Lets talk first about How To File Employee Retention Credit :
Our group here what do these people doing everybody in this space is helping teach individuals about ERC and uh constantly offer a gorgeous breakfast and have individuals truly discover the program we should head to the space where we are able to display some of the checks that we are getting for business and I wish to see that what is this this is uh hundreds of countless dollars actually Kevin numerous 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 just begin to take a 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 imply it’s simply I indicate think about how many real clients that went through the program yeah this is the very end this is the celebration at the end when the check is confirmed the numbers are validated and the check is on the mail in the mail from the internal revenue service heading to the consumer so that’s how you’re able to track it you know when you
receive this you know the check is chosen sure and that’s when they pay so they don’t pay anything up until they actually receive the cash they do not pay bottom line Wonder trust anything up until this letter is verified the check is on the way they transfer it into their checking account and they can really rely on Wonder trust that the process has been completed and the number of you think you’ve processed given that you started this we’re about 35 000 of these for
about six billion dollars wow so plainly they understand what they’re doing and that’s what you need you need 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 discussing something really important today the employee retention credit which most of you have never ever heard of I definitely hadn’t become aware of it until really 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 5 and five hundred so I have actually got the specialist with me this is Josh Fox he’s the creator and CEO of bottom line Concepts they’re the biggest 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 say 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 have actually ended up being yes the Ambassador and paid representative for this I love this program it’s disappearing very soon you got to learn everything 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 developed the cares Act and the cares act provided organizations 3 opportunities 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 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the cash cash payroll tax refund alright go on sorry I just need to ensure we got that point I suggest that’s a big distinction a loan versus money money I like cash cash 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 tough check in the mail where you get actual money from the internal revenue service all right so let’s speak about how it works because it seems like to me if it’s a if it’s worker retention credit that individual had to be a worker so I’m going to make the Assumption this money is not for the owner not for people on the cap table not for shareholders it’s for workers right you needed to have actually owned a business however it’s based on 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 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 six months of 2021 on the W-2 correct so there were 6 quarters the program was open well stroll us through the 6 quarters so you had quarters two three and four of 2020 and you had quarters one 2 and 3 of 2021. all right so that’s how it’s determined you have to be on the W-2 during that period now let’s talk my preferred part money just how much can you return per employee that was on a W-2 in those 6 quarters so the estimation in 2020 to be specific 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 worker’s salary to a maximum of seven thousand per quarter how did that take place um they just changed the rules in.
2021 versus due to the fact that the mayhem 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 as much as five thousand Max and then what happens 21 000 Max in 2021 oh that’s how you create twenty 6 thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per staff member that is since that’s a lot of cash it is now there’s a caveat here the PPP money would need to be lowered from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would minimize the 26 000 so what we’re seeing on average Kevin is if you took PPP money someplace around 10 thousand dollars an individual so let’s say hypothetically you owned a restaurant 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 internal revenue service so it’s huge clearly now the huge question is why does no one know about this due to the fact that look when I initially found out about this when I first fulfilled Josh you understand I have actually got great deals of financial investments in lots of companies I’m a significant supporter for entrepreneurship in America and make many lots of financial investments in entrepreneurs of which many suffered through the pandemic when I first became aware of this I called BS I don’t believe it since I use 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 carefully to survive throughout the pandemic so when I became aware of this I said nah it can’t hold true but when I dug around I even called to my politician pals Guv 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 likewise not real so let’s ask Josh why does nobody understand about the worker retention credit you know what’s intriguing you’re speaking 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 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 simply 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 could not do 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 anyone about how to.
do this does your CFO understand how to do this not really he or she’s never ever done it before do the banks do it nope the banks don’t do it the payroll business yeah some of them are doing it as a payroll business your accountant no your accountant’s never done this before unless you have an account that went into this organization and bottom line my firm Kevin has stayed in business because 2009 and we have actually been working with the federal government and the state federal government to recuperate cash for Fortune 500 Fortune 1000 companies so a great deal of our huge big business customers have actually dealt with bottom line to recover other federal government programs we have actually done sales tax and use tax joblessness tax work opportunity tax credits research and development tax credits unclaimed home property tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit developed to encourage.
companies to keep staff members on their payroll. The credit is 50% of approximately $10,000 in salaries paid by an.
employer whose service is totally or partially suspended because of COVID-19 or whose gross invoices.
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.
just 2 exceptions: (1) state and city governments and their instrumentalities and (2) little.
companies who take Small company Loans.
2. To certify, the company has to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s business is fully or partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the equivalent quarter in 2019. Once the.
company’s gross receipts go above 80% of a comparable quarter in 2019 they no longer certify.
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 overall.
It is effective for salaries paid after March 13th and prior to December 31, 2020.
The definition of qualifying earnings varies by whether an employer had, on average, more or less than.
100 employees in 2019.
Business that focus on ERC filing assistance typically offer competence and assistance to help businesses navigate the intricate process of declaring the credit. They can use different services, including:.
How is the employee retention credit calculated? How To File Employee Retention Credit
Eligibility Evaluation: These business will examine your business’s eligibility for the ERC based upon aspects such as your industry, profits, and operations. They can help identify if you fulfill the requirements for the credit and identify the maximum credit amount you can declare.
Paperwork 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 amount based upon qualified wages and other qualifying expenses.
Retroactive Claim Evaluation: If you are eligible to claim the ERC for previous quarters, these business can review your previous payroll records and financials to recognize prospective chances for retroactive credits. They can help you change prior tax returns to declare these refunds.
Filing Support: Business focusing on ERC filings will prepare and send the needed kinds and paperwork on your behalf. This consists of finishing Type 941 or any other required tax return.
Compliance and Updates: ERC policies and guidance have evolved gradually. These business remain upgraded with the latest modifications and guarantee that your filings abide by the most present standards. If the Internal revenue service requests additional details or conducts an audit related to your ERC claim, they can also provide continuous assistance.
It’s important to research and veterinarian any business offering ERC filing help to ensure their trustworthiness and proficiency. Search for established companies with experience in tax and payroll services, or think about reaching out to trusted accounting firms or tax professionals who provide ERC submitting assistance.
Keep in mind that while these companies can provide important help, it’s constantly an excellent idea to have a fundamental understanding of the ERC requirements and process yourself. This will help you make informed 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 measures. The objective of the ERC is to motivate services to retain and pay their workers throughout the pandemic, even if their operations have actually been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to eligible employers, consisting of for-profit organizations, tax-exempt organizations, 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.
Business experienced a significant decrease in gross invoices. As mentioned earlier, for 2021, a substantial decrease is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a substantial decrease is specified as a 20% decline in gross invoices compared to the 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 company’s share of Social Security taxes. The credit quantity amounts to a percentage (as much as 70%) of certified wages paid to staff members, including certain health plan expenses. The maximum credit per staff member is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, businesses that got an Income Security Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 permits companies to declare the ERC even if they got a PPP loan. Nevertheless, the very same earnings can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively expanded and boosted, permitting eligible employers to claim the credit for qualified salaries paid as far back as March 13, 2020. This retroactive arrangement supplies a chance for businesses to amend prior-year income tax return and receive refunds.
Claiming the Credit: Companies can declare the ERC by reporting it on their employment tax returns, typically Kind 941. The excess can be refunded to the employer if the credit exceeds the quantity of employment taxes owed.
It is essential to keep in mind that the ERC arrangements and eligibility criteria have progressed gradually. The very best strategy is to talk to a tax professional or visit the official IRS website for the most up-to-date and detailed details concerning the ERC, consisting of any current legal changes or updates.
To qualify for the ERC, a business needs to fulfill among the following criteria:.
Business operations were totally or partly suspended due to a government order related to COVID-19.
Business experienced a substantial decrease in gross invoices. For 2021, a considerable decrease is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decrease in gross receipts compared to the immediately preceding quarter.
The ERC is available to organizations of all sizes, consisting of tax-exempt companies, however there are some exceptions. Federal government entities and organizations that received a PPP loan might have restrictions 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 (usually Kind 941). The exact time it requires to process the credit can differ based upon a number of elements, consisting of the complexity of your company and the work of the IRS. It’s suggested to consult with a tax professional for guidance particular to your scenario.
There are several companies that can assist with the procedure of declaring the ERC. Some well-known companies that provide assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the information supplied here is based upon general knowledge and may not reflect the most recent updates or modifications to the ERC. It’s important to consult with a tax professional or check out the main internal revenue service website for the most current and precise details concerning eligibility, declaring procedures, and offered assistance.
Less than 100. If the employer had 100 or less workers on average in 2019, then the credit is based.
on earnings paid to all employees whether they actually worked or not. In other words, even if the.
employees worked full time and earned money for full time work, the company still gets the credit.
Greater than 100. If the employer had more than 100 staff members on average in 2019, then the credit is.
allowed only for wages paid to workers who did not work throughout the calendar quarter.
In both cases, “incomes” includes not simply cash payments but also a part of the expense of employer.
offered health care. How To File Employee Retention Credit
Payment.
Employers can be right away reimbursed for the credit by lowering the quantity of payroll taxes they.