Lets talk first about Is There Such A Thing As Employee Retention Credit :
Our team here what do these people doing everybody in this space is helping teach individuals about ERC and uh always offer a lovely breakfast and have individuals actually discover the program we ought to head to the room where we have the ability to show some of the checks that we are getting for companies and I wish to see that what is this this is uh hundreds of millions of dollars actually Kevin numerous millions of dollars so these are duplicate copies of the letters that go to customers confirming that the check is on the method I imply you know if you simply 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 imply it’s simply I indicate consider how many real clients that went through the program yeah this is the very end this is the party at the end when the check is verified the numbers are verified 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 know when you
receive this you understand the check is gone for sure and that’s when they pay so they don’t pay anything until they actually receive the money they don’t 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 truly trust Wonder trust that the process has been finished and the number of you believe you have actually processed since you started this we’re about 35 000 of these for
about 6 billion dollars wow so clearly they know what they’re doing which’s what you need you require experts 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 Fantastic here you’re at my YouTube channel we’re talking about something truly crucial today the employee retention credit which the majority of you have actually never ever heard of I certainly hadn’t become aware of it until very just recently and discovered a lot about it due to the fact that this is most likely the most affordable expense of capital for any small company anywhere
anytime if you have workers in between five 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 Concepts they’re the biggest processor of these ERC credits this is a 170 page program so it’s not easy this isn’t like PPP we just phone your bank supervisor and state 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 become yes the Ambassador and paid spokesperson for this I love this program it’s going away soon you got to find out everything about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply start there so throughout the Trump Administration when President Trump was enacted they came up with 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 nearly 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.
correct the cash cash payroll tax refund all right go on sorry I simply have to make sure we got that point I suggest that’s a big distinction a loan versus money money I like money cash that’s what we’re talking 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 original cares Act is the ERC and yes Kevin it is a lovely difficult check in the mail where you get actual money from the internal revenue service all right so let’s discuss how it works because it sounds like to me if it’s a if it’s worker retention credit that individual had 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 but it’s based upon 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 six months of 2021 on the W-2 proper so there were 6 quarters the program was open well walk us through the six quarters so you had quarters two 3 and 4 of 2020 and you had quarters one two and 3 of 2021. okay so that’s how it’s determined you have to be on the W-2 throughout that period now let’s talk my favorite part money how much can you return per worker 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 salary to a maximum of 5 thousand dollars per staff member for the year of 2020 and in 2021 the numbers escalated to 70 of the worker’s income to a maximum of 7 thousand per quarter how did that occur um they simply changed the rules in.
2021 versus due to the fact that 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 as much as 5 thousand Max and then what takes place 21 000 Max in 2021 oh that’s how you create twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per employee that is because that’s a great deal of cash it is now there’s a caveat here the PPP cash would need to be lowered from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would reduce the 26 000 so what we’re seeing typically Kevin is if you took PPP cash somewhere around ten thousand dollars a person so let’s say 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 huge undoubtedly now the big question is why does no one understand about this since look when I first found out about this when I first fulfilled Josh you know I have actually got lots of financial investments in lots of business I’m a major supporter for entrepreneurship in America and make many numerous investments in entrepreneurs of which lots of suffered through the pandemic when I first became aware of this I called BS I do not think it because I utilize the PPP we went through the cash 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 been worthy of and we utilized them carefully to survive throughout the pandemic so when I found out about this I said nah it can’t be true but when I dug around I even called to my politician friends Guv Senators they didn’t know about it I indicate that’s how you understand that’s how false information is that there’s no details out there then a bunch of individuals informed me well you can’t get it because you took the PPP also not true so let’s ask Josh why does no one understand about the worker retention credit you know what’s interesting you’re talking about the banks Kevin because in the PPP loan process the federal government made it really clear that if you desired 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 procedure procedure that’s all um and here there was chaos since keep in mind in the initial 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 due to the fact that it’s not alone so you’re getting a tax refund so the federal government never ever made it clear to anybody about how to.
do this does your CFO understand how to do this not truly she or he’s never ever done it in the past do the banks do it nope the banks do not do it the payroll companies yeah a few of them are doing it as a payroll business your accounting professional no your accounting professional’s never ever done this prior to unless you have an account that entered into this organization and bottom line my company Kevin has actually stayed in business since 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 huge big corporate clients have actually dealt with bottom line to recover other government programs we’ve done sales tax and use tax unemployment tax work chance tax credits research and development tax credits unclaimed property real estate tax all of these other federal government programs.
The worker retention tax credit is a broad based refundable tax credit created to encourage.
companies to keep employees on their payroll. The credit is 50% of up to $10,000 in earnings paid by an.
company whose business is completely or partly suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
1. The credit is offered to all employers regardless of size consisting of tax exempt organizations. There are.
just 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
organizations who take Small company Loans.
2. To certify, the company needs to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s business is completely or partly suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are below 50% of the comparable quarter in 2019. As soon as the.
company’s gross invoices go above 80% of a similar quarter in 2019 they no longer certify.
after completion of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the qualifying incomes paid up to $10,000 in total.
It works for wages paid after March 13th and before December 31, 2020.
The definition of qualifying earnings varies by whether an employer had, usually, basically than.
100 staff members in 2019.
Companies that focus on ERC filing help usually supply competence and assistance to assist businesses browse the intricate procedure of declaring the credit. They can use various services, consisting of:.
How is the employee retention credit calculated? Is There Such A Thing As Employee Retention Credit
Eligibility Evaluation: These companies will assess your business’s eligibility for the ERC based upon aspects such as your market, revenue, and operations. They can assist determine if you fulfill the requirements for the credit and identify the maximum credit amount you can claim.
Documentation and Computation: ERC filing services will help in gathering the necessary documentation, such as payroll records and monetary statements, to support your claim. They will also help determine the credit amount based upon qualified incomes and other certifying expenditures.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for previous quarters, these business can review your previous payroll records and financials to identify potential opportunities for retroactive credits. They can help you amend previous income tax return to declare these refunds.
Filing Support: Companies focusing on ERC filings will prepare and send the needed kinds and paperwork on your behalf. This consists of finishing Form 941 or any other required tax forms.
Compliance and Updates: ERC guidelines and guidance have progressed gradually. These companies stay upgraded with the current modifications and make sure that your filings adhere to the most present guidelines. If the IRS demands extra info or carries out an audit associated to your ERC claim, they can also offer continuous assistance.
It is necessary to research study and veterinarian any business offering ERC filing assistance to ensure their reliability and proficiency. Try to find recognized firms with experience in tax and payroll services, or consider reaching out to trusted accounting firms or tax specialists who use ERC filing assistance.
Keep in mind that while these companies can offer valuable help, it’s always an excellent idea to have a fundamental understanding of the ERC requirements and procedure yourself. This will assist you make notified choices and guarantee accurate filings.
The Worker 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 services to retain and pay their workers throughout the pandemic, even if their operations have been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to qualified employers, including for-profit services, tax-exempt companies, and specific governmental entities. To certify, companies should fulfill one of two criteria:.
The business operations were completely or partially suspended due to a government order related to COVID-19.
The business experienced a considerable decrease in gross receipts. As pointed out earlier, for 2021, a significant decrease is specified as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
Credit Quantity: 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 certified earnings paid to workers, including particular health insurance expenditures. 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 an Income Defense Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 permits services to declare the ERC even if they received a PPP loan. The same incomes can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and improved, allowing qualified employers to declare the credit for qualified incomes paid as far back as March 13, 2020. This retroactive provision offers a chance for companies to modify prior-year tax returns and get refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their work income tax return, generally Type 941. If the credit exceeds the amount of work taxes owed, the excess can be reimbursed to the employer.
It is necessary to note that the ERC provisions and eligibility criteria have developed in time. The best strategy is to talk to a tax professional or go to the main IRS site for the most detailed and up-to-date details relating to the ERC, including any current legal modifications or updates.
To qualify for the ERC, a business needs to satisfy one of the following requirements:.
The business operations were totally or partly suspended due to a federal government order related to COVID-19.
Business experienced a significant decline in gross receipts. For 2021, a significant decline is specified as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019, or a 20% decrease in gross receipts compared to the immediately preceding quarter.
The ERC is offered to companies of all sizes, consisting of tax-exempt companies, but there are some exceptions. Federal government entities and organizations that received a PPP loan may have limitations on declaring the credit.
The process for declaring the ERC involves finishing the necessary types and including the credit on your employment income tax return (generally Form 941). The exact time it requires to process the credit can differ based upon numerous elements, including the complexity of your business and the work of the internal revenue service. It’s recommended to consult with a tax professional for assistance particular to your situation.
There are several business that can help with the process of claiming the ERC. Some popular business that provide support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the details offered here is based on general knowledge and may not reflect the most current updates or changes to the ERC. It’s important to speak with a tax professional or check out the official internal revenue service website for the most precise and current information regarding eligibility, claiming procedures, and offered help.
Less than 100. If the employer had 100 or fewer workers typically in 2019, then the credit is based.
on salaries paid to all employees whether they really worked or not. Simply put, even if the.
staff members 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 workers on average in 2019, then the credit is.
allowed only for earnings paid to staff members who did not work during the calendar quarter.
In both cases, “wages” consists of not simply money payments but also a portion of the expense of employer.
offered healthcare. Is There Such A Thing As Employee Retention Credit
Employers can be immediately reimbursed for the credit by reducing the quantity of payroll taxes they.