Lets talk first about Nonrefundable Vs Refundable Employee Retention Credit :
Our group here what do these guys doing everybody in this space is helping teach people about ERC and uh always offer a beautiful breakfast and have people truly learn about the program we must head to the space where we are able to show some of the checks that we are getting for business and I ‘d like to see that what is this this is uh hundreds of millions of dollars literally Kevin numerous countless dollars so these are duplicate copies of the letters that go to customers confirming that the check is on the way I mean you know if you just begin to take a 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 imply think about the number of real customers that went through the program yeah this is the very end this is the party at the end when the check is confirmed the numbers are validated 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 know when you
get this you know the check is opted for sure which’s when they pay so they don’t pay anything till they really get the money they don’t pay bottom line Wonder trust anything until this letter is validated the check is on the way they transfer it into their bank account and they can truly rely on Wonder trust that the process has actually been completed and the number of you think you’ve processed considering that you began this we’re about 35 000 of these for
about 6 billion dollars wow so plainly they understand what they’re doing and that’s what you need you require 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 Terrific here you’re at my YouTube channel we’re talking about something truly crucial today the staff member retention credit which the majority of you have never ever heard of I definitely hadn’t heard of it till really just recently and learned a lot about it due to the fact that this is probably the lowest expense of capital for any small business anywhere
anytime if you have staff members between 5 and five hundred so I have actually got the expert with me this is Josh Fox he’s the founder and CEO of bottom line Principles they’re the largest processor of these ERC credits this is a 170 page program so it’s hard this isn’t like PPP we just phone your bank manager and say provide me a loan it doesn’t 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 enjoy this program it’s going away very soon you got to learn everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply begin there so throughout the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act offered companies 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everybody it makes a big distinction right there two 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 okay go on sorry I just need to make sure we got that point I indicate that’s a big distinction a loan versus cash cash I like cash cash that’s what we’re discussing 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 gorgeous difficult check in the mail where you get actual cash from the IRS all right so let’s talk about how it works because it seems like to me if it’s a if it’s staff member retention credit that individual needed 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 workers right you needed to have actually 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 need to be on payroll for the very first six months of 2021 on the W-2 proper so there were 6 quarters the program was open well stroll us through the 6 quarters so you had quarters 2 three and 4 of 2020 and you had quarters one two and 3 of 2021. okay so that’s how it’s determined you need to be on the W-2 throughout that duration now let’s talk my favorite part cash just how much can you get back per worker that was on a W-2 in those 6 quarters so the calculation in 2020 to be exact Kevin is 50 of the staff member’s salary to an optimum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s salary to a maximum of seven thousand per quarter how did that take place um they just changed the rules in.
2021 versus since the chaos of the pandemic so they wanted to even get more to keep those employees on payroll 100 so if you can get 5 000 per person Max in twenty that was 50 in 2020 up to five thousand Max and then what occurs 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 since that’s a great deal of cash it is now there’s a caution here the PPP cash would have to be decreased from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would minimize the 26 000 so what we’re seeing usually Kevin is if you took PPP cash someplace around 10 thousand dollars an individual so let’s state 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 money you would still get a million dollar in the mail from the internal revenue service so it’s big clearly now the big concern is why does nobody understand about this because appearance when I first became aware of this when I initially fulfilled Josh you know I have actually got lots of investments in lots of companies I’m a significant advocate for entrepreneurship in America and make lots of lots of financial investments in business owners of which many suffered through the pandemic when I first found out 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 used them sensibly to stay alive throughout the pandemic so when I heard about this I said nah it can’t hold true however when I dug around I even called to my politician pals Guv Senators they didn’t learn about it I mean that’s how you understand that’s how misinformation 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 real so let’s ask Josh why does nobody understand about the worker retention credit you understand what’s intriguing you’re speaking about 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 process 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 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 not do ERC in the original program and when they altered the law in 2021 the banks were not doing ERC because it’s not alone so you’re getting a tax refund so the federal government never made it clear to anyone about how to.
do this does your CFO understand how to do this not truly she or he’s never done it before 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 ever done this before unless you have an account that went into this business and bottom line my company Kevin has been 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 lot of our huge big corporate clients have actually worked with bottom line to recuperate other government programs we have actually done sales tax and use tax unemployment tax work opportunity 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 developed to motivate.
companies to keep employees on their payroll. The credit is 50% of up to $10,000 in incomes paid by an.
Since of COVID-19 or whose gross invoices, employer whose company is fully or partly suspended.
decline by more than 50%.
1. The credit is available to all employers despite size consisting of tax exempt companies. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) little.
organizations who take Small Business Loans.
2. To qualify, the employer has to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s business is completely 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.
employer’s gross receipts go above 80% of an equivalent quarter in 2019 they no longer certify.
after completion of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the qualifying salaries paid up to $10,000 in overall.
It works for earnings paid after March 13th and before December 31, 2020.
The definition of qualifying salaries differs by whether a company had, on average, more or less than.
100 employees in 2019.
Business that specialize in ERC filing support generally supply proficiency and support to assist companies navigate the complex process of claiming the credit. They can use numerous services, consisting of:.
How is the employee retention credit calculated? Nonrefundable Vs Refundable Employee Retention Credit
Eligibility Evaluation: These companies will examine your service’s eligibility for the ERC based upon aspects such as your industry, revenue, and operations. They can assist identify if you satisfy the requirements for the credit and identify the optimum credit amount you can claim.
Documentation and Computation: 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 calculate the credit amount based upon qualified incomes and other certifying costs.
Retroactive Claim Evaluation: If you are eligible to claim the ERC for prior quarters, these companies can evaluate your past payroll records and financials to identify possible chances for retroactive credits. They can assist you amend previous income tax return to claim these refunds.
Filing Support: Business focusing on ERC filings will prepare and send the essential types and documents in your place. This consists of finishing Form 941 or any other necessary tax return.
Compliance and Updates: ERC guidelines and guidance have actually evolved over time. These business stay updated with the most recent modifications and make sure that your filings comply with the most existing standards. If the IRS demands additional details or carries out an audit associated to your ERC claim, they can also offer ongoing support.
It is essential to research and vet any business using ERC filing support to ensure their trustworthiness and know-how. Look for established firms with experience in tax and payroll services, or consider connecting to trusted accounting firms or tax specialists who provide ERC submitting assistance.
Bear in mind that while these companies can provide valuable assistance, it’s always an excellent concept to have a standard understanding of the ERC requirements and process yourself. This will help you make notified decisions and ensure precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief measures. The objective of the ERC is to encourage organizations to maintain and pay their employees during the pandemic, even if their operations have actually been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to qualified companies, including for-profit services, tax-exempt organizations, and particular governmental entities. To qualify, companies need to satisfy one of two requirements:.
The business operations were totally or partially suspended due to a government order related to COVID-19.
Business experienced a substantial decrease in gross invoices. As mentioned earlier, for 2021, a considerable decrease 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 specified as a 20% decline in gross invoices compared to the very same quarter in 2019, or a 20% decrease in gross invoices compared to the right away preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount amounts to a percentage (approximately 70%) of qualified earnings paid to workers, consisting of specific health plan costs. The optimum credit per employee 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 Security Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 permits companies to declare the ERC even if they received a PPP loan. The same salaries can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and enhanced, enabling qualified employers to declare the credit for qualified earnings paid as far back as March 13, 2020. This retroactive provision offers a chance for businesses to modify prior-year income tax return and get refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their work tax returns, normally Form 941. The excess can be refunded to the company if the credit exceeds the amount of work taxes owed.
It is essential to note that the ERC arrangements and eligibility criteria have evolved in time. The best course of action is to speak with a tax professional or visit the official internal revenue service site for the most updated and comprehensive details concerning the ERC, including any current legal changes or updates.
To qualify for the ERC, a service must meet among the following criteria:.
Business operations were completely or partially suspended due to a federal government order related to COVID-19.
Business experienced a considerable decline in gross receipts. For 2021, a considerable decrease is defined as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a substantial decline is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross invoices compared to the right away preceding quarter.
The ERC is readily available to companies of all sizes, consisting of tax-exempt companies, but there are some exceptions. For instance, federal government entities and companies that got a PPP loan may have limitations on declaring the credit.
The procedure for declaring the ERC includes finishing the necessary kinds and consisting of the credit on your work tax return (generally Kind 941). The exact time it requires to process the credit can differ based on a number of aspects, including the complexity of your company and the work of the internal revenue service. It’s advised to consult with a tax expert for assistance particular to your scenario.
There are a number of companies that can assist with the process of declaring the ERC. These consist of accounting companies, tax advisory services, and payroll company. Some popular companies that use assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research study and contact these companies directly to ask about their services and fees.
Please note that the information offered here is based on basic understanding and might not reflect the most recent updates or changes to the ERC. It is necessary to seek advice from a tax professional or go to the main internal revenue service site for the most precise and current info relating to eligibility, declaring treatments, and offered assistance.
Less than 100. If the company had 100 or fewer workers typically in 2019, then the credit is based.
on earnings paid to all employees whether they actually worked or not. To put it simply, even if the.
employees worked full time and got paid for full-time work, the company still gets the credit.
Greater than 100. The credit is if the employer had more than 100 workers on average in 2019.
allowed only for salaries paid to workers who did not work throughout the calendar quarter.
In both cases, “earnings” includes not simply cash payments but also a portion of the expense of employer.
offered healthcare. Nonrefundable Vs Refundable Employee Retention Credit
Companies can be immediately compensated for the credit by decreasing the amount of payroll taxes they.