Lets talk first about How To File For 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 offer a beautiful breakfast and have people really learn about the program we must head to the room where we have the ability to display a few of the checks that we are getting for companies and I ‘d like to see that what is this this is uh hundreds of millions of dollars actually Kevin hundreds of countless dollars so these are replicate copies of the letters that go to customers verifying that the check is on the method I suggest you understand if you just start 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 mean it’s just I indicate consider the number of real customers 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 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 have the ability to track it you know when you
get this you understand the check is gone for sure which’s when they pay so they do not pay anything up until they really get the cash they do not pay bottom line Wonder trust anything until this letter is confirmed the check is on the method they deposit it into their savings account and they can genuinely rely on Wonder trust that the process has actually been completed and the number of you believe you have actually processed because you started this we’re about 35 000 of these for
about 6 billion dollars wow so plainly they understand 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 Wonderful here you’re at my YouTube channel we’re speaking about something really essential today the worker retention credit which most of you have actually never heard of I certainly hadn’t heard of it up until extremely just recently and found out a lot about it since this is probably the most affordable expense of capital for any small business anywhere
anytime if you have employees in between five and five hundred so I have actually got the expert with me this is Josh Fox he’s the founder and CEO of bottom line Principles 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 phone your bank supervisor and say give 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’ve become yes the Ambassador and paid spokesperson 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 developed the cares Act and the cares act offered companies three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everyone it makes a big distinction right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
remedy the money cash payroll tax refund alright go on sorry I just have to make certain we got that point I suggest that’s a huge distinction a loan versus cash cash I like money money that’s what we’re talking 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 beautiful tough check in the mail where you get real money from the IRS all right so let’s speak about how it works because it sounds like to me if it’s a if it’s employee retention credit that individual needed 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 staff members right you had to have actually owned a service but it’s based upon you having W-2 employees 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 six months of 2021 on the W-2 appropriate so there were six quarters the program was open well stroll us through the 6 quarters so you had quarters two 3 and 4 of 2020 and you had quarters one 2 and 3 of 2021. alright so that’s how it’s measured you need to be on the W-2 throughout that duration now let’s talk my favorite part cash how much can you return per employee that was on a W-2 in those six quarters so the estimation in 2020 to be precise Kevin is 50 of the employee’s salary to an optimum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the worker’s wage to an optimum of 7 thousand per quarter how did that occur um they simply changed 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 staff members on payroll 100 so if you can get 5 000 per person Max in twenty that was 50 in 2020 up to 5 thousand Max and then what occurs 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 6 thousand dollars per employee that is since that’s a great deal of money 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 2 you would decrease the 26 000 so what we’re seeing typically Kevin is if you took PPP cash someplace around 10 thousand dollars an individual so let’s say hypothetically you owned a dining establishment in New York City where I’m from and you had a hundred employees and you took PPP money you would still get a million dollar in the mail from the internal revenue service so it’s big undoubtedly now the big question is why does nobody know about this since appearance when I initially heard about this when I initially fulfilled Josh you know I have actually got great deals of investments in great deals of business I’m a major advocate for entrepreneurship in America and make many numerous investments in entrepreneurs of which numerous suffered through the pandemic when I first found out about this I called BS I do not believe it because I utilize the PPP we went through the cash 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 used them carefully to stay alive throughout the pandemic so when I found out about this I said nah it can’t be true however when I dug around I even contacted us to my politician good friends Guv Senators they didn’t learn about it I mean that’s how you know that’s how misinformation is that there’s no details out there then a bunch of people informed me well you can’t get it since you took the PPP also not real so let’s ask Josh why does nobody understand about the worker retention credit you know 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 process in Canada a pre-pp loan there’s no loans in Canada by the way it’s just process procedure that’s all um and here there was turmoil since keep in mind in the original cares act you could refrain from doing both programs so if you had actually done PPP you could refrain from doing ERC in the initial program and when they altered the law in 2021 the banks were not doing ERC due to the fact that it’s not alone so you’re getting a tax refund so the federal government never ever made it clear to any person about how to.
do this does your CFO understand how to do this not really he or she’s never ever done it in the past 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 prior to unless you have an account that entered into this service and bottom line my firm Kevin has actually been in business considering that 2009 and we have actually been dealing with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 companies so a lot of our huge big corporate customers have actually dealt with bottom line to recover other federal government programs we’ve done sales tax and use tax unemployment tax work chance tax credits research and development tax credits unclaimed home property tax all of these other federal government programs.
The worker retention tax credit is a broad based refundable tax credit designed to encourage.
companies to keep employees on their payroll. The credit is 50% of approximately $10,000 in earnings paid by an.
employer whose service is completely or partially suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
1. The credit is offered to all employers no matter size including tax exempt companies. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) little.
organizations who take Small Business Loans.
2. To qualify, the company needs to satisfy one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s service is totally or partly suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross invoices are listed below 50% of the equivalent quarter in 2019. Once the.
employer’s gross receipts go above 80% of a similar 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 certifying incomes paid up to $10,000 in overall.
It works for wages paid after March 13th and before December 31, 2020.
The definition of certifying wages varies by whether a company had, usually, more or less than.
100 employees in 2019.
Business that focus on ERC filing support typically supply competence and assistance to assist services browse the intricate process of claiming the credit. They can use various services, including:.
How is the employee retention credit calculated? How To File For The Employee Retention Credit
Eligibility Assessment: These companies will evaluate your business’s eligibility for the ERC based upon aspects such as your industry, profits, and operations. They can assist identify if you satisfy the requirements for the credit and determine the optimum credit quantity you can claim.
Documentation and Estimation: ERC filing services will help in gathering the required documentation, such as payroll records and monetary declarations, to support your claim. They will likewise assist determine the credit quantity based upon qualified earnings and other certifying costs.
Retroactive Claim Review: If you are eligible to declare the ERC for prior quarters, these business can review your previous payroll records and financials to determine prospective chances for retroactive credits. They can help you change previous income tax return to declare these refunds.
Filing Help: Business focusing on ERC filings will prepare and send the needed forms and documents in your place. This includes completing Form 941 or any other required tax return.
Compliance and Updates: ERC regulations and guidance have progressed in time. These companies remain updated with the most recent changes and ensure that your filings abide by the most existing guidelines. They can likewise supply ongoing assistance if the IRS requests extra info or carries out an audit related to your ERC claim.
It is essential to research and vet any business using ERC filing support to guarantee their trustworthiness and know-how. Look for recognized firms with experience in tax and payroll services, or consider reaching out to relied on accounting companies or tax professionals who offer ERC submitting assistance.
Bear in mind that while these business can offer important help, it’s constantly a great idea to have a basic understanding of the ERC requirements and process yourself. This will assist you make informed choices and ensure precise filings.
The Worker Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief procedures. The objective of the ERC is to motivate businesses to retain and pay their staff members throughout the pandemic, even if their operations have actually been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to eligible companies, including for-profit businesses, tax-exempt organizations, and particular governmental entities. To qualify, companies must meet one of two criteria:.
Business operations were totally or partially suspended due to a federal government order related to COVID-19.
The business experienced a significant decline in gross invoices. As discussed earlier, for 2021, a substantial decrease is specified as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit amount amounts to a portion (approximately 70%) of certified wages paid to employees, consisting of specific health plan costs. The maximum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, companies that received an Income Protection Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 allows services to claim the ERC even if they got a PPP loan. The exact same earnings can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and boosted, allowing eligible employers to declare the credit for certified salaries paid as far back as March 13, 2020. This retroactive arrangement supplies an opportunity for companies to amend prior-year income tax return and receive refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their employment income tax return, generally Form 941. If the credit exceeds the amount of employment taxes owed, the excess can be refunded to the company.
It’s important to keep in mind that the ERC provisions and eligibility requirements have actually developed gradually. The best course of action is to talk to a tax professional or go to the main IRS site for the most comprehensive and updated info relating to the ERC, consisting of any recent legal modifications or updates.
To qualify for the ERC, a service should meet one of the following requirements:.
Business operations were completely or partially suspended due to a government order related to COVID-19.
The business experienced a substantial decrease in gross invoices. For 2021, a substantial decline is defined as a 20% decline in gross invoices compared to the 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% decline in gross invoices compared to the right away preceding quarter.
The ERC is readily available to services of all sizes, including tax-exempt organizations, but there are some exceptions. Federal government entities and companies that received a PPP loan may have restrictions on declaring the credit.
The procedure for claiming the ERC involves completing the essential forms and including the credit on your work income tax return (usually Kind 941). The exact time it takes to process the credit can differ based upon numerous factors, consisting of the complexity of your business and the work of the internal revenue service. It’s suggested to seek advice from a tax professional for guidance specific to your situation.
There are several business that can aid with the process of claiming the ERC. These include accounting companies, tax advisory services, and payroll company. Some well-known business that offer assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research and contact these companies straight to inquire about their charges and services.
Please note that the details provided here is based on general knowledge and might not show the most recent updates or modifications to the ERC. It is essential to seek advice from a tax expert or visit the main internal revenue service site for the most precise and current information relating to eligibility, declaring treatments, and offered help.
Less than 100. If the employer had 100 or fewer staff members typically in 2019, then the credit is based.
on earnings paid to all workers whether they really worked or not. To put it simply, even if the.
staff members 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.
permitted only for earnings paid to employees who did not work throughout the calendar quarter.
In both cases, “earnings” consists of not just cash payments but also a portion of the expense of company.
provided healthcare. How To File For The Employee Retention Credit
Employers can be immediately compensated for the credit by minimizing the amount of payroll taxes they.