Lets talk first about Is The Employee Retention Credit A Real Thing :
Our team here what do these guys doing everyone in this room is helping teach individuals about ERC and uh constantly provide a lovely breakfast and have individuals actually discover the program we must head to the space where we have the ability to display a few of the checks that we are getting for business and I ‘d like to see that what is this this is uh numerous countless dollars literally Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to customers validating that the check is on the method I indicate you know if you simply start 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 simply I indicate think of 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 verified the numbers are confirmed and the check is on the mail in the mail from the internal revenue service heading to the consumer so that’s how you’re able to track it you understand when you
receive this you understand the check is chosen sure and that’s when they pay so they don’t pay anything until they really receive the cash they do not pay bottom line Wonder trust anything till this letter is validated the check is on the way they deposit it into their bank 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 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 which’s what you require you need professionals on the other end of the phone to process this and get it to where you get among these that’s what matters all right Mr Terrific here you’re at my YouTube channel we’re speaking about something really important today the worker retention credit which most of you have actually never ever become aware of I certainly hadn’t heard of it until really recently and learned a lot about it due to the fact that this is most likely the most affordable expense of capital for any small business anywhere
anytime if you have employees in between five and five hundred so I have actually got the expert with me this is Josh Fox he’s the creator and CEO of bottom line Concepts they’re the biggest processor of these ERC credits this is a 170 page program so it’s difficult this isn’t like PPP we simply call up your bank supervisor and say offer 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 ended up being yes the Ambassador and paid spokesperson for this I enjoy 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 just begin there so throughout the Trump Administration when President Trump was enacted they developed the cares Act and the cares act used services three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone it makes a big distinction right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
remedy the cash cash payroll tax refund all right go on sorry I simply need to make certain we got that point I imply that’s a big distinction a loan versus money money I like cash money that’s what we’re talking about 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 beautiful difficult check in the mail where you get actual money 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 staff member retention credit that person had to be an employee so I’m going to make the Assumption this cash is not for the owner not for people on the cap table not for shareholders it’s for staff members right you had to have owned an organization but it’s based on you having W-2 employees in America not 10.99. so as long as you had W-2 employees 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 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 2 3 and 4 of 2020 and you had quarters one 2 and 3 of 2021. okay 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 just how much can you return per worker that was on a W-2 in those 6 quarters so the calculation in 2020 to be precise Kevin is 50 of the employee’s salary to an optimum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers increased to 70 of the worker’s wage to an optimum of 7 thousand per quarter how did that occur um they simply altered the rules in.
2021 versus due to the fact that the chaos 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 then what takes place 21 000 Max in 2021 oh that’s how you create twenty 6 thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per employee that is since that’s a lot of money it is now there’s a caveat here the PPP money would have to be reduced from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would reduce the 26 000 so what we’re seeing on average Kevin is if you took PPP money 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 clearly now the huge concern is why does no one know about this since appearance when I first found out about this when I initially fulfilled Josh you understand I have actually got great deals of investments in lots of companies I’m a major supporter for entrepreneurship in America and make numerous many financial investments in entrepreneurs of which numerous suffered through the pandemic when I initially heard about this I called BS I don’t believe it due to the fact that 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 should have and we utilized them sensibly to survive during the pandemic so when I found out about this I stated nah it can’t be true however when I dug around I even called to my politician buddies Governor Senators they didn’t understand about it I indicate that’s how you know that’s how false information is that there’s no information out there then a bunch of individuals told me well you can’t get it because you took the PPP also not true so let’s ask Josh why does no one learn about the employee retention credit you know what’s intriguing you’re discussing the banks Kevin due to the fact that in the PPP loan procedure the federal government made it extremely clear that if you desired a PPP loan you would call Wells Fargo Citibank Bank of America any of the big banks in our nation and they would process procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s just process process that’s all um and here there was turmoil due to the fact that remember in the original cares act you could refrain from doing both programs so if you had actually done PPP you could refrain from doing ERC in the initial 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 any person about how to.
do this does your CFO understand how to do this not really she or he’s never ever done it previously do the banks do it nope the banks don’t do it the payroll business yeah a few of them are doing it as a payroll business your accountant no your accountant’s never ever done this before unless you have an account that entered into this company and bottom line my company Kevin has been in business because 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 lot of our big huge corporate clients have actually worked with bottom line to recuperate other government programs we have actually done sales tax and utilize tax joblessness tax work chance tax credits research and development tax credits unclaimed home property tax all of these other government programs.
The worker retention tax credit is a broad based refundable tax credit developed to motivate.
employers to keep staff members on their payroll. The credit is 50% of up to $10,000 in incomes paid by an.
Due to the fact that of COVID-19 or whose gross invoices, company whose organization is fully or partly suspended.
decline by more than 50%.
1. The credit is offered to all employers regardless of size including tax exempt companies. There are.
just two exceptions: (1) state and city governments and their instrumentalities and (2) little.
companies who take Small Business 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 service is totally or partly suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross invoices are listed below 50% of the comparable quarter in 2019. As soon as the.
employer’s gross receipts exceed 80% of a similar quarter in 2019 they no longer qualify.
after completion of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the certifying salaries paid up to $10,000 in overall.
It works for salaries paid after March 13th and before December 31, 2020.
The definition of qualifying wages varies by whether an employer had, usually, more or less than.
100 employees in 2019.
Business that specialize in ERC filing help typically supply proficiency and assistance to help businesses navigate the intricate process of claiming the credit. They can offer various services, consisting of:.
How is the employee retention credit calculated? Is The Employee Retention Credit A Real Thing
Eligibility Assessment: These business will assess your business’s eligibility for the ERC based upon aspects such as your industry, revenue, and operations. If you meet the requirements for the credit and determine the optimum credit quantity you can declare, they can assist identify.
Documents and Estimation: ERC filing services will assist in collecting the essential documentation, such as payroll records and monetary declarations, to support your claim. They will likewise help compute the credit amount based upon qualified wages and other qualifying expenditures.
Retroactive Claim Review: If you are qualified to declare the ERC for prior quarters, these companies can examine your previous payroll records and financials to identify potential opportunities for retroactive credits. They can help you amend previous income tax return to claim these refunds.
Filing Support: Business specializing in ERC filings will prepare and send the necessary forms and documents on your behalf. This consists of finishing Type 941 or any other required tax return.
Compliance and Updates: ERC policies and guidance have evolved with time. These business stay upgraded with the current modifications and ensure that your filings adhere to the most current standards. If the Internal revenue service demands additional information or conducts an audit associated to your ERC claim, they can likewise supply ongoing assistance.
It is very important to research study and veterinarian any company providing ERC filing assistance to guarantee their trustworthiness and expertise. Search for established companies with experience in tax and payroll services, or consider connecting to trusted accounting firms or tax professionals who provide ERC submitting assistance.
Bear in mind that while these business can provide valuable help, it’s constantly an excellent idea to have a standard understanding of the ERC requirements and procedure yourself. This will help you make notified choices and ensure precise filings.
The Worker 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 motivate organizations to keep and pay their staff members during the pandemic, even if their operations have been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is available to eligible companies, including for-profit businesses, tax-exempt companies, and specific governmental entities. To qualify, companies must satisfy one of two requirements:.
The business operations were fully or partly suspended due to a federal government order related to COVID-19.
Business experienced a substantial decline in gross receipts. As mentioned previously, for 2021, a considerable decrease is defined as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a substantial decline is defined as a 20% decline in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity is equal to a percentage (up to 70%) of qualified salaries paid to staff members, including specific health insurance costs. The optimum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, businesses that got a Paycheck Security Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 permits companies to declare the ERC even if they received a PPP loan. The very same incomes can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and boosted, permitting eligible companies to declare the credit for qualified earnings paid as far back as March 13, 2020. This retroactive arrangement provides a chance for companies to amend prior-year income tax return and get refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their work tax returns, typically Kind 941. If the credit surpasses the quantity of employment taxes owed, the excess can be refunded to the employer.
It is very important to note that the ERC provisions and eligibility requirements have evolved gradually. The best strategy is to speak with a tax expert or check out the main IRS site for the most comprehensive and current information relating to the ERC, including any recent legislative modifications or updates.
To receive the ERC, a company must meet among the following criteria:.
The business operations were fully or partially suspended due to a federal government order related to COVID-19.
Business experienced a significant decrease in gross receipts. For 2021, a substantial decrease is defined as a 20% decrease 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 receipts compared to the exact same quarter in 2019, or a 20% decline in gross receipts compared to the right away preceding quarter.
The ERC is readily available to services of all sizes, including tax-exempt companies, however there are some exceptions. For instance, federal government entities and organizations that got a PPP loan may have restrictions on declaring the credit.
The procedure for claiming the ERC involves finishing the essential types and including the credit on your employment tax return (generally Kind 941). The exact time it takes to process the credit can differ based upon numerous elements, consisting of the intricacy of your business 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 several companies that can assist with the procedure of declaring the ERC. Some popular business that provide assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the information offered here is based upon basic understanding and might not reflect the most recent updates or changes to the ERC. It is essential to speak with a tax professional or go to the main IRS site for the most current and accurate details relating to eligibility, declaring treatments, and readily available assistance.
Less than 100. The credit is based if the company had 100 or less staff members on average in 2019.
on incomes paid to all staff members whether they actually worked or not. To put it simply, even if the.
workers worked full-time and made money for full time work, the company still gets the credit.
Greater than 100. The credit is if the company had more than 100 staff members on average in 2019.
permitted only for incomes paid to employees who did not work throughout the calendar quarter.
In both cases, “wages” consists of not simply cash payments however likewise a part of the expense of employer.
provided healthcare. Is The Employee Retention Credit A Real Thing
Companies can be right away reimbursed for the credit by reducing the amount of payroll taxes they.