Lets talk first about How To Report Employee Retention Credit :
Our team here what do these guys doing everybody in this room is assisting teach people about ERC and uh constantly provide a stunning breakfast and have individuals truly learn about the program we need to head to the room where we have the ability to show a few 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 hundreds of millions of dollars so these are duplicate copies of the letters that go to customers verifying that the check is on the method I suggest you understand if you just begin to take a 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 mean it’s simply I suggest consider the number of actual 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 verified and the check is on the mail in the mail from the IRS heading to the client so that’s how you’re able to track it you understand when you
receive this you understand the check is opted for sure and that’s when they pay so they do not pay anything till they actually get the cash they do not pay bottom line Wonder trust anything until this letter is confirmed the check is on the way they deposit it into their bank account and they can really rely on Wonder trust that the process has been finished and how many you think you have actually processed because you started this we’re about 35 000 of these for
about six billion dollars wow so clearly they understand what they’re doing and that’s what you need you need 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 discussing something truly important today the worker retention credit which most of you have actually never heard of I certainly had not heard of it till very just recently and found out a lot about it because this is most likely the lowest cost of capital for any small company anywhere
anytime if you have employees between five and five hundred so I’ve got the professional with me this is Josh Fox he’s the creator and CEO of bottom line Ideas they’re the largest processor of these ERC credits this is a 170 page program so it’s difficult this isn’t like PPP we simply contact your bank manager and state give me a loan it does not work there’s not a loan it’s an application and Josh is going to tell all of us about it and how to get it and why I have actually become yes the Ambassador and paid spokesperson for this I like this program it’s going away soon you got to discover all about it let’s talk staff member 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 provided organizations 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone 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 money cash payroll tax refund okay go on sorry I simply need to ensure we got that point I imply that’s a big difference a loan versus money money I like money cash that’s what we’re speaking 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 difficult check in the mail where you get real 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 employee retention credit that person had to be a staff member so I’m going to make the Assumption this cash is not for the owner not for individuals on the cap table not for shareholders it’s for workers right you had to have owned a company but it’s based upon you having W-2 workers in America not 10.99. so as long as you had W-2 workers 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 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 walk us through the six quarters so you had quarters 2 three and four 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 throughout that duration now let’s talk my preferred part money just how much can you get back per staff member that was on a W-2 in those six quarters so the computation in 2020 to be specific Kevin is 50 of the employee’s wage to an optimum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s wage to a maximum of 7 thousand per quarter how did that occur um they simply altered the rules in.
2021 versus because the turmoil 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 approximately 5 thousand Max and after that what happens 21 000 Max in 2021 oh that’s how you develop twenty 6 thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty 6 thousand dollars per worker that is since that’s a great deal of cash it is now there’s a caveat here the PPP cash would have to be decreased from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would reduce 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 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 internal revenue service so it’s huge undoubtedly now the huge question is why does no one understand about this due to the fact that look when I first heard about this when I first satisfied Josh you understand I have actually got lots of investments in great deals of business I’m a significant supporter for entrepreneurship in America and make lots of numerous financial investments in business owners of which numerous suffered through the pandemic when I initially heard about this I called BS I don’t think it since I use the PPP we went through the cash center Banks to get it it was very easy to do we had our CEOs call the banks they got their loans and that were well deserved and we utilized them carefully to stay alive during the pandemic so when I heard about this I said nah it can’t hold true however when I dug around I even contacted us to my political leader friends Guv Senators they didn’t learn about it I mean 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 due to the fact that you took the PPP also not true so let’s ask Josh why does no one know about the worker retention credit you know what’s intriguing you’re speaking about the banks Kevin because in the PPP loan procedure the federal government made it really clear that if you desired a PPP loan you would call Wells Fargo Citibank Bank of America any of the huge banks in our country and they would process procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply process procedure that’s all um and here there was turmoil because remember in the original cares act you could refrain from doing both programs so if you had done PPP you could refrain from doing ERC in the initial program and when they altered 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 government never ever made it clear to anybody about how to.
do this does your CFO know how to do this not really she or he’s never 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 company your accounting professional no your accounting professional’s never ever done this before unless you have an account that entered into this company and bottom line my firm Kevin has been in business given that 2009 and we’ve been dealing with the federal government and the state federal government to recover cash for Fortune 500 Fortune 1000 business so a great deal of our big big corporate clients have actually dealt with bottom line to recuperate other government programs we have actually done sales tax and use tax unemployment tax work opportunity tax credits research and development tax credits unclaimed property real estate tax all of these other federal government programs.
The staff member retention tax credit is a broad based refundable tax credit designed to motivate.
companies to keep staff members on their payroll. The credit is 50% of approximately $10,000 in earnings paid by an.
Since of COVID-19 or whose gross receipts, company whose business is totally or partly suspended.
decrease by more than 50%.
1. The credit is available to all companies despite size consisting of tax exempt companies. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) little.
services who take Small company Loans.
2. To certify, the company has to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s business is fully or partly suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the similar quarter in 2019. As soon as the.
employer’s gross receipts exceed 80% of a comparable quarter in 2019 they no longer certify.
after the end of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the qualifying earnings paid up to $10,000 in total.
It works for salaries paid after March 13th and before December 31, 2020.
The meaning of certifying wages differs by whether a company had, on average, more or less than.
100 staff members in 2019.
Business that concentrate on ERC filing help usually provide competence and assistance to help services navigate the complex procedure of declaring the credit. They can use numerous services, consisting of:.
How is the employee retention credit calculated? How To Report Employee Retention Credit
Eligibility Evaluation: These companies will assess your service’s eligibility for the ERC based upon elements such as your market, income, and operations. If you meet the requirements for the credit and identify the optimum credit amount you can claim, they can assist figure out.
Paperwork and Computation: ERC filing services will assist in gathering the required paperwork, such as payroll records and financial declarations, to support your claim. They will also help calculate the credit quantity based upon eligible wages and other certifying expenditures.
Retroactive Claim Review: If you are qualified to declare the ERC for previous quarters, these business can review your past payroll records and financials to recognize possible opportunities for retroactive credits. They can help you modify previous tax returns to declare these refunds.
Filing Help: Companies focusing on ERC filings will prepare and send the essential types and paperwork in your place. This consists of finishing Form 941 or any other necessary tax return.
Compliance and Updates: ERC guidelines and guidance have actually progressed with time. These companies remain upgraded with the current changes and guarantee that your filings comply with the most current standards. If the Internal revenue service demands extra information or conducts an audit associated to your ERC claim, they can also provide continuous support.
It is essential to research and veterinarian any company providing ERC filing assistance to guarantee their reliability and expertise. Search for established firms with experience in tax and payroll services, or consider reaching out to trusted accounting companies or tax experts who use ERC submitting assistance.
Bear in mind that while these companies can supply valuable help, it’s always a good idea to have a fundamental understanding of the ERC requirements and procedure yourself. This will assist you make notified choices and make sure precise filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief procedures. The goal of the ERC is to encourage businesses to retain and pay their staff members 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 companies, consisting of for-profit companies, tax-exempt organizations, and specific governmental entities. To certify, companies must fulfill one of two requirements:.
The business operations were fully or partially suspended due to a federal government order related to COVID-19.
The business experienced a significant decrease in gross receipts. As mentioned previously, for 2021, a substantial decline 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 specified as a 20% decline in gross receipts compared to the very same quarter in 2019, or a 20% decline in gross receipts compared to the instantly 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 (up to 70%) of certified incomes paid to workers, consisting of particular health plan expenses. The maximum 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 received an Income Protection Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 permits organizations to claim the ERC even if they got a PPP loan. However, the same wages can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and boosted, enabling qualified companies to claim the credit for certified incomes paid as far back as March 13, 2020. This retroactive provision supplies an opportunity for services to change prior-year tax returns and receive refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their employment tax returns, normally Form 941. If the credit surpasses the amount of employment taxes owed, the excess can be reimbursed to the employer.
It is very important to note that the ERC provisions and eligibility criteria have actually evolved in time. The best strategy is to speak with a tax expert or check out the official IRS website for the most up-to-date and in-depth information regarding the ERC, including any current legislative modifications or updates.
To qualify for the ERC, a business must satisfy one of the following criteria:.
The business operations were completely or partially suspended due to a government order related to COVID-19.
Business experienced a substantial decline in gross receipts. For 2021, a substantial decline is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the right away preceding quarter.
The ERC is available to companies of all sizes, including tax-exempt organizations, but there are some exceptions. For instance, federal government entities and businesses that got a PPP loan may have restrictions on declaring the credit.
The procedure for declaring the ERC involves completing the essential kinds and including the credit on your work income tax return (generally Form 941). The exact time it takes to process the credit can differ based on several aspects, including the complexity of your organization and the work of the internal revenue service. It’s recommended to consult with a tax professional for guidance particular to your scenario.
There are a number of business that can assist with the process of declaring the ERC. Some well-known business that provide help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the details offered here is based upon general understanding and might not show the most current updates or changes to the ERC. It is very important to speak with a tax expert or check out the official internal revenue service website for the most accurate and up-to-date details regarding eligibility, claiming procedures, and readily available help.
Less than 100. The credit is based if the employer had 100 or less employees on average in 2019.
on salaries paid to all workers whether they actually worked or not. Simply put, even if the.
staff members worked full time and made money for full time work, the company still gets the credit.
Greater than 100. The credit is if the employer had more than 100 workers on average in 2019.
permitted just for wages paid to workers who did not work during the calendar quarter.
In both cases, “incomes” includes not simply money payments but also a part of the expense of company.
provided health care. How To Report Employee Retention Credit
Companies can be right away compensated for the credit by reducing the amount of payroll taxes they.