Lets talk first about Is Employee Retention Credit Income :
Our team here what do these men doing everybody in this room is helping teach individuals about ERC and uh always supply a lovely breakfast and have individuals actually learn about the program we must head to the space where we are able to display a few of the checks that we are getting for business and I wish to see that what is this this is uh numerous millions of dollars actually Kevin numerous millions of dollars so these are replicate copies of the letters that go to customers validating that the check is on the method I mean you understand if you just start 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 just I indicate 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’re able to track it you understand when you
get this you understand the check is opted for sure and that’s when they pay so they don’t pay anything till they in fact 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 really rely on Wonder trust that the procedure has been completed and the number of you believe you have actually processed since you began this we have to do with 35 000 of these for
about 6 billion dollars wow so clearly 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 Terrific here you’re at my YouTube channel we’re talking about something truly important today the staff member retention credit which the majority of you have actually never ever heard of I certainly had not heard of it up until really just recently and discovered a lot about it due to the fact that this is probably the lowest expense of capital for any small business anywhere
anytime if you have workers between five and five hundred so I’ve got the expert with me this is Josh Fox he’s the founder and CEO of bottom line Concepts they’re the largest processor of these ERC credits this is a 170 page program so it’s hard this isn’t like PPP we simply contact your bank supervisor and say provide 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’ve ended up being yes the Ambassador and paid representative for this I enjoy this program it’s disappearing very soon you got to discover everything about it let’s talk employee retention credit Josh Fox what is an ERC let’s just start there so throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act used services 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically 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.
remedy the money money payroll tax refund fine go on sorry I just have to make sure we got that point I indicate that’s a huge distinction a loan versus cash money I like money cash 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 original cares Act is the ERC and yes Kevin it is a gorgeous hard check in the mail where you get real cash from the IRS all right so let’s speak about how it works due to the fact that it sounds like to me if it’s a if it’s employee retention credit that person needed to be an employee so I’m going to make the Presumption 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 an organization however it’s based on you having W-2 employees 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 have to be on payroll for the very first 6 months of 2021 on the W-2 correct so there were 6 quarters the program was open well stroll us through the 6 quarters so you had quarters 2 3 and 4 of 2020 and you had quarters one 2 and 3 of 2021. alright so that’s how it’s determined you have to be on the W-2 during that duration now let’s talk my preferred part money how much can you get back per staff member that was on a W-2 in those 6 quarters so the estimation in 2020 to be exact Kevin is 50 of the staff member’s salary to a maximum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the worker’s wage to a maximum of seven thousand per quarter how did that occur um they simply changed the rules in.
2021 versus since 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 as much as five thousand Max and then what occurs 21 000 Max in 2021 oh that’s how you come up with twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty six thousand dollars per staff member that is since that’s a lot of cash it is now there’s a caution here the PPP money would have to be reduced 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 on average Kevin is if you took PPP cash someplace around 10 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 employees and you took PPP money you would still get a million dollar in the mail from the IRS so it’s substantial certainly now the big concern is why does nobody know about this due to the fact that appearance when I initially became aware of this when I initially met Josh you know I have actually got great deals of investments in lots of business I’m a major supporter for entrepreneurship in America and make lots of many financial investments in business owners of which many suffered through the pandemic when I first became aware of this I called BS I do not believe it because 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 used them wisely 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 contacted us to my politician friends Governor Senators they didn’t understand 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 individuals informed me well you can’t get it due to the fact that you took the PPP also not real so let’s ask Josh why does no one learn about the employee retention credit you understand what’s interesting you’re discussing the banks Kevin since in the PPP loan procedure the federal government made it extremely 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 procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply process process that’s all um and here there was turmoil because keep in mind in the original cares act you might refrain from doing both programs so if you had actually done PPP you could not do ERC in the initial program and when they changed 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 federal government never ever 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 in the past do the banks do it nope the banks don’t do it the payroll companies yeah some of them are doing it as a payroll company your accounting professional no your accounting professional’s never ever done this prior to unless you have an account that entered into this company and bottom line my firm Kevin has stayed in business given that 2009 and we’ve been working 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 huge corporate clients have actually dealt with bottom line to recover other government programs we’ve done sales tax and use tax unemployment tax work opportunity tax credits research and development tax credits unclaimed home real estate tax all of these other federal government programs.
The staff member retention tax credit is a broad based refundable tax credit created to encourage.
employers to keep employees on their payroll. The credit is 50% of up to $10,000 in wages paid by an.
company whose company is completely or partly suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is readily available to all employers despite size consisting of tax exempt organizations. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
businesses who take Small company Loans.
2. To qualify, the employer needs to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s business is completely or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross receipts are below 50% of the equivalent quarter in 2019. Once the.
employer’s gross receipts go above 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 total.
It is effective for earnings paid after March 13th and prior to December 31, 2020.
The meaning of qualifying incomes differs by whether a company had, typically, basically than.
100 employees in 2019.
Companies that concentrate on ERC filing help typically supply proficiency and assistance to assist businesses browse the complicated procedure of declaring the credit. They can provide various services, consisting of:.
How is the employee retention credit calculated? Is Employee Retention Credit Income
Eligibility Evaluation: These business will assess your company’s eligibility for the ERC based upon factors such as your market, income, and operations. They can help determine if you fulfill the requirements for the credit and determine the maximum credit amount you can claim.
Documents and Calculation: ERC filing services will assist in collecting the needed paperwork, such as payroll records and monetary statements, to support your claim. They will likewise assist determine the credit quantity based upon eligible earnings and other qualifying costs.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for previous quarters, these companies can examine your past payroll records and financials to determine potential opportunities for retroactive credits. They can help you modify prior tax returns to claim these refunds.
Filing Assistance: Companies specializing in ERC filings will prepare and send the required kinds and documents on your behalf. This includes completing Kind 941 or any other required tax forms.
Compliance and Updates: ERC regulations and assistance have progressed in time. These business remain upgraded with the latest changes and ensure that your filings adhere to the most current guidelines. They can also offer ongoing assistance if the internal revenue service requests extra information or conducts an audit related to your ERC claim.
It is essential to research study and veterinarian any business offering ERC filing support to ensure their reliability and proficiency. Look for established firms with experience in tax and payroll services, or think about connecting to trusted accounting firms or tax specialists who offer ERC filing assistance.
Remember that while these business can provide important assistance, it’s constantly a great concept to have a standard understanding of the ERC requirements and process yourself. This will help you make informed decisions and ensure precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief measures. The goal of the ERC is to encourage services to keep and pay their workers throughout the pandemic, even if their operations have actually been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to qualified employers, consisting of for-profit companies, tax-exempt companies, and certain governmental entities. To qualify, companies should fulfill one of two requirements:.
The business operations were completely or partly suspended due to a federal government order related to COVID-19.
Business experienced a significant decline in gross receipts. As pointed out earlier, for 2021, a significant decline 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 exact same quarter in 2019, or a 20% decrease in gross receipts compared to the immediately preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount amounts to a portion (approximately 70%) of qualified salaries paid to staff members, consisting of certain health insurance 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, services 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. However, the exact same salaries can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and enhanced, allowing qualified employers to claim the credit for qualified wages paid as far back as March 13, 2020. This retroactive provision supplies an opportunity for services to modify prior-year tax returns and receive refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their work income tax return, usually Form 941. If the credit goes beyond the quantity of employment taxes owed, the excess can be refunded to the company.
It is very important to keep in mind that the ERC provisions and eligibility criteria have progressed over time. The very best strategy is to talk to a tax professional or check out the main IRS site for the most up-to-date and in-depth details regarding the ERC, including any recent legal changes or updates.
To get approved for the ERC, an organization should meet one of the following requirements:.
The business operations were totally or partly suspended due to a federal government order related to COVID-19.
The business experienced a significant decline in gross invoices. 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 decline is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
The ERC is offered to services of all sizes, including tax-exempt companies, however there are some exceptions. Federal government entities and services that received a PPP loan might have constraints on declaring the credit.
The process for declaring the ERC involves finishing the necessary kinds and including the credit on your work tax return (generally Form 941). The exact time it requires to process the credit can vary based on a number of factors, including the complexity of your company and the workload of the IRS. It’s advised to talk to a tax professional for guidance particular to your situation.
There are numerous companies that can aid with the procedure of declaring the ERC. These include accounting companies, tax advisory services, and payroll company. Some widely known business that provide assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research and contact these companies straight to inquire about their charges and services.
Please note that the information provided here is based on basic knowledge and might not reflect the most current updates or changes to the ERC. It is very important to seek advice from a tax expert or visit the main internal revenue service site for the most up-to-date and accurate information regarding eligibility, claiming procedures, and available help.
Less than 100. If the company had 100 or less staff members on average in 2019, then the credit is based.
on earnings paid to all employees whether they really worked or not. To put it simply, even if the.
employees worked full-time and got paid for full-time work, the company still gets the credit.
Greater than 100. If the employer had more than 100 staff members on average in 2019, then the credit is.
permitted only for earnings paid to staff members who did not work throughout the calendar quarter.
In both cases, “salaries” consists of not simply cash payments but likewise a portion of the expense of employer.
offered healthcare. Is Employee Retention Credit Income
Companies can be immediately reimbursed for the credit by minimizing the quantity of payroll taxes they.