Lets talk first about How To Qualify Employee Retention Credit :
Our group here what do these men doing everybody in this space is assisting teach people about ERC and uh constantly offer a lovely breakfast and have individuals really find out about 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 companies and I ‘d like to see that what is this this is uh hundreds of millions of dollars actually Kevin numerous countless dollars so these are duplicate copies of the letters that go to clients confirming that the check is on the method I imply you understand if you simply 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 imply think of how many real customers 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 confirmed and the check is on the mail in the mail from the IRS heading to the consumer so that’s how you’re able 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 until they actually get the money they do not pay bottom line Wonder trust anything until this letter is validated the check is on the method they transfer it into their checking account and they can genuinely rely on Wonder trust that the process has been finished and how many you think you have actually processed considering that 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 and that’s what you require you require specialists 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 talking about something truly crucial today the worker retention credit which most of you have never ever heard of I definitely hadn’t become aware of it up until extremely just recently and found out a lot about it since this is probably the lowest cost of capital for any small business anywhere
anytime if you have workers between five and five hundred so I’ve got the professional with me this is Josh Fox he’s the founder and CEO of bottom line Ideas they’re the largest processor of these ERC credits this is a 170 page program so it’s challenging this isn’t like PPP we simply phone your bank supervisor and state give 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 spokesperson for this I like this program it’s disappearing soon you got to learn all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just start there so during the Trump Administration when President Trump was enacted they created the cares Act and the cares act provided 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 two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
fix the cash cash payroll tax refund alright go on sorry I simply have to ensure we got that point I imply that’s a big distinction a loan versus cash money I like money money that’s what we’re speaking 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 stunning difficult check in the mail where you get actual money from the internal revenue service all right so let’s talk about how it works because it seems like to me if it’s a if it’s staff member retention credit that person had to be an employee so I’m going to make the Assumption this money is not for the owner not for individuals on the cap table not for shareholders it’s for workers right you needed to have actually owned a company but it’s based on you having W-2 staff members in America not 10.99. so as long as you had W-2 staff members and you paid federal payroll taxes that’s why you would be qualified so you need to be on payroll in 2020 on the W-2 and you need to be on payroll for the very first 6 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 three and 4 of 2020 and you had quarters one two and three of 2021. okay so that’s how it’s measured you have to be on the W-2 throughout that period now let’s talk my preferred part money just how much can you get back 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 staff member’s wage to an optimum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers escalated to 70 of the employee’s income to a maximum of 7 thousand per quarter how did that occur um they simply changed the rules in.
2021 versus due to the fact that the mayhem 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 takes place 21 000 Max in 2021 oh that’s how you create twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty 6 thousand dollars per employee that is because that’s a great deal of money it is now there’s a caveat here the PPP cash would need to be lowered from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would reduce the 26 000 so what we’re seeing usually Kevin is if you took PPP cash someplace around ten thousand dollars an individual so let’s state hypothetically you owned a restaurant 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 IRS so it’s substantial clearly now the big concern is why does no one learn about this due to the fact that appearance when I initially heard about this when I first met Josh you understand I’ve got great deals of investments in lots of companies I’m a significant supporter for entrepreneurship in America and make many many financial investments in entrepreneurs of which many suffered through the pandemic when I initially heard about this I called BS I do not believe it since 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 which were well deserved and we used them wisely to survive throughout the pandemic so when I found out about this I stated nah it can’t be true but when I dug around I even called to my politician good friends Governor Senators they didn’t know about it I suggest that’s how you understand that’s how false information is that there’s no info out there then a lot of people told 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 intriguing you’re speaking about the banks Kevin since in the PPP loan procedure the federal government made it really clear that if you wanted a PPP loan you would call Wells Fargo Citibank Bank of America any of the huge 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 simply procedure process that’s all um and here there was mayhem because remember in the initial cares act you might not do both programs so if you had actually done PPP you could refrain from doing ERC in the original program and when they changed the law in 2021 the banks were refraining from 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 actually he or she’s never done it previously 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 business your accountant no your accountant’s never done this before unless you have an account that went into this company and bottom line my company Kevin has stayed in business because 2009 and we’ve been dealing with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 business so a great deal of our huge big corporate customers have dealt with bottom line to recover other government programs we’ve done sales tax and use tax joblessness tax work chance tax credits research and development tax credits unclaimed property property tax all of these other government programs.
The staff member 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 up to $10,000 in incomes paid by an.
company whose company is fully or partially suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is available to all employers despite size consisting of tax exempt organizations. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
services who take Small company Loans.
2. To qualify, the company has to satisfy one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s service is fully or partly suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are listed below 50% of the equivalent quarter in 2019. Once the.
employer’s gross invoices exceed 80% of a comparable quarter in 2019 they no longer qualify.
after the end of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the qualifying earnings paid up to $10,000 in overall.
It works for earnings paid after March 13th and before December 31, 2020.
The meaning of certifying wages varies by whether an employer had, on average, basically than.
100 staff members in 2019.
Companies that concentrate on ERC filing help normally offer competence and assistance to help companies navigate the intricate procedure of declaring the credit. They can offer numerous services, consisting of:.
How is the employee retention credit calculated? How To Qualify Employee Retention Credit
Eligibility Assessment: These companies will examine your company’s eligibility for the ERC based on aspects such as your market, revenue, and operations. They can help identify if you meet the requirements for the credit and recognize the optimum credit amount you can declare.
Documents and Calculation: ERC filing services will assist in gathering the necessary documentation, such as payroll records and monetary statements, to support your claim. They will also help compute the credit amount based upon eligible wages and other qualifying costs.
Retroactive Claim Review: If you are qualified to claim the ERC for prior quarters, these companies can evaluate your previous payroll records and financials to identify potential opportunities for retroactive credits. They can help you change previous tax returns to claim these refunds.
Filing Assistance: Business concentrating on ERC filings will prepare and send the required forms and documentation on your behalf. This consists of completing Type 941 or any other required tax return.
Compliance and Updates: ERC policies and guidance have evolved with time. These companies remain upgraded with the most recent changes and make sure that your filings abide by the most existing standards. They can likewise supply continuous assistance if the IRS requests extra information or conducts an audit related to your ERC claim.
It’s important to research and veterinarian any company providing ERC filing assistance to guarantee their reliability and proficiency. Try to find recognized firms with experience in tax and payroll services, or consider connecting to trusted accounting companies or tax experts who use ERC filing support.
Bear in mind that while these business can supply important help, it’s constantly an excellent idea to have a standard understanding of the ERC requirements and procedure yourself. This will help you make informed decisions and guarantee accurate filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief steps. The objective of the ERC is to encourage organizations to maintain and pay their staff members throughout the pandemic, even if their operations have been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to qualified employers, consisting of for-profit organizations, tax-exempt organizations, and specific governmental entities. To certify, employers should satisfy one of two criteria:.
The business operations were completely or partially suspended due to a government order related to COVID-19.
Business experienced a considerable decline in gross invoices. As pointed out previously, 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 specified as a 20% decline 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 Amount: 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 (up to 70%) of certified incomes paid to employees, consisting of particular health plan expenditures. 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, businesses that received a Paycheck Security Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 permits organizations to declare the ERC even if they received a PPP loan. The exact same incomes can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and enhanced, 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 companies to change prior-year income tax return and receive refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their employment tax returns, generally Kind 941. The excess can be refunded to the employer if the credit goes beyond the quantity of work taxes owed.
It’s important to keep in mind that the ERC provisions and eligibility criteria have actually developed gradually. The very best strategy is to consult with a tax professional or check out the main internal revenue service site for the most comprehensive and updated info relating to the ERC, consisting of any recent legal changes or updates.
To get approved for the ERC, a service should fulfill among the following requirements:.
The business operations were totally or partly suspended due to a government order related to COVID-19.
The business experienced a substantial decrease in gross invoices. For 2021, a considerable decrease is defined as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decline in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
The ERC is available to organizations of all sizes, consisting of tax-exempt organizations, but there are some exceptions. For example, government entities and services that got a PPP loan may have limitations on declaring the credit.
The procedure for declaring the ERC includes completing the necessary forms and consisting of the credit on your work tax return (normally Type 941). The exact time it takes to process the credit can vary based on numerous factors, including the complexity of your service and the work of the IRS. It’s advised to talk to a tax professional for assistance specific to your circumstance.
There are numerous companies that can aid with the process of declaring the ERC. These include accounting companies, tax advisory services, and payroll provider. Some widely known business that use support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research study and call these companies directly to ask about their fees and services.
Please keep in mind that the info supplied here is based upon general knowledge and might not show the most current updates or modifications to the ERC. It’s important to speak with a tax professional or visit the official IRS site for the most up-to-date and accurate information regarding eligibility, declaring treatments, and offered assistance.
Less than 100. The credit is based if the company had 100 or fewer staff members on average in 2019.
on incomes paid to all employees whether they in fact worked or not. To put it simply, even if the.
employees worked full time and earned money for full time work, the employer still gets the credit.
Greater than 100. If the company had more than 100 employees on average in 2019, then the credit is.
enabled only for wages paid to employees who did not work during the calendar quarter.
In both cases, “wages” consists of not simply money payments however also a part of the expense of employer.
provided healthcare. How To Qualify Employee Retention Credit
Employers can be right away reimbursed for the credit by minimizing the quantity of payroll taxes they.