Lets talk first about Irs.Gov Employee Retention Credit Faq :
Our team here what do these people doing everybody in this space is helping teach people about ERC and uh constantly supply a beautiful breakfast and have people really learn more about the program we ought to head to the room where we are able to show a few of the checks that we are getting for companies and I want to see that what is this this is uh hundreds of millions of dollars literally 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 way I imply you know 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 suggest it’s just I suggest consider 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 validated the numbers are validated and the check is on the mail in the mail from the IRS heading to the client so that’s how you have the ability to track it you understand when you
get this you understand the check is chosen sure and that’s when they pay so they don’t pay anything up until they actually receive the money they don’t pay bottom line Wonder trust anything up until this letter is confirmed the check is on the way they transfer 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 think you have actually processed because you began this we have to do with 35 000 of these for
about 6 billion dollars wow so clearly they know what they’re doing and that’s what you need 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 Fantastic here you’re at my YouTube channel we’re talking about something actually crucial today the employee retention credit which most of you have never ever heard of I certainly hadn’t become aware of it until very recently and learned a lot about it due to the fact that this is probably the lowest cost of capital for any small business anywhere
anytime if you have employees between five 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 Principles they’re the biggest processor of these ERC credits this is a 170 page program so it’s hard this isn’t like PPP we just phone your bank manager 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 all of us 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 going away very soon you got to discover everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just begin there so during the Trump Administration when President Trump was enacted they created the cares Act and the cares act provided companies three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody it makes a huge difference right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the cash money payroll tax refund alright go on sorry I simply need to make sure we got that point I suggest that’s a huge distinction a loan versus money money I like cash money that’s what we’re discussing 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 lovely hard check in the mail where you get actual cash from the internal revenue service all right so let’s speak about how it works since it seems like to me if it’s a if it’s worker retention credit that person had to be a staff member so I’m going to make the Assumption this money is not for the owner not for individuals on the cap table not for investors 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 staff members and you paid federal payroll taxes that’s why you would be eligible so you need to be on payroll in 2020 on the W-2 and you have to be on payroll for the first 6 months of 2021 on the W-2 right so there were six quarters the program was open well stroll us through the 6 quarters so you had quarters two 3 and four of 2020 and you had quarters one two and three of 2021. all right so that’s how it’s measured you need to be on the W-2 throughout that period now let’s talk my preferred part cash how much can you get back 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 income to an optimum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the employee’s salary to an optimum of seven thousand per quarter how did that happen 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 workers on payroll 100 so if you can get 5 000 per person Max in twenty that was 50 in 2020 approximately five 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 six thousand dollars per worker that is since that’s a lot of money it is now there’s a caveat here the PPP cash would have to be decreased from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would lower the 26 000 so what we’re seeing usually Kevin is if you took PPP cash someplace around 10 thousand dollars an individual so let’s state hypothetically you owned a dining establishment in New York City where I’m from and you had a hundred staff members and you took PPP money you would still get a million dollar in the mail from the internal revenue service so it’s huge obviously now the big concern is why does no one understand about this due to the fact that look when I initially heard about this when I initially satisfied Josh you understand I have actually got great deals of financial investments in lots of business I’m a significant advocate for entrepreneurship in America and make numerous many financial investments in entrepreneurs of which lots of suffered through the pandemic when I first heard about this I called BS I don’t believe 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 throughout the pandemic so when I heard about this I stated nah it can’t hold true however when I dug around I even called to my politician buddies Guv Senators they didn’t understand about it I imply that’s how you know that’s how false information is that there’s no info out there then a bunch of individuals informed me well you can’t get it because you took the PPP also not real so let’s ask Josh why does nobody understand about the employee retention credit you know what’s fascinating you’re speaking about the banks Kevin because in the PPP loan process the federal government made it very 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 turmoil because keep in mind in the original cares act you might not do 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 refraining from doing ERC since 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 know 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 do not do it the payroll business yeah a few of them are doing it as a payroll company your accounting professional no your accounting professional’s never done this before unless you have an account that entered into this business and bottom line my company Kevin has actually been in business given that 2009 and we’ve been dealing with the federal government and the state federal government to recuperate money for Fortune 500 Fortune 1000 companies so a great deal of our huge huge business clients have actually dealt with bottom line to recuperate 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 real estate tax all of these other government programs.
The worker retention tax credit is a broad based refundable tax credit developed to motivate.
companies to keep staff members on their payroll. The credit is 50% of up to $10,000 in earnings paid by an.
Due to the fact that of COVID-19 or whose gross receipts, company whose business is totally or partially suspended.
decrease by more than 50%.
1. The credit is offered to all companies no matter size including tax exempt companies. There are.
just 2 exceptions: (1) state and city governments and their instrumentalities and (2) little.
businesses who take Small company Loans.
2. To certify, the company needs to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s organization is completely or partially 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 similar quarter in 2019. When the.
company’s gross invoices go above 80% of a comparable quarter in 2019 they no longer qualify.
after the end of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the certifying wages paid up to $10,000 in overall.
It is effective for earnings paid after March 13th and before December 31, 2020.
The meaning of certifying wages varies by whether a company had, on average, basically than.
100 staff members in 2019.
Companies that concentrate on ERC filing assistance generally supply know-how and assistance to help businesses navigate the intricate procedure of declaring the credit. They can provide various services, consisting of:.
How is the employee retention credit calculated? Irs.Gov Employee Retention Credit Faq
Eligibility Assessment: These business will assess your service’s eligibility for the ERC based on factors such as your market, earnings, and operations. They can assist figure out if you satisfy the requirements for the credit and identify the optimum credit quantity you can declare.
Documents and Calculation: ERC filing services will assist in collecting the needed documents, such as payroll records and monetary declarations, to support your claim. They will also help determine the credit amount based on eligible wages and other certifying costs.
Retroactive Claim Review: If you are qualified to declare the ERC for previous quarters, these business can evaluate your past payroll records and financials to determine potential opportunities for retroactive credits. They can assist you amend previous tax returns to claim these refunds.
Filing Help: Business specializing in ERC filings will prepare and submit the needed kinds and documents on your behalf. This includes finishing Kind 941 or any other required tax return.
Compliance and Updates: ERC policies and assistance have developed in time. These companies remain updated with the current modifications and make sure that your filings adhere to the most existing standards. If the Internal revenue service demands additional information or conducts an audit associated to your ERC claim, they can also provide continuous assistance.
It’s important to research study and vet any business providing ERC filing assistance to ensure their credibility and expertise. Try to find recognized firms with experience in tax and payroll services, or think about connecting to relied on accounting companies or tax professionals who use ERC filing assistance.
Keep in mind that while these companies can provide important support, it’s always an excellent concept to have a fundamental understanding of the ERC requirements and procedure yourself. This will assist you make informed choices and make sure precise filings.
The Staff Member 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 motivate businesses to retain and pay their workers during the pandemic, even if their operations have actually been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to eligible companies, including for-profit companies, tax-exempt companies, and specific governmental entities. To qualify, companies need to meet one of two criteria:.
The business operations were fully or partially suspended due to a federal government order related to COVID-19.
Business experienced a considerable decline in gross invoices. As pointed out earlier, for 2021, a significant decrease is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decline in gross invoices compared to the very same quarter in 2019, or a 20% decline in gross invoices compared to the instantly preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit quantity amounts to a portion (approximately 70%) of qualified salaries paid to workers, including particular health plan costs. 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, organizations that received a Paycheck Protection Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 allows organizations to claim the ERC even if they got a PPP loan. However, the exact same salaries can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and boosted, allowing eligible companies to declare the credit for certified wages paid as far back as March 13, 2020. This retroactive provision offers an opportunity for companies to modify prior-year income tax return and receive refunds.
Declaring the Credit: Employers can declare the ERC by reporting it on their work tax returns, generally Type 941. If the credit goes beyond the amount of work taxes owed, the excess can be refunded to the company.
It’s important to keep in mind that the ERC arrangements and eligibility criteria have progressed with time. The very best course of action is to consult with a tax professional or check out the main IRS site for the most comprehensive and current info relating to the ERC, consisting of any current legislative modifications or updates.
To qualify for the ERC, a service should fulfill one of the following requirements:.
The business operations were totally or partially suspended due to a federal government order related to COVID-19.
The business experienced a substantial decline in gross receipts. For 2021, a considerable decline is specified as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decline in gross invoices compared to the instantly preceding quarter.
The ERC is offered to organizations of all sizes, including tax-exempt organizations, but there are some exceptions. For instance, government entities and services that received a PPP loan may have limitations on claiming the credit.
The process for claiming the ERC includes finishing the needed kinds and consisting of the credit on your employment tax return (usually Type 941). The exact time it takes to process the credit can vary based on several factors, consisting of the intricacy of your service and the work of the IRS. It’s recommended to talk to a tax expert for assistance particular to your situation.
There are a number of business that can help with the procedure of claiming the ERC. Some well-known companies that use help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the info provided here is based upon basic knowledge and may not reflect the most current updates or changes to the ERC. It is essential to talk to a tax expert or visit the main internal revenue service site for the most precise and current information regarding eligibility, declaring treatments, and readily available help.
Less than 100. If the company had 100 or fewer staff members on average in 2019, then the credit is based.
on salaries paid to all staff members whether they in fact worked or not. In other words, even if the.
staff members worked full time and got paid for full-time work, the employer still gets the credit.
Greater than 100. The credit is if the company had more than 100 staff members on average in 2019.
allowed just for salaries paid to employees who did not work during the calendar quarter.
In both cases, “salaries” consists of not just money payments but also a portion of the expense of employer.
provided health care. Irs.Gov Employee Retention Credit Faq
Employers can be instantly repaid for the credit by reducing the quantity of payroll taxes they.