Lets talk first about How To Claim The Employee Retention Credit :
Our group here what do these people doing everyone in this room is helping teach people about ERC and uh constantly provide a lovely breakfast and have people truly learn more about the program we ought to head to the room where we are able to show some of the checks that we are getting for business and I ‘d like to see that what is this this is uh numerous millions of dollars literally Kevin hundreds of millions of dollars so these are duplicate copies of the letters that go to clients verifying that the check is on the way I suggest you understand if you simply begin to look at some of these here I suggest this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s simply 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 validated the numbers are confirmed 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
receive 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 money they do not pay bottom line Wonder trust anything up until this letter is verified the check is on the way they deposit it into their savings account and they can genuinely rely on Wonder trust that the procedure has actually been completed and how many you think you have actually processed because you began this we have to do with 35 000 of these for
about six billion dollars wow so clearly they know what they’re doing and that’s what you require you require experts on the other end of the phone to process this and get it to where you get one of these that’s what matters all right Mr Fantastic here you’re at my YouTube channel we’re speaking about something truly essential today the staff member retention credit which most of you have never become aware of I definitely had not become aware of it until really just recently and discovered a lot about it since this is probably the most affordable expense of capital for any small company anywhere
anytime if you have workers between 5 and five hundred so I’ve got the specialist with me this is Josh Fox he’s the founder and CEO of bottom line Ideas they’re the biggest processor of these ERC credits this is a 170 page program so it’s hard this isn’t like PPP we just contact 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 tell 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 like this program it’s going away very soon you got to learn all about it let’s talk worker retention credit Josh Fox what is an ERC let’s just begin there so during the Trump Administration when President Trump was enacted they created the cares Act and the cares act provided companies three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody it makes a big difference right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
remedy the cash money payroll tax refund okay go on sorry I just have to ensure we got that point I mean that’s a big difference a loan versus money 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 beautiful hard check in the mail where you get real money from the internal revenue service all right so let’s talk about how it works due to the fact that 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 Assumption this money is not for the owner not for people on the cap table not for investors it’s for staff members right you needed to have owned an organization however it’s based upon you having W-2 staff members 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 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 six months of 2021 on the W-2 right so there were 6 quarters the program was open well stroll us through the 6 quarters so you had quarters 2 three and 4 of 2020 and you had quarters one two and 3 of 2021. okay 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 money just how much can you return per staff member that was on a W-2 in those 6 quarters so the calculation in 2020 to be specific Kevin is 50 of the worker’s salary to a maximum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers escalated to 70 of the staff member’s income to an optimum of seven thousand per quarter how did that occur um they just changed the rules in.
2021 versus because the mayhem of the pandemic so they wished to even get more to keep those staff members 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 after that 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 employee that is because that’s a great deal of money it is now there’s a caution here the PPP money would need to be decreased from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would reduce the 26 000 so what we’re seeing on average Kevin is if you took PPP cash somewhere around ten thousand dollars an individual so let’s state hypothetically you owned a restaurant 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 huge clearly now the huge concern is why does no one understand about this due to the fact that appearance when I initially heard about this when I first fulfilled Josh you understand I have actually got lots of financial investments in lots of companies I’m a significant advocate for entrepreneurship in America and make many many 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 because I utilize 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 been worthy of and we utilized them sensibly to stay alive during the pandemic so when I heard about this I stated nah it can’t hold true but when I dug around I even called to my political leader good friends Guv Senators they didn’t know about it I mean that’s how you know that’s how misinformation is that there’s no details out there then a lot of people told me well you can’t get it due to the fact that you took the PPP also not true so let’s ask Josh why does no one understand about the worker retention credit you know what’s fascinating you’re speaking about the banks Kevin due to the fact that 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 big banks in our country and they would process process 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 due to the fact that remember in the original cares act you could refrain from doing both programs so if you had actually done PPP you might not do ERC in the initial program and when they changed the law in 2021 the banks were refraining from doing ERC since 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 truly she or he’s never done it before do the banks do it nope the banks don’t do it the payroll business yeah a few of them are doing it as a payroll business your accountant no your accountant’s never done this prior to unless you have an account that went into this company and bottom line my firm Kevin has been 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 big huge corporate clients have worked with bottom line to recover other federal government programs we’ve done sales tax and use tax joblessness tax work opportunity tax credits research and development tax credits unclaimed property property tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit designed to encourage.
companies to keep workers on their payroll. The credit is 50% of approximately $10,000 in earnings paid by an.
Due to the fact that of COVID-19 or whose gross invoices, employer whose service is totally or partly suspended.
decrease by more than 50%.
Availability.
1. The credit is readily available to all companies regardless of size consisting of tax exempt companies. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) small.
businesses who take Small company Loans.
2. To qualify, the employer has to satisfy one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s organization is completely or partially suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross receipts are below 50% of the comparable quarter in 2019. As soon as the.
employer’s gross invoices go above 80% of a comparable quarter in 2019 they no longer certify.
after completion of that quarter.
Computation of the Credit.
The quantity of the credit is 50% of the certifying wages paid up to $10,000 in total.
It is effective for earnings paid after March 13th and prior to December 31, 2020.
The definition of certifying wages varies by whether an employer had, on average, more or less than.
100 employees in 2019.
Companies that specialize in ERC filing help usually offer competence and support to assist companies browse the complex process of claiming the credit. They can provide different services, including:.
How is the employee retention credit calculated? How To Claim The Employee Retention Credit
Eligibility Assessment: These business will examine your company’s eligibility for the ERC based on aspects such as your industry, revenue, and operations. They can assist identify if you satisfy the requirements for the credit and recognize the optimum credit quantity you can claim.
Paperwork and Estimation: ERC filing services will assist in gathering the necessary documentation, such as payroll records and financial statements, to support your claim. They will also assist determine the credit amount based upon eligible salaries and other qualifying expenditures.
Retroactive Claim Review: If you are qualified to claim the ERC for previous quarters, these business can evaluate your previous payroll records and financials to identify potential opportunities for retroactive credits. They can assist you change prior tax returns to claim these refunds.
Filing Assistance: Companies specializing in ERC filings will prepare and send the needed types and paperwork in your place. This includes finishing Type 941 or any other required tax return.
Compliance and Updates: ERC policies and guidance have developed over time. These business remain updated with the current modifications and make sure that your filings comply with the most existing standards. They can also provide continuous support if the IRS demands additional info or conducts an audit related to your ERC claim.
It is essential to research study and veterinarian any company offering ERC filing support to guarantee their reliability and competence. Try to find recognized companies with experience in tax and payroll services, or consider connecting to trusted accounting firms or tax professionals who provide ERC filing assistance.
Remember that while these companies can provide important help, it’s constantly an excellent concept to have a basic understanding of the ERC requirements and process yourself. This will help you make notified decisions and guarantee precise filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief measures. The goal of the ERC is to motivate organizations to maintain 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 offered to qualified companies, including for-profit services, tax-exempt companies, and particular governmental entities. To qualify, companies should fulfill one of two criteria:.
The business operations were fully or partially suspended due to a government order related to COVID-19.
Business experienced a considerable decrease in gross receipts. As pointed out previously, 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 significant decline is specified as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decline in gross invoices compared to the right away preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit quantity is equal to a portion (as much as 70%) of qualified wages paid to workers, including specific health plan costs. The maximum 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 got an Income Defense Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 permits organizations to declare the ERC even if they got a PPP loan. Nevertheless, the very same earnings can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and improved, allowing qualified employers to claim the credit for qualified salaries paid as far back as March 13, 2020. This retroactive provision supplies a chance for companies to amend prior-year tax returns and receive refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their employment income tax return, normally Form 941. If the credit goes beyond the quantity of employment taxes owed, the excess can be refunded to the company.
It is very important to keep in mind that the ERC arrangements and eligibility criteria have actually evolved gradually. The very best course of action is to seek advice from a tax expert or go to the official internal revenue service site for the most updated and in-depth information regarding the ERC, consisting of any current legal changes or updates.
To qualify for the ERC, a business should satisfy one of the following criteria:.
Business operations were totally or partially suspended due to a government order related to COVID-19.
The business experienced a substantial decrease in gross invoices. For 2021, a significant decline is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decline in gross receipts compared to the exact same quarter in 2019, or a 20% decline in gross invoices compared to the instantly preceding quarter.
The ERC is readily available to companies of all sizes, including tax-exempt organizations, however there are some exceptions. Federal government entities and companies that got a PPP loan might have restrictions on declaring the credit.
The procedure for declaring the ERC includes completing the needed forms and consisting of the credit on your employment tax return (typically Kind 941). The exact time it takes to process the credit can differ based on numerous factors, including the complexity of your company and the workload of the IRS. It’s advised to seek advice from a tax expert for guidance particular to your situation.
There are several business that can assist with the process of claiming the ERC. Some popular business that provide assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the information provided here is based upon general understanding and may not show the most current updates or modifications to the ERC. It is very important to talk to a tax expert or go to the official internal revenue service site for the most current and accurate info relating to eligibility, claiming procedures, and offered support.
Less than 100. The credit is based if the employer had 100 or less staff members on average in 2019.
on salaries paid to all staff members whether they really worked or not. Simply put, 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 staff members typically in 2019, then the credit is.
enabled just for salaries paid to staff members who did not work throughout the calendar quarter.
In both cases, “earnings” consists of not simply money payments however likewise a portion of the cost of company.
provided healthcare. How To Claim The Employee Retention Credit
Payment.
Companies can be instantly compensated for the credit by reducing the amount of payroll taxes they.