Lets talk first about Pay Income Tax On Employee Retention Credit :
Our team here what do these guys doing everyone in this room is assisting teach people about ERC and uh constantly offer a beautiful breakfast and have individuals truly discover the program we should head to the room 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 replicate copies of the letters that go to customers confirming that the check is on the method I imply you understand if you just begin to take a 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 mean think about how many 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 validated and the check is on the mail in the mail from the internal revenue service heading to the client so that’s how you have the ability to track it you know when you
get this you understand the check is opted for sure and that’s when they pay so they do not pay anything until they really get the cash they do not pay bottom line Wonder trust anything until this letter is validated the check is on the method they deposit it into their savings account and they can truly trust Wonder trust that the process has been finished and the number of you believe you’ve processed considering that you began this we’re about 35 000 of these for
about six billion dollars wow so clearly they know what they’re doing and that’s what you need 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 speaking about something truly important today the worker retention credit which the majority of you have never become aware of I certainly hadn’t heard of it until extremely recently and learned a lot about it due to the fact that this is most likely the most affordable cost of capital for any small business anywhere
anytime if you have workers between 5 and five hundred so I’ve got the expert with me this is Josh Fox he’s the founder 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 your bank supervisor and say give me a loan it doesn’t 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 become yes the Ambassador and paid spokesperson for this I enjoy this program it’s disappearing soon you got to learn everything about it let’s talk worker retention credit Josh Fox what is an ERC let’s simply start there so throughout the Trump Administration when President Trump was enacted they developed 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 nearly everybody 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.
fix the money money payroll tax refund okay go on sorry I simply need to make sure we got that point I indicate that’s a huge distinction a loan versus money cash I like cash cash that’s what we’re speaking about alright 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 money from the internal revenue service all right so let’s talk about how it works because it seems 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 employees right you needed to have owned a business but it’s based upon you having W-2 workers in America not 10.99. As long as you had W-2 staff members 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 right so there were six quarters the program was open well walk us through the six quarters so you had quarters 2 three and 4 of 2020 and you had quarters one two and 3 of 2021. fine so that’s how it’s measured you need to be on the W-2 during that period now let’s talk my favorite part cash just how much can you return per worker that was on a W-2 in those six quarters so the calculation in 2020 to be specific Kevin is 50 of the staff member’s wage to an optimum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s salary to an optimum of 7 thousand per quarter how did that happen um they just changed the rules in.
2021 versus due to the fact that the turmoil 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 5 thousand Max and after that what happens 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 lot of money it is now there’s a caution here the PPP money would have to be lowered from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would minimize the 26 000 so what we’re seeing on average Kevin is if you took PPP money somewhere around 10 thousand dollars an individual 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 substantial certainly now the huge question is why does nobody learn about this since appearance when I first found out about this when I initially met Josh you understand I’ve got lots of financial investments in great deals of business I’m a major advocate for entrepreneurship in America and make many many investments in business owners of which many suffered through the pandemic when I first became aware of this I called BS I don’t think it due to the fact that I use the PPP we went through the money center Banks to get it it was extremely 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 found out about this I stated nah it can’t hold true but when I dug around I even called to my politician good friends Governor Senators they didn’t know about it I indicate 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 because you took the PPP also not true so let’s ask Josh why does nobody know about the employee retention credit you understand what’s fascinating you’re talking about the banks Kevin because in the PPP loan procedure the federal government made it really clear that if you wanted a PPP loan you would call Wells Fargo Citibank Bank of America any of the big banks in our country and they would process procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply process procedure that’s all um and here there was chaos due to the fact that remember in the original cares act you might refrain from doing both programs so if you had actually done PPP you could 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 government never made it clear to any person about how to.
do this does your CFO know how to do this not really he or she’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 done this before unless you have an account that entered into this service and bottom line my company Kevin has been in business considering that 2009 and we have actually been working with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 business so a lot of our huge huge business clients have actually dealt with bottom line to recover other government programs we’ve done sales tax and utilize tax unemployment tax work chance tax credits research and development tax credits unclaimed home real estate tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit created to encourage.
employers to keep workers on their payroll. The credit is 50% of up to $10,000 in wages paid by an.
Since of COVID-19 or whose gross invoices, company whose service is fully or partly suspended.
decrease by more than 50%.
Schedule.
1. The credit is offered to all companies regardless of size consisting of tax exempt companies. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
companies who take Small company Loans.
2. To certify, the company needs to fulfill one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s business is totally or partially 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 exceed 80% of a similar quarter in 2019 they no longer qualify.
after the end of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the qualifying earnings paid up to $10,000 in total.
It works for earnings paid after March 13th and prior to December 31, 2020.
The meaning of qualifying incomes varies by whether a company had, usually, basically than.
100 staff members in 2019.
Companies that focus on ERC filing assistance usually offer competence and assistance to assist companies navigate the complex procedure of claiming the credit. They can provide different services, including:.
How is the employee retention credit calculated? Pay Income Tax On Employee Retention Credit
Eligibility Evaluation: These companies will assess your organization’s eligibility for the ERC based on factors such as your market, profits, and operations. They can help figure out if you fulfill the requirements for the credit and recognize the optimum credit quantity you can claim.
Documentation and Estimation: ERC filing services will help in gathering the needed documents, such as payroll records and monetary declarations, to support your claim. They will also assist calculate the credit quantity based on qualified earnings and other certifying expenses.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for previous quarters, these companies can review your past payroll records and financials to recognize possible chances for retroactive credits. They can help you change previous income tax return to declare these refunds.
Filing Assistance: Business concentrating on ERC filings will prepare and submit the necessary kinds and documentation on your behalf. This includes finishing Type 941 or any other necessary tax forms.
Compliance and Updates: ERC policies and guidance have actually evolved in time. These companies stay updated with the current changes and ensure that your filings adhere to the most present guidelines. They can also provide ongoing assistance if the internal revenue service demands extra info or carries out an audit related to your ERC claim.
It is very important to research and veterinarian any company using ERC filing assistance to guarantee their credibility and expertise. Try to find recognized companies with experience in tax and payroll services, or consider connecting to trusted accounting firms or tax professionals who provide ERC submitting support.
Remember that while these business can supply important assistance, it’s always an excellent idea to have a standard understanding of the ERC requirements and process yourself. This will assist you make informed choices 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 goal of the ERC is to motivate businesses to keep and pay their workers throughout the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to eligible companies, consisting of for-profit services, tax-exempt organizations, and particular governmental entities. To certify, employers must meet one of two criteria:.
The business operations were fully or partially suspended due to a government order related to COVID-19.
Business experienced a considerable decrease in gross invoices. As discussed earlier, for 2021, a substantial 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 same quarter in 2019, or a 20% decline in gross receipts compared to the immediately 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 percentage (as much as 70%) of certified incomes paid to staff members, including certain health plan expenditures. The maximum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, services that got a Paycheck Defense Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 allows organizations to declare the ERC even if they received a PPP loan. The very same salaries can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and boosted, permitting eligible companies to claim the credit for qualified wages paid as far back as March 13, 2020. This retroactive provision offers a chance for services to change prior-year tax returns and receive refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their employment income tax return, normally Type 941. If the credit goes beyond the amount of work taxes owed, the excess can be reimbursed to the employer.
It’s important to note that the ERC arrangements and eligibility requirements have actually developed gradually. The best course of action is to consult with a tax expert or visit the official IRS website for the most updated and comprehensive information relating to the ERC, including any current legal changes or updates.
To get approved for the ERC, a business should satisfy among the following requirements:.
The business operations were totally or partially suspended due to a government order related to COVID-19.
The business experienced a substantial decrease 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 decline is specified as a 20% decline in gross invoices compared to the very same quarter in 2019, or a 20% decline in gross receipts compared to the right away preceding quarter.
The ERC is offered to companies of all sizes, including tax-exempt companies, however there are some exceptions. For instance, federal government entities and businesses that got a PPP loan might have restrictions on declaring the credit.
The process for declaring the ERC includes completing the necessary forms and consisting of the credit on your work income tax return (normally Form 941). The exact time it takes to process the credit can vary based upon a number of aspects, consisting of the complexity of your company and the workload of the internal revenue service. It’s recommended to consult with a tax professional for assistance specific to your scenario.
There are several business that can assist with the procedure of claiming the ERC. These include accounting companies, tax advisory services, and payroll company. Some popular business that use assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research and call these business straight to inquire about their charges and services.
Please note that the information supplied here is based on general understanding and may not show the most current updates or modifications to the ERC. It is necessary to talk to a tax expert or visit the official internal revenue service website for the most updated and precise details concerning eligibility, claiming treatments, and offered support.
Less than 100. The credit is based if the company had 100 or fewer staff members on average in 2019.
on incomes paid to all staff members whether they really worked or not. In other words, 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 staff members on average in 2019.
allowed just for wages paid to workers who did not work throughout the calendar quarter.
In both cases, “wages” includes not simply money payments but likewise a part of the cost of company.
offered healthcare. Pay Income Tax On Employee Retention Credit
Payment.
Employers can be right away compensated for the credit by reducing the quantity of payroll taxes they.