Lets talk first about Inflation Reduction Act Employee Retention Credit :
Our team here what do these guys doing everybody in this space is assisting teach individuals about ERC and uh constantly offer a gorgeous breakfast and have individuals really find out about the program we need to head to the space where we are able to display some of the checks that we are getting for companies and I wish to see that what is this this is uh hundreds of countless dollars literally Kevin numerous millions of dollars so these are duplicate copies of the letters that go to customers verifying that the check is on the way I imply you know if you simply begin to take a look at some of these here I imply this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s just I mean think of the number of actual 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 confirmed and the check is on the mail in the mail from the IRS heading to the customer so that’s how you’re able to track it you understand when you
get this you know the check is gone for sure which’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 until this letter is confirmed the check is on the way they transfer it into their bank account and they can truly rely on Wonder trust that the process has actually been ended up and how many you think you have actually processed given that you began this we have to do with 35 000 of these for
about 6 billion dollars wow so plainly they understand what they’re doing which’s what you need you require professionals 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 really essential today the staff member retention credit which most of you have never ever become aware of I definitely hadn’t heard of it till very just recently and learned a lot about it since this is most likely the most affordable expense of capital for any small company anywhere
anytime if you have employees in 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 largest processor of these ERC credits this is a 170 page program so it’s not easy this isn’t like PPP we just call up your bank manager and say give me a loan it does not 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 enjoy this program it’s disappearing soon you got to discover everything about it let’s talk worker retention credit Josh Fox what is an ERC let’s just begin there so throughout the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act offered businesses 3 chances 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.
remedy the money cash payroll tax refund all right go on sorry I simply have to make sure we got that point I indicate that’s a big distinction a loan versus money cash I like cash money that’s what we’re discussing okay 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 gorgeous hard check in the mail where you get actual cash from the IRS all right so let’s discuss how it works because it seems like to me if it’s a if it’s worker retention credit that person had to be an employee so I’m going to make the Presumption this money is not for the owner not for people on the cap table not for investors it’s for workers right you had to have owned a company but it’s based on you having W-2 workers 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 first six months of 2021 on the W-2 proper so there were 6 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 three of 2021. fine so that’s how it’s determined you need to be on the W-2 throughout that period now let’s talk my favorite part cash just how much can you return per staff member that was on a W-2 in those six quarters so the computation in 2020 to be precise Kevin is 50 of the worker’s income 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 salary to a maximum of seven thousand per quarter how did that take place um they simply altered 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 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 create twenty 6 thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty 6 thousand dollars per employee that is because that’s a lot of money it is now there’s a caution here the PPP cash would need to be minimized from the twenty six 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 ten thousand dollars a person so let’s say hypothetically you owned a dining establishment in New york city 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 huge question is why does no one learn about this due to the fact that look when I initially became aware of this when I first satisfied Josh you know I’ve got great deals of financial investments in great deals of business I’m a significant advocate for entrepreneurship in America and make many numerous investments in business owners of which lots of suffered through the pandemic when I initially heard about this I called BS I don’t think it since I utilize the PPP we went through the money 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 should have and we utilized them carefully to stay alive throughout the pandemic so when I became aware of this I said nah it can’t be true however when I dug around I even called to my political leader pals 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 bunch of people informed me well you can’t get it since you took the PPP also not true so let’s ask Josh why does no one know about the employee retention credit you know what’s interesting you’re talking about the banks Kevin due to the fact that in the PPP loan process 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 just process procedure that’s all um and here there was chaos because remember in the initial cares act you might not do both programs so if you had actually done PPP you might refrain from doing ERC in the original program and when they changed the law in 2021 the banks were not doing ERC since it’s not alone so you’re getting a tax refund so the federal 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 done it before do the banks do it nope the banks do not do it the payroll business yeah some of them are doing it as a payroll business your accounting professional no your accounting professional’s never done this prior to unless you have an account that entered into this business and bottom line my firm Kevin has actually been in business given that 2009 and we’ve been working with the federal government and the state federal government to recuperate money for Fortune 500 Fortune 1000 companies so a great deal of our big huge business customers have dealt with bottom line to recover other federal government programs we have actually done sales tax and utilize tax unemployment tax work opportunity tax credits research and development tax credits unclaimed property property tax all of these other federal government programs.
The staff member retention tax credit is a broad based refundable tax credit created to encourage.
companies to keep employees on their payroll. The credit is 50% of up to $10,000 in wages paid by an.
Because of COVID-19 or whose gross receipts, company whose business is completely or partially suspended.
decline by more than 50%.
1. The credit is offered to all employers regardless of size including tax exempt organizations. There are.
just two exceptions: (1) state and city governments and their instrumentalities and (2) small.
companies who take Small Business Loans.
2. To certify, the company needs to meet one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s organization is totally or partly suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross receipts are listed below 50% of the comparable quarter in 2019. When 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 earnings paid up to $10,000 in total.
It works for wages paid after March 13th and prior to December 31, 2020.
The definition of certifying salaries varies by whether an employer had, typically, basically than.
100 employees in 2019.
Companies that specialize in ERC filing support typically offer proficiency and assistance to help companies navigate the intricate procedure of claiming the credit. They can use different services, including:.
How is the employee retention credit calculated? Inflation Reduction Act Employee Retention Credit
Eligibility Assessment: These business will assess your service’s eligibility for the ERC based upon aspects such as your market, income, and operations. If you fulfill the requirements for the credit and identify the maximum credit quantity you can declare, they can assist determine.
Paperwork and Estimation: ERC filing services will assist in collecting the essential documentation, such as payroll records and monetary statements, to support your claim. They will also assist determine the credit quantity based upon eligible earnings and other certifying expenses.
Retroactive Claim Review: If you are qualified to claim the ERC for prior quarters, these companies can examine your past payroll records and financials to identify possible chances for retroactive credits. They can assist you amend previous tax returns to declare these refunds.
Filing Help: Business focusing on ERC filings will prepare and send the needed forms and paperwork on your behalf. This includes finishing Form 941 or any other necessary tax forms.
Compliance and Updates: ERC guidelines and assistance have progressed with time. These business remain updated with the current changes and ensure that your filings adhere to the most present standards. If the IRS demands extra info or conducts an audit associated to your ERC claim, they can also supply ongoing assistance.
It is necessary to research study and veterinarian any business providing ERC filing help to ensure their credibility and competence. Try to find recognized companies with experience in tax and payroll services, or consider reaching out to relied on accounting companies or tax specialists who use ERC filing support.
Keep in mind that while these companies can offer important help, it’s always a great idea to have a basic understanding of the ERC requirements and procedure yourself. This will help you make notified choices and make sure precise filings.
The Employee 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 encourage companies to retain and pay their staff members throughout the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to qualified companies, including for-profit organizations, tax-exempt organizations, and specific governmental entities. To qualify, employers should satisfy one of two requirements:.
The business operations were totally or partly suspended due to a government order related to COVID-19.
The business experienced a significant decrease in gross invoices. As mentioned earlier, for 2021, a substantial decrease is defined as a 20% decline in gross invoices 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 exact same quarter in 2019, or a 20% decrease in gross receipts compared to the right away preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity amounts to a percentage (up to 70%) of certified wages paid to employees, consisting of specific health plan expenditures. The optimum 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, organizations that got a Paycheck Protection Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 enables organizations to claim the ERC even if they received a PPP loan. The exact same earnings can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and improved, permitting eligible companies to declare the credit for certified wages paid as far back as March 13, 2020. This retroactive provision offers a chance for organizations to modify prior-year income tax return and receive refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their work income tax return, generally Type 941. The excess can be refunded to the employer if the credit goes beyond the amount of work taxes owed.
It is essential to keep in mind that the ERC provisions and eligibility requirements have actually evolved in time. The best strategy is to speak with a tax professional or visit the official IRS website for the most updated and comprehensive details concerning the ERC, consisting of any recent legal modifications or updates.
To receive the ERC, an organization should fulfill among 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 invoices. For 2021, a considerable decline is defined as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decline in gross invoices compared to the immediately preceding quarter.
The ERC is readily available to businesses of all sizes, including tax-exempt companies, but there are some exceptions. For example, government entities and companies that got a PPP loan may have constraints on declaring the credit.
The procedure for declaring the ERC involves finishing the needed kinds and consisting of the credit on your employment income tax return (typically Form 941). The exact time it takes to process the credit can vary based on numerous factors, including the complexity of your company and the workload of the IRS. It’s advised to talk to a tax expert for assistance particular to your circumstance.
There are a number of companies that can help with the procedure of claiming the ERC. Some well-known business that use support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the information offered here is based on basic knowledge and may not show the most current updates or modifications to the ERC. It’s important to seek advice from a tax expert or check out the main internal revenue service website for the most updated and accurate info concerning eligibility, declaring treatments, and available assistance.
Less than 100. If the employer had 100 or fewer employees on average in 2019, then the credit is based.
on salaries paid to all staff members whether they actually worked or not. In other words, even if the.
staff members worked full-time and made money for full time work, the employer 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 just for salaries paid to employees who did not work during the calendar quarter.
In both cases, “earnings” consists of not simply cash payments but also a portion of the expense of company.
supplied health care. Inflation Reduction Act Employee Retention Credit
Companies can be immediately reimbursed for the credit by minimizing the amount of payroll taxes they.