Lets talk first about How Do You Claim Employee Retention Credit :
Our team here what do these people doing everybody in this space is helping teach people about ERC and uh always supply a lovely breakfast and have individuals really discover the program we ought to head to the space where we are able to display some of the checks that we are getting for business and I want to see that what is this this is uh numerous millions of dollars literally Kevin hundreds of countless dollars so these are duplicate copies of the letters that go to clients confirming that the check is on the way I suggest you understand if you just begin to look at a few of these here I mean this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s just I mean think of the number of real clients that went through the program yeah this is the very end this is the party at the end when the check is confirmed the numbers are confirmed 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
get this you know the check is opted for sure and that’s when they pay so they do not pay anything up until they really get the money they do not pay bottom line Wonder trust anything till this letter is validated the check is on the way they transfer it into their bank account and they can truly rely on Wonder trust that the procedure has actually been ended up and how many you think you’ve processed because you began this we have to do with 35 000 of these for
about six billion dollars wow so plainly they understand what they’re doing which’s what you require you require experts 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 actually essential today the staff member retention credit which the majority of you have actually never become aware of I definitely had not heard of it until very recently and discovered a lot about it since this is probably the lowest cost of capital for any small business anywhere
anytime if you have employees 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 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 call up your bank manager and say give me a loan it doesn’t 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’ve become yes the Ambassador and paid representative for this I like this program it’s going away soon you got to find out everything about it let’s talk employee retention credit Josh Fox what is an ERC let’s just begin there so during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act offered organizations three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everybody it makes a huge distinction right there 2 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 all right go on sorry I simply have to make sure we got that point I suggest that’s a big difference a loan versus money cash I like cash money that’s what we’re talking about 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 actual money from the internal revenue service all right so let’s discuss how it works because it seems like to me if it’s a if it’s worker retention credit that individual needed to be a staff member so I’m going to make the Assumption this cash is not for the owner not for people on the cap table not for shareholders it’s for staff members right you had to have owned a service however it’s based on you having W-2 workers in America not 10.99. As long as you had W-2 staff members and you paid federal payroll taxes that’s why you would be qualified 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 correct so there were 6 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. all right so that’s how it’s measured you need to be on the W-2 during that duration now let’s talk my preferred part money how much can you return per worker that was on a W-2 in those 6 quarters so the estimation in 2020 to be exact Kevin is 50 of the staff member’s income to an optimum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers increased to 70 of the staff member’s salary to an optimum of 7 thousand per quarter how did that occur 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 then what happens 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 six thousand dollars per employee that is since that’s a great deal of cash it is now there’s a caveat here the PPP money would have to be decreased from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would decrease 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 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 substantial undoubtedly now the huge question is why does nobody understand about this due to the fact that look when I initially heard about this when I first met Josh you understand I have actually got lots of investments in lots of business I’m a significant supporter for entrepreneurship in America and make many lots of financial investments in business owners of which many 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 really easy to do we had our CEOs call the banks they got their loans and that were well been worthy of and we utilized them wisely to survive throughout the pandemic so when I found out about this I said nah it can’t hold true but when I dug around I even called to my politician good friends Governor Senators they didn’t learn about it I mean that’s how you know that’s how misinformation is that there’s no info out there then a lot of people told me well you can’t get it because you took the PPP also not true so let’s ask Josh why does no one know about the staff member retention credit you know what’s fascinating you’re discussing the banks Kevin because 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 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 process that’s all um and here there was mayhem since keep in mind in the initial cares act you might refrain from doing both programs so if you had done PPP you might not do ERC in the initial program and when they altered 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 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 done it before 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 business your accounting professional no your accountant’s never done this before unless you have an account that entered into this service and bottom line my company Kevin has been in business considering that 2009 and we have actually 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 huge huge business customers have actually dealt 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 property tax all of these other government programs.
The worker retention tax credit is a broad based refundable tax credit designed to motivate.
employers to keep staff members on their payroll. The credit is 50% of as much as $10,000 in incomes paid by an.
Due to the fact that of COVID-19 or whose gross receipts, company whose business is fully or partly suspended.
decrease by more than 50%.
1. The credit is readily available to all employers regardless of size consisting of tax exempt companies. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
companies who take Small company Loans.
2. To qualify, the employer needs to satisfy one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s company is completely or partially suspended by 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.
company’s gross invoices exceed 80% of a similar quarter in 2019 they no longer qualify.
after the end of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the qualifying earnings paid up to $10,000 in total.
It works for incomes paid after March 13th and before December 31, 2020.
The definition of qualifying incomes varies by whether a company had, usually, more or less than.
100 staff members in 2019.
Business that concentrate on ERC filing help typically provide knowledge and support to help companies browse the intricate procedure of declaring the credit. They can use various services, consisting of:.
How is the employee retention credit calculated? How Do You Claim Employee Retention Credit
Eligibility Assessment: These business will assess your organization’s eligibility for the ERC based on factors such as your industry, revenue, and operations. They can help identify if you meet the requirements for the credit and determine the maximum credit amount you can claim.
Documents and Computation: ERC filing services will assist in collecting the required documents, such as payroll records and financial declarations, to support your claim. They will also assist compute the credit quantity based upon eligible salaries and other qualifying expenditures.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for prior quarters, these business can review your previous payroll records and financials to determine potential chances for retroactive credits. They can help you change previous tax returns to declare these refunds.
Filing Help: Companies specializing in ERC filings will prepare and submit the required types and documents on your behalf. This includes finishing Form 941 or any other required tax return.
Compliance and Updates: ERC regulations and assistance have developed in time. These companies stay updated with the latest changes and guarantee that your filings adhere to the most present standards. If the Internal revenue service demands additional info or carries out an audit related to your ERC claim, they can also provide ongoing support.
It’s important to research study and vet any business providing ERC filing support to guarantee their trustworthiness and knowledge. Try to find recognized companies with experience in tax and payroll services, or think about reaching out to trusted accounting companies or tax professionals who offer ERC filing support.
Remember that while these business can provide important help, it’s always a good concept to have a fundamental understanding of the ERC requirements and procedure yourself. This will help you make notified choices and guarantee precise filings.
The Worker Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief steps. The goal of the ERC is to motivate companies to maintain 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 offered to eligible employers, consisting of for-profit companies, tax-exempt companies, and particular governmental entities. To certify, employers must fulfill one of two criteria:.
Business operations were totally or partly suspended due to a government order related to COVID-19.
Business experienced a significant decline in gross invoices. As discussed earlier, for 2021, a significant decline is specified as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a substantial decline is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decline in gross invoices compared to the instantly preceding quarter.
Credit Quantity: 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 certified incomes paid to employees, including particular health insurance expenditures. 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, businesses that got a Paycheck Defense Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 enables businesses to claim the ERC even if they got a PPP loan. However, the exact same wages can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and improved, enabling qualified employers to declare the credit for certified incomes paid as far back as March 13, 2020. This retroactive arrangement provides a chance for companies to amend prior-year tax returns and receive refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their work income tax return, normally Form 941. If the credit exceeds the quantity of work taxes owed, the excess can be refunded to the employer.
It’s important to keep in mind that the ERC provisions and eligibility criteria have actually developed with time. The best course of action is to consult with a tax expert or go to the main IRS site for the most comprehensive and up-to-date information concerning the ERC, consisting of any recent legislative changes or updates.
To qualify for the ERC, an organization should fulfill one of the following criteria:.
Business operations were fully or partly suspended due to a government order related to COVID-19.
Business experienced a considerable decrease in gross receipts. For 2021, a substantial decline is specified as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a considerable decline is specified 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 immediately preceding quarter.
The ERC is readily available to companies of all sizes, including tax-exempt organizations, but there are some exceptions. For example, government entities and businesses that received a PPP loan might have restrictions on declaring the credit.
The procedure for claiming the ERC involves completing the necessary types and including the credit on your employment tax return (typically Type 941). The exact time it requires to process the credit can vary based upon several elements, including the intricacy of your organization and the work of the IRS. It’s advised to seek advice from a tax expert for assistance specific to your situation.
There are several business that can aid with the process of declaring the ERC. These include accounting companies, tax advisory services, and payroll provider. Some well-known companies that provide help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research and get in touch with these companies straight to ask about their services and fees.
Please keep in mind that the details provided here is based upon general knowledge and might not reflect the most current updates or modifications to the ERC. It is very important to talk to a tax expert or check out the main IRS website for the most precise and updated details concerning eligibility, claiming treatments, and readily available assistance.
Less than 100. If the company had 100 or fewer employees on average in 2019, then the credit is based.
on salaries paid to all staff members whether they in fact worked or not. To put it simply, even if the.
workers worked full time and made money for full-time work, the company still gets the credit.
Greater than 100. The credit is if the company had more than 100 employees on average in 2019.
allowed just for wages paid to workers who did not work during the calendar quarter.
In both cases, “salaries” includes not just cash payments but likewise a portion of the cost of employer.
provided healthcare. How Do You Claim Employee Retention Credit
Employers can be right away repaid for the credit by minimizing the quantity of payroll taxes they.