Lets talk first about Is There Really An Employee Retention Credit :
Our team here what do these guys doing everyone in this space is helping teach individuals about ERC and uh always offer a stunning breakfast and have individuals actually discover the program we should head to the space where we are able to show some of the checks that we are getting for companies and I ‘d like to see that what is this this is uh hundreds of millions of dollars actually Kevin numerous millions of dollars so these are replicate copies of the letters that go to customers confirming that the check is on the way I mean you know if you simply begin to look at a few 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 simply I imply 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 validated 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 have the ability to track it you understand when you
receive this you know the check is chosen sure and that’s when they pay so they do not pay anything till they actually get the money they don’t pay bottom line Wonder trust anything up until this letter is verified the check is on the method they transfer it into their bank account and they can really trust Wonder trust that the procedure has actually been ended up and how many you believe you’ve processed because you started this we have to do with 35 000 of these for
about six billion dollars wow so plainly 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 Wonderful here you’re at my YouTube channel we’re discussing something really important today the staff member retention credit which the majority of you have never heard of I certainly hadn’t heard of it up until very just recently and found out a lot about it due to the fact that this is probably the lowest cost of capital for any small company anywhere
anytime if you have employees in between 5 and five hundred so I’ve got the expert with me this is Josh Fox he’s the creator and CEO of bottom line Ideas they’re the largest processor of these ERC credits this is a 170 page program so it’s challenging this isn’t like PPP we just 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 inform us all about it and how to get it and why I’ve ended up being yes the Ambassador and paid spokesperson for this I like this program it’s going away soon you got to find out all 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 created the cares Act and the cares act provided businesses three 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 difference right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the cash cash payroll tax refund alright go on sorry I simply need to ensure we got that point I mean that’s a huge distinction a loan versus cash money I like money cash that’s what we’re speaking about 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 initial cares Act is the ERC and yes Kevin it is a beautiful hard check in the mail where you get actual money 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 worker retention credit that person had to be a staff member so I’m going to make the Assumption this cash is not for the owner not for individuals on the cap table not for shareholders it’s for employees right you needed to have actually owned an organization but 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 qualified 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 correct so there were 6 quarters the program was open well walk us through the 6 quarters so you had quarters 2 three and 4 of 2020 and you had quarters one 2 and 3 of 2021. okay 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 staff member that was on a W-2 in those six quarters so the calculation in 2020 to be exact Kevin is 50 of the employee’s salary to an optimum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers increased to 70 of the staff member’s wage to an optimum of seven thousand per quarter how did that take place um they just altered the rules in.
2021 versus because the mayhem of the pandemic so they wanted 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 takes place 21 000 Max in 2021 oh that’s how you develop twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per staff member 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 six thousand dollars so if you took PPP loan one and PPP loan two you would decrease the 26 000 so what we’re seeing usually Kevin is if you took PPP money somewhere around ten thousand dollars an individual 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 cash you would still get a million dollar in the mail from the IRS so it’s huge obviously now the big question is why does nobody understand about this since look when I initially became aware of this when I first met Josh you understand I have actually got great deals of investments in lots of business I’m a major advocate for entrepreneurship in America and make lots of many financial investments in entrepreneurs of which many suffered through the pandemic when I first found out about this I called BS I don’t think it because I use the PPP we went through the money 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 carefully to survive throughout the pandemic so when I found out about this I said nah it can’t hold true but when I dug around I even called to my politician friends Governor Senators they didn’t know about it I suggest that’s how you understand that’s how misinformation is that there’s no details out there then a bunch of individuals told me well you can’t get it due to the fact that you took the PPP also not true so let’s ask Josh why does nobody know about the staff member retention credit you understand what’s fascinating you’re discussing the banks Kevin since in the PPP loan process 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 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 procedure that’s all um and here there was chaos because keep in mind in the original cares act you might not do both programs so if you had done PPP you could refrain from doing ERC in the original program and when they changed the law in 2021 the banks were not doing ERC due to the fact that it’s not alone so you’re getting a tax refund so the government never ever made it clear to anyone about how to.
do this does your CFO know how to do this not actually he or she’s never done it previously 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 business your accountant no your accounting professional’s never done this prior to unless you have an account that entered into this organization and bottom line my company Kevin has actually been in business since 2009 and we’ve been dealing with the federal government and the state federal government to recuperate money for Fortune 500 Fortune 1000 business so a great deal of our big huge business 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 home property tax all of these other government programs.
The worker retention tax credit is a broad based refundable tax credit designed to motivate.
employers to keep staff members on their payroll. The credit is 50% of approximately $10,000 in wages paid by an.
employer whose company is fully or partially suspended because of COVID-19 or whose gross invoices.
decrease by more than 50%.
1. The credit is offered to all companies regardless of size consisting of tax exempt companies. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
organizations who take Small Business Loans.
2. To certify, the company has to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s service is fully or partly suspended by federal government order due to COVID-19.
throughout 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 works for incomes paid after March 13th and prior to December 31, 2020.
The definition of qualifying incomes differs by whether a company had, usually, basically than.
100 workers in 2019.
Companies that specialize in ERC filing assistance normally supply expertise and assistance to help businesses browse the complicated process of declaring the credit. They can offer different services, consisting of:.
How is the employee retention credit calculated? Is There Really An Employee Retention Credit
Eligibility Assessment: These companies will evaluate your company’s eligibility for the ERC based upon factors such as your industry, income, and operations. If you satisfy the requirements for the credit and identify the optimum credit amount you can declare, they can help figure out.
Documents and Calculation: ERC filing services will help in gathering the essential documents, such as payroll records and monetary declarations, to support your claim. They will also help compute the credit quantity based upon qualified earnings and other certifying costs.
Retroactive Claim Review: If you are eligible to declare the ERC for previous quarters, these companies can examine your past payroll records and financials to identify possible chances for retroactive credits. They can help you modify prior income tax return to claim these refunds.
Filing Assistance: Companies specializing in ERC filings will prepare and send the essential forms and paperwork in your place. This consists of finishing Kind 941 or any other required tax return.
Compliance and Updates: ERC regulations and guidance have evolved over time. These companies stay upgraded with the latest modifications and make sure that your filings adhere to the most present standards. They can likewise supply ongoing support if the IRS demands extra info or carries out an audit related to your ERC claim.
It is essential to research study and vet any company providing ERC filing support to ensure their credibility and proficiency. Look for established companies with experience in tax and payroll services, or consider reaching out to trusted accounting companies or tax specialists who provide ERC submitting assistance.
Remember that while these business can provide important support, it’s constantly an excellent idea to have a basic understanding of the ERC requirements and procedure yourself. This will assist you make informed decisions and make sure accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief procedures. The objective of the ERC is to motivate services to retain 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 readily available to qualified employers, consisting of for-profit organizations, tax-exempt companies, and particular governmental entities. To qualify, employers must satisfy one of two criteria:.
Business operations were totally or partly suspended due to a government order related to COVID-19.
Business experienced a significant decline in gross invoices. As discussed previously, for 2021, a significant decline is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a considerable decrease 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.
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, including specific health insurance expenses. 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, organizations that got a Paycheck Defense Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 enables services to claim the ERC even if they got a PPP loan. Nevertheless, the 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 boosted, permitting qualified employers to claim the credit for qualified earnings paid as far back as March 13, 2020. This retroactive provision provides an opportunity for services to modify prior-year tax returns and receive refunds.
Claiming the Credit: Companies can declare the ERC by reporting it on their employment tax returns, generally Kind 941. The excess can be reimbursed to the employer if the credit goes beyond the quantity of work taxes owed.
It’s important to note that the ERC arrangements and eligibility criteria have actually evolved in time. The best course of action is to consult with a tax professional or go to the main IRS site for the most comprehensive and up-to-date info concerning the ERC, including any recent legislative modifications or updates.
To qualify for the ERC, a company should satisfy among the following requirements:.
Business operations were fully or partly suspended due to a government order related to COVID-19.
Business experienced a substantial decline in gross receipts. For 2021, a significant decrease is specified as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a substantial decrease is specified as a 20% decrease in gross invoices 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 available to companies of all sizes, consisting of tax-exempt organizations, but there are some exceptions. Government entities and services that received a PPP loan might have restrictions on claiming the credit.
The procedure for claiming the ERC includes finishing the necessary kinds and consisting of the credit on your work income tax return (normally Form 941). The exact time it takes to process the credit can differ based on a number of aspects, consisting of the complexity of your service and the work of the IRS. It’s advised to speak with a tax professional for assistance specific to your circumstance.
There are several companies that can help with the process of claiming the ERC. Some popular business that provide help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the information offered here is based on general understanding and might not show the most recent updates or changes to the ERC. It is necessary to talk to a tax professional or check out the main internal revenue service site for the most current and precise details regarding eligibility, claiming treatments, and available support.
Less than 100. If the employer had 100 or less staff members typically in 2019, then the credit is based.
on incomes paid to all workers whether they really worked or not. Simply put, even if the.
workers worked full time and earned 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 just for wages paid to workers who did not work throughout the calendar quarter.
In both cases, “earnings” consists of not simply money payments but also a portion of the cost of company.
provided health care. Is There Really An Employee Retention Credit
Companies can be right away reimbursed for the credit by minimizing the quantity of payroll taxes they.