also a part of the cost of employer.
supplied healthcare. How Do You Calculate The Employee Retention Credit
Employers can be instantly compensated for the credit by minimizing the quantity of payroll taxes they.