Lets talk first about Partial Shutdown Employee Retention Credit :
Our team here what do these people doing everyone in this room is helping teach people about ERC and uh always supply a lovely breakfast and have people actually learn about the program we ought to head to the space 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 clients validating that the check is on the method I imply you understand if you just begin to take a look at some of these here I mean this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I imply it’s just I suggest 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 validated the numbers are verified and the check is on the mail in the mail from the IRS heading to the customer so that’s how you have the ability to track it you know when you
get this you know the check is gone for sure and that’s when they pay so they don’t pay anything till they actually receive the cash they do not pay bottom line Wonder trust anything till this letter is verified the check is on the method they deposit 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 believe you’ve processed since you began this we have to do with 35 000 of these for
about six billion dollars wow so plainly they know what they’re doing and that’s what you require you need 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 Fantastic here you’re at my YouTube channel we’re speaking about something really essential today the staff member retention credit which most of you have actually never heard of I definitely hadn’t become aware of it till extremely recently and learned a lot about it due to the fact that this is most likely the lowest cost of capital for any small company anywhere
anytime if you have workers between five and five hundred so I’ve got the specialist 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 just phone your bank manager and say give me a loan it does not 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’ve ended up being yes the Ambassador and paid spokesperson for this I enjoy this program it’s going away very soon you got to find out everything about it let’s talk worker retention credit Josh Fox what is an ERC let’s simply begin there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act used organizations 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 huge distinction right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
remedy the cash money payroll tax refund all right go on sorry I just have to make sure we got that point I suggest that’s a big difference a loan versus cash money I like money money that’s what we’re talking about okay 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 stunning tough check in the mail where you get actual cash from the internal revenue service all right so let’s speak about how it works because it seems like to me if it’s a if it’s employee retention credit that individual had to be an employee so I’m going to make the Assumption this money is not for the owner not for individuals on the cap table not for shareholders it’s for staff members right you had to have actually owned a business but it’s based on you having W-2 workers 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 eligible so you have to be on payroll in 2020 on the W-2 and you need to be on payroll for the very first 6 months of 2021 on the W-2 appropriate so there were six quarters the program was open well stroll us through the six quarters so you had quarters two three and four 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 period now let’s talk my preferred part cash just how much can you return per staff member that was on a W-2 in those six quarters so the calculation in 2020 to be specific Kevin is 50 of the worker’s income to an optimum of 5 thousand dollars per staff member for the year of 2020 and in 2021 the numbers escalated to 70 of the worker’s wage to an optimum of 7 thousand per quarter how did that take place um they just changed the rules in.
2021 versus because the turmoil of the pandemic so they wanted to even get more to keep those workers 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 after that what occurs 21 000 Max in 2021 oh that’s how you develop twenty 6 thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty six thousand dollars per worker that is since that’s a great deal of money it is now there’s a caveat here the PPP money would need to be reduced from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would lower the 26 000 so what we’re seeing typically Kevin is if you took PPP money someplace around 10 thousand dollars an individual so let’s state hypothetically you owned a dining establishment 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 substantial clearly now the big question is why does nobody learn about this since appearance when I initially found out about this when I first satisfied Josh you understand I have actually got great deals of investments in great deals of companies I’m a significant supporter for entrepreneurship in America and make lots of numerous financial investments in entrepreneurs of which numerous suffered through the pandemic when I first heard about this I called BS I do not think it since 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 been worthy of and we used them carefully to survive throughout the pandemic so when I found out about this I said nah it can’t hold true however when I dug around I even called to my political leader pals Governor Senators they didn’t know about it I imply that’s how you know that’s how misinformation is that there’s no details out there then a bunch of people informed me well you can’t get it because you took the PPP likewise not real so let’s ask Josh why does no one understand about the employee retention credit you know what’s fascinating you’re discussing the banks Kevin because in the PPP loan procedure 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 country and they would process process 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 turmoil since remember in the initial cares act you might refrain from doing both programs so if you had actually done PPP you might not do ERC in the original 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 anybody about how to.
do this does your CFO know how to do this not really she or he’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 company your accountant no your accounting professional’s never ever done this before unless you have an account that went into this business and bottom line my firm Kevin has been in business considering that 2009 and we have actually been dealing with the federal government and the state federal government to recover cash for Fortune 500 Fortune 1000 companies so a great deal of our big big business customers have dealt with bottom line to recover other federal government programs we have actually done sales tax and use tax joblessness tax work chance tax credits research and development tax credits unclaimed home real estate tax all of these other federal government programs.
The staff member retention tax credit is a broad based refundable tax credit created to motivate.
companies to keep staff members on their payroll. The credit is 50% of as much as $10,000 in wages paid by an.
Since of COVID-19 or whose gross invoices, employer whose business is fully or partly suspended.
decline by more than 50%.
1. The credit is available to all employers despite size consisting of tax exempt organizations. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
businesses who take Small Business Loans.
2. To certify, the company needs to meet one of two alternative tests. The tests are computed 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 similar quarter in 2019. As soon as the.
company’s gross receipts go above 80% of an equivalent quarter in 2019 they no longer qualify.
after completion of that quarter.
Computation of the Credit.
The quantity of the credit is 50% of the certifying salaries paid up to $10,000 in overall.
It works for earnings paid after March 13th and before December 31, 2020.
The meaning of certifying earnings varies by whether an employer had, typically, basically than.
100 staff members in 2019.
Business that concentrate on ERC filing support usually supply proficiency and support to help services navigate the intricate procedure of claiming the credit. They can provide different services, consisting of:.
How is the employee retention credit calculated? Partial Shutdown Employee Retention Credit
Eligibility Assessment: These business will examine your service’s eligibility for the ERC based upon factors such as your industry, revenue, and operations. They can help identify if you fulfill the requirements for the credit and identify the maximum credit amount you can claim.
Documents and Computation: ERC filing services will assist in gathering the needed documents, such as payroll records and monetary declarations, to support your claim. They will likewise assist determine the credit quantity based on eligible wages and other qualifying costs.
Retroactive Claim Review: If you are eligible to claim the ERC for previous quarters, these business can evaluate your previous payroll records and financials to recognize possible opportunities for retroactive credits. They can assist you modify previous tax returns to declare these refunds.
Filing Support: Companies focusing on ERC filings will prepare and send the needed forms and documents in your place. This includes finishing Form 941 or any other necessary tax return.
Compliance and Updates: ERC regulations and assistance have actually progressed in time. These companies remain updated with the latest changes and make sure that your filings adhere to the most present guidelines. If the Internal revenue service demands additional info or conducts an audit associated to your ERC claim, they can also provide ongoing support.
It’s important to research and veterinarian any business using ERC filing assistance to ensure their credibility and competence. Look for established firms with experience in tax and payroll services, or think about connecting to trusted accounting companies or tax specialists who use ERC submitting support.
Remember that while these business can supply valuable help, it’s always an excellent idea to have a basic understanding of the ERC requirements and process yourself. This will help you make notified choices and guarantee precise filings.
The Worker Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief procedures. The objective of the ERC is to motivate businesses to keep and pay their employees during the pandemic, even if their operations have actually been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to qualified companies, including for-profit businesses, tax-exempt organizations, and particular governmental entities. To qualify, employers should fulfill one of two requirements:.
The business operations were totally or partly suspended due to a government order related to COVID-19.
The business experienced a substantial decline in gross receipts. As discussed earlier, for 2021, a considerable decline is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a substantial decrease is specified as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross receipts 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 quantity is equal to a portion (up to 70%) of certified salaries paid to employees, consisting of particular 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: At first, services that received an Income Security Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 permits businesses to declare the ERC even if they received a PPP loan. The very same incomes can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively broadened and enhanced, allowing qualified employers to claim the credit for certified wages paid as far back as March 13, 2020. This retroactive arrangement supplies an opportunity for organizations to modify prior-year income tax return and receive refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their work tax returns, typically Kind 941. The excess can be refunded to the employer if the credit exceeds the amount of work taxes owed.
It is very important to note that the ERC provisions and eligibility requirements have actually progressed over time. The very best strategy is to consult with a tax professional or go to the main IRS site for the most updated and comprehensive details regarding the ERC, including any current legal changes or updates.
To receive the ERC, a service must fulfill among the following criteria:.
The business operations were fully or partially suspended due to a federal government order related to COVID-19.
Business experienced a substantial decrease in gross receipts. 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 substantial decrease is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decline in gross invoices compared to the immediately preceding quarter.
The ERC is offered to businesses of all sizes, including tax-exempt organizations, however there are some exceptions. For instance, government entities and businesses that received a PPP loan might have constraints on declaring the credit.
The procedure for declaring the ERC includes finishing the needed types and consisting of the credit on your employment income tax return (generally Type 941). The exact time it takes to process the credit can differ based on numerous factors, consisting of the intricacy of your company and the workload of the IRS. It’s recommended to consult with a tax expert for guidance specific to your circumstance.
There are a number of companies that can assist with the process of declaring the ERC. Some popular companies that offer support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the details supplied here is based upon general knowledge and might not reflect the most current updates or modifications to the ERC. It is very important to consult with a tax professional or visit the main internal revenue service site for the most up-to-date and precise info relating to eligibility, claiming treatments, and available support.
Less than 100. If the company had 100 or fewer workers usually in 2019, then the credit is based.
on salaries paid to all employees whether they really worked or not. Simply put, even if the.
employees 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 workers on average in 2019.
allowed just for salaries paid to workers who did not work throughout the calendar quarter.
In both cases, “salaries” includes not simply money payments but likewise a portion of the expense of company.
supplied healthcare. Partial Shutdown Employee Retention Credit
Companies can be right away repaid for the credit by lowering the amount of payroll taxes they.