Lets talk first about Is The Employee Retention Credit Worth It :
Our group here what do these people doing everybody in this room is assisting teach individuals about ERC and uh always provide a stunning breakfast and have people truly learn more about the program we need to head to the space where we have the ability to display some 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 clients verifying that the check is on the method I imply you know if you just 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 mean it’s simply I suggest consider the number of real clients 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 verified and the check is on the mail in the mail from the internal revenue service heading to the customer so that’s how you’re able to track it you understand when you
get this you understand the check is gone for sure which’s when they pay so they do not pay anything up until they really 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 checking account and they can really trust Wonder trust that the process has been finished and the number of you think you have actually processed given that you began this we have to do with 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 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 discussing something truly important today the staff member retention credit which most of you have actually never heard of I certainly had not become aware of it until very just recently and found out 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 workers in between 5 and five hundred so I have actually got the professional 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 challenging this isn’t like PPP we just call your bank supervisor and state offer 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 become yes the Ambassador and paid spokesperson for this I enjoy this program it’s disappearing very soon you got to find out 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 companies 3 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 distinction right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the money cash payroll tax refund all right go on sorry I just have to make certain we got that point I indicate that’s a big distinction a loan versus cash cash I like money cash that’s what we’re talking about fine 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 tough check in the mail where you get actual money from the IRS all right so let’s speak about how it works because it seems like to me if it’s a if it’s worker retention credit that person needed to be a worker 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 employees right you needed to have actually owned a service however it’s based on you having W-2 employees in America not 10.99. As long as you had W-2 employees and you paid federal payroll taxes that’s why you would be eligible so you have 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 proper so there were six quarters the program was open well walk us through the six quarters so you had quarters 2 three and 4 of 2020 and you had quarters one two and 3 of 2021. all right so that’s how it’s measured you have to be on the W-2 during that period now let’s talk my favorite part cash how much can you get back per employee 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 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the worker’s salary to an optimum of seven thousand per quarter how did that take place um they simply altered 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 5 thousand Max and then what happens 21 000 Max in 2021 oh that’s how you develop twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty six thousand dollars per employee that is because that’s a great deal of money it is now there’s a caveat here the PPP cash would have to be reduced from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would reduce the 26 000 so what we’re seeing typically Kevin is if you took PPP money someplace around ten thousand dollars a person so let’s say hypothetically you owned a restaurant in New York City where I’m from and you had a hundred staff members and you took PPP cash you would still get a million dollar in the mail from the IRS so it’s big clearly now the big question is why does nobody understand about this because appearance when I first found out about this when I first met Josh you know I have actually got lots of investments in great deals of companies I’m a major supporter for entrepreneurship in America and make lots of numerous financial investments in entrepreneurs of which lots of suffered through the pandemic when I initially became aware of this I called BS I don’t think it due to the fact that I use the PPP we went through the money center Banks to get it it was extremely easy to do we had our CEOs call the banks they got their loans and that were well should have and we used them carefully to stay alive during 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 good friends Governor Senators they didn’t understand about it I imply that’s how you know that’s how misinformation is that there’s no info out there then a lot of people informed me well you can’t get it because you took the PPP likewise not true so let’s ask Josh why does nobody learn about the employee retention credit you understand what’s interesting you’re speaking about the banks Kevin because in the PPP loan process the federal government made it very 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 just procedure process that’s all um and here there was mayhem 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 anyone about how to.
do this does your CFO know 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 some of them are doing it as a payroll business your accountant no your accounting professional’s never ever done this prior to unless you have an account that went into this service and bottom line my company Kevin has been in business given that 2009 and we’ve been working with the federal government and the state federal government to recuperate cash for Fortune 500 Fortune 1000 companies so a great deal of our big huge corporate clients have actually dealt with bottom line to recover other federal government programs we have actually done sales tax and utilize tax joblessness tax work chance tax credits research and development tax credits unclaimed property real estate tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit created to encourage.
companies to keep staff members on their payroll. The credit is 50% of as much as $10,000 in incomes paid by an.
Because of COVID-19 or whose gross invoices, employer whose service is fully 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.
just two exceptions: (1) state and local governments and their instrumentalities and (2) small.
companies who take Small Business Loans.
2. To qualify, the employer has to meet one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s business is fully or partially suspended by 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. Once the.
employer’s gross receipts go above 80% of an equivalent 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 incomes 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 earnings varies by whether a company had, on average, more or less than.
100 employees in 2019.
Companies that specialize in ERC filing support normally provide expertise and support to assist services browse the complex procedure of declaring the credit. They can use numerous services, consisting of:.
How is the employee retention credit calculated? Is The Employee Retention Credit Worth It
Eligibility Evaluation: These companies will examine your business’s eligibility for the ERC based upon factors such as your market, income, and operations. They can help determine if you satisfy the requirements for the credit and identify the maximum credit amount you can claim.
Documents and Estimation: ERC filing services will help in gathering the needed paperwork, such as payroll records and financial declarations, to support your claim. They will likewise help calculate the credit amount based on eligible incomes and other qualifying expenditures.
Retroactive Claim Review: If you are qualified to claim the ERC for prior quarters, these companies can review your past payroll records and financials to determine potential opportunities for retroactive credits. They can help you change previous tax returns to declare these refunds.
Filing Help: Business concentrating on ERC filings will prepare and submit the required types and documentation on your behalf. This includes finishing Type 941 or any other required tax return.
Compliance and Updates: ERC policies and guidance have developed in time. These business stay upgraded with the current modifications and make sure that your filings adhere to the most existing guidelines. They can likewise offer continuous assistance if the internal revenue service demands extra details or carries out an audit related to your ERC claim.
It’s important to research study and vet any company using ERC filing assistance to ensure their trustworthiness and knowledge. Look for established firms with experience in tax and payroll services, or think about reaching out to trusted accounting firms or tax professionals who provide ERC filing support.
Keep in mind that while these companies can offer important help, it’s always an excellent concept to have a fundamental understanding of the ERC requirements and process yourself. This will assist you make informed decisions and make sure accurate 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 motivate companies to maintain and pay their staff members throughout the pandemic, even if their operations have actually been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to eligible companies, including for-profit services, tax-exempt companies, and certain governmental entities. To certify, employers must fulfill one of two criteria:.
The business operations were fully or partially suspended due to a federal government order related to COVID-19.
The business experienced a substantial decline in gross invoices. As mentioned previously, for 2021, a substantial decrease is defined as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decrease in gross invoices compared to the exact 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 amounts to a portion (up to 70%) of qualified earnings paid to workers, including certain 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: Initially, businesses that received an Income Protection Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 permits companies to claim the ERC even if they received a PPP loan. The very same salaries can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and enhanced, allowing qualified employers to claim the credit for certified earnings paid as far back as March 13, 2020. This retroactive arrangement provides a chance for organizations to amend prior-year income tax return and receive refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their employment income tax return, generally Type 941. The excess can be refunded to the company if the credit surpasses the quantity of work taxes owed.
It is necessary to note that the ERC arrangements and eligibility requirements have evolved with time. The very best course of action is to talk to a tax professional or check out the official internal revenue service site for the most up-to-date and detailed information concerning the ERC, consisting of any recent legal changes or updates.
To receive the ERC, a business must satisfy among the following requirements:.
Business operations were completely or partially suspended due to a federal government order related to COVID-19.
Business experienced a significant decrease 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 considerable decline is specified as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decline in gross invoices compared to the right away preceding quarter.
The ERC is readily available to services of all sizes, consisting of tax-exempt organizations, but there are some exceptions. For example, federal government entities and businesses that received a PPP loan might have limitations on claiming the credit.
The process for declaring the ERC involves finishing the required types and consisting of the credit on your work tax return (usually Type 941). The exact time it takes to process the credit can vary based upon several elements, including the intricacy of your business and the workload of the internal revenue service. It’s advised to speak with a tax professional for guidance particular to your situation.
There are a number of companies that can assist with the process of declaring the ERC. These include accounting firms, tax advisory services, and payroll service providers. Some widely known business that use support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research and call these business directly to ask about their costs and services.
Please note that the information offered here is based on basic knowledge and may not reflect the most current updates or changes to the ERC. It is essential to seek advice from a tax expert or visit the official internal revenue service website for the most precise and current details relating to eligibility, declaring treatments, and offered support.
Less than 100. The credit is based if the employer had 100 or less workers on average in 2019.
on salaries paid to all employees whether they in fact 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 company had more than 100 workers on average in 2019.
enabled only for earnings paid to employees who did not work throughout the calendar quarter.
In both cases, “incomes” includes not just money payments but also a part of the expense of employer.
offered healthcare. Is The Employee Retention Credit Worth It
Companies can be right away reimbursed for the credit by lowering the amount of payroll taxes they.