Lets talk first about Kentucky Employee Retention Credit :
Our group here what do these people doing everybody in this space is helping teach people about ERC and uh always supply a lovely breakfast and have individuals actually learn about the program we need to head to the space where we are able to display a few of the checks that we are getting for business and I want to see that what is this this is uh numerous countless dollars literally Kevin hundreds of countless dollars so these are duplicate copies of the letters that go to clients confirming that the check is on the way I mean you understand if you simply begin to take a look at a few of these here I indicate this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I mean it’s just I imply think about 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
receive this you understand the check is chosen sure which’s when they pay so they don’t pay anything till they in fact receive the money they do not pay bottom line Wonder trust anything till this letter is verified the check is on the method they transfer it into their checking account and they can genuinely trust Wonder trust that the procedure has actually been completed and the number of you believe you’ve processed since you began this we’re about 35 000 of these for
about six billion dollars wow so plainly they know what they’re doing which’s what you require you require specialists 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 speaking about something actually essential today the employee retention credit which the majority of you have actually never heard of I definitely hadn’t heard of it up until very 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 have actually got the expert 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 difficult this isn’t like PPP we simply call up 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 us all 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 soon you got to discover all about it let’s talk employee retention credit Josh Fox what is an ERC let’s just start there so during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act provided organizations 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 huge difference right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the cash money payroll tax refund okay go on sorry I just need to make sure we got that point I imply that’s a big distinction a loan versus money money I like cash cash that’s what we’re speaking 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 initial cares Act is the ERC and yes Kevin it is a lovely tough check in the mail where you get actual money from the IRS all right so let’s speak about how it works since it sounds like to me if it’s a if it’s worker retention credit that person had to be an employee so I’m going to make the Presumption this cash is not for the owner not for people on the cap table not for shareholders it’s for workers right you had to have owned a company but it’s based upon you having W-2 employees in America not 10.99. As long as you had W-2 workers 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 very first six months of 2021 on the W-2 correct so there were six quarters the program was open well walk us through the six quarters so you had quarters 2 3 and 4 of 2020 and you had quarters one 2 and three of 2021. fine 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 employee that was on a W-2 in those 6 quarters so the estimation in 2020 to be specific Kevin is 50 of the employee’s salary to an optimum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers escalated to 70 of the staff member’s salary to a maximum of seven thousand per quarter how did that happen um they simply altered the rules in.
2021 versus because the turmoil 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 approximately five thousand Max and after that what happens 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 worker that is because that’s a lot of cash it is now there’s a caveat here the PPP money would need to be lowered 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 cash somewhere around 10 thousand dollars an individual so let’s state hypothetically you owned a restaurant in New York City where I’m from and you had a hundred workers 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 question is why does no one understand about this due to the fact that appearance when I initially became aware of this when I first satisfied Josh you know I have actually got lots of financial investments in great deals of business I’m a major supporter for entrepreneurship in America and make lots of lots of financial investments in business owners of which numerous suffered through the pandemic when I first became aware of this I called BS I don’t believe it due to the fact that 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 which were well been worthy of and we used them carefully to survive throughout the pandemic so when I heard about this I stated nah it can’t hold true but when I dug around I even called to my politician buddies Governor Senators they didn’t learn about it I indicate that’s how you know that’s how misinformation is that there’s no info out there then a bunch of people informed me well you can’t get it since you took the PPP likewise not real so let’s ask Josh why does nobody know about the staff member retention credit you understand what’s interesting you’re speaking about the banks Kevin since in the PPP loan process 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 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 simply procedure procedure that’s all um and here there was chaos because keep in mind in the initial cares act you might not do both programs so if you had done PPP you might 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 ever 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 companies yeah a few of them are doing it as a payroll business your accounting professional no your accountant’s never done this before unless you have an account that went into this service and bottom line my company Kevin has actually stayed in business since 2009 and we have actually been dealing with the federal government and the state government to recover money for Fortune 500 Fortune 1000 business so a great deal of our huge huge corporate customers have dealt with bottom line to recuperate other government programs we’ve done sales tax and use tax joblessness tax work chance tax credits research and development tax credits unclaimed home property tax all of these other federal government programs.
The worker retention tax credit is a broad based refundable tax credit developed to encourage.
companies to keep workers on their payroll. The credit is 50% of approximately $10,000 in incomes paid by an.
employer whose company is totally or partly suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is available to all companies no matter size including tax exempt companies. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) small.
services who take Small company Loans.
2. To qualify, the employer has to satisfy one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s business is fully or partially suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross receipts are listed below 50% of the comparable quarter in 2019. Once the.
company’s gross invoices exceed 80% of a similar quarter in 2019 they no longer certify.
after the end of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the certifying incomes paid up to $10,000 in total.
It is effective for incomes paid after March 13th and before December 31, 2020.
The definition of certifying wages differs by whether a company had, usually, more or less than.
100 workers in 2019.
Companies that specialize in ERC filing help normally supply proficiency and assistance to assist organizations browse the complex process of declaring the credit. They can offer numerous services, including:.
How is the employee retention credit calculated? Kentucky Employee Retention Credit
Eligibility Assessment: These companies will examine your company’s eligibility for the ERC based upon elements such as your market, profits, and operations. They can help determine if you meet the requirements for the credit and identify the optimum credit quantity you can claim.
Documentation and Estimation: ERC filing services will help in gathering the essential paperwork, such as payroll records and financial statements, to support your claim. They will also assist compute the credit amount based on qualified incomes and other certifying expenditures.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for prior quarters, these business can evaluate your previous payroll records and financials to identify potential chances for retroactive credits. They can assist you modify previous tax returns to declare these refunds.
Filing Help: Companies focusing on ERC filings will prepare and submit the necessary types and documentation on your behalf. This consists of completing Type 941 or any other necessary tax return.
Compliance and Updates: ERC guidelines and assistance have developed gradually. These business remain updated with the most recent modifications and guarantee that your filings abide by the most current standards. They can likewise provide continuous support if the IRS demands additional information or performs an audit related to your ERC claim.
It’s important to research and veterinarian any business offering ERC filing help to ensure their trustworthiness and expertise. Look for recognized firms with experience in tax and payroll services, or think about connecting to trusted accounting companies or tax experts who provide ERC submitting assistance.
Keep in mind that while these companies can provide valuable support, it’s always a good idea to have a standard understanding of the ERC requirements and procedure yourself. This will assist you make notified decisions and ensure precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief steps. The goal of the ERC is to motivate organizations to maintain and pay their employees throughout the pandemic, even if their operations have actually been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to eligible companies, including for-profit companies, tax-exempt organizations, and specific governmental entities. To certify, companies should satisfy one of two criteria:.
The business operations were completely or partially suspended due to a federal government order related to COVID-19.
Business experienced a substantial decline in gross receipts. As discussed previously, for 2021, a significant decrease 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% 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 Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit quantity is equal to a percentage (approximately 70%) of qualified incomes paid to staff members, consisting of 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, services that received an Income Security Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 allows organizations to claim the ERC even if they received a PPP loan. However, the same earnings can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and enhanced, allowing eligible companies to claim the credit for certified wages paid as far back as March 13, 2020. This retroactive arrangement provides an opportunity for companies to amend prior-year tax returns and get refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their work tax returns, usually Type 941. If the credit exceeds the amount of work taxes owed, the excess can be refunded to the employer.
It is necessary to note that the ERC provisions and eligibility requirements have evolved with time. The very best strategy is to talk to a tax professional or visit the official internal revenue service site for the most current and detailed information concerning the ERC, including any current legislative changes or updates.
To qualify for the ERC, an organization must meet one of the following criteria:.
Business operations were completely or partially suspended due to a government order related to COVID-19.
Business experienced a substantial decline in gross invoices. For 2021, a substantial decline is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
The ERC is offered to companies of all sizes, consisting of tax-exempt companies, however there are some exceptions. Federal government entities and services that received a PPP loan may have limitations on declaring the credit.
The process for claiming the ERC involves completing the necessary forms and consisting of the credit on your work income tax return (generally Type 941). The exact time it requires to process the credit can differ based on a number of factors, consisting of the complexity of your service and the workload of the IRS. It’s recommended to speak with a tax expert for guidance particular to your situation.
There are a number of companies that can help with the procedure of declaring the ERC. Some well-known business that provide support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the details offered here is based upon general understanding and may not reflect the most recent updates or changes to the ERC. It’s important to speak with a tax expert or check out the official IRS site for the most up-to-date and accurate info concerning eligibility, declaring treatments, and offered assistance.
Less than 100. If the employer had 100 or fewer employees typically in 2019, then the credit is based.
on salaries paid to all workers whether they in fact worked or not. Simply put, even if the.
workers worked full-time and got paid for full-time work, the company still gets the credit.
Greater than 100. If the company had more than 100 workers on average in 2019, then the credit is.
allowed just for salaries paid to staff members who did not work during the calendar quarter.
In both cases, “wages” consists of not just cash payments but likewise a portion of the cost of employer.
offered healthcare. Kentucky Employee Retention Credit
Employers can be instantly reimbursed for the credit by minimizing the quantity of payroll taxes they.