Lets talk first about Purpose Of Employee Retention Credit :
Our team here what do these men doing everyone in this room is helping teach individuals about ERC and uh always supply a stunning breakfast and have individuals really learn more about the program we need to head to the space where we are able to display some of the checks that we are getting for companies and I ‘d like to see that what is this this is uh hundreds of millions of dollars actually Kevin hundreds of countless dollars so these are duplicate copies of the letters that go to customers validating that the check is on the way I suggest you understand if you just start 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 party at the end when the check is validated the numbers are confirmed and the check is on the mail in the mail from the internal revenue service heading to the client so that’s how you’re able to track it you know when you
get this you understand the check is opted for sure which’s when they pay so they do not pay anything up until they in fact get the money 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 savings account and they can truly rely on Wonder trust that the procedure has actually been ended up and how many you think you’ve processed because you began this we’re about 35 000 of these for
about six billion dollars wow so clearly they understand what they’re doing which’s what you need you need 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 Terrific here you’re at my YouTube channel we’re talking about something really essential today the staff member retention credit which most of you have never ever heard of I certainly had not heard of it till extremely just recently and learned a lot about it because this is probably the most affordable expense of capital for any small company anywhere
anytime if you have employees 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 largest processor of these ERC credits this is a 170 page program so it’s hard this isn’t like PPP we simply call up your bank supervisor and state offer 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’ve ended up being yes the Ambassador and paid representative for this I like this program it’s disappearing very soon you got to find out 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 businesses 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone it makes a big difference right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
fix the cash cash payroll tax refund all right go on sorry I just have to make sure we got that point I mean that’s a huge distinction a loan versus cash money I like money money that’s what we’re discussing 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 initial cares Act is the ERC and yes Kevin it is a stunning tough check in the mail where you get real cash from the IRS all right so let’s speak about how it works because it sounds like to me if it’s a if it’s staff member retention credit that individual needed to be a staff member so I’m going to make the Assumption this money is not for the owner not for people on the cap table not for shareholders it’s for employees right you had to have actually owned a service however it’s based on you having W-2 workers 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 qualified 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 stroll us through the 6 quarters so you had quarters 2 3 and four of 2020 and you had quarters one two and three of 2021. all right so that’s how it’s determined you have to be on the W-2 throughout that duration now let’s talk my preferred part money how much can you get back per worker that was on a W-2 in those six quarters so the computation in 2020 to be exact Kevin is 50 of the employee’s income to a maximum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the worker’s wage to a maximum of 7 thousand per quarter how did that occur um they simply changed the rules in.
2021 versus because the chaos 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 as much as five thousand Max and after that what happens 21 000 Max in 2021 oh that’s how you create twenty 6 thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per employee that is since that’s a lot of money it is now there’s a caveat here the PPP money would have to be decreased 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 someplace around 10 thousand dollars an individual so let’s say 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 huge obviously now the huge question is why does nobody know about this due to the fact that look when I initially heard about this when I initially fulfilled Josh you know I’ve got lots of financial investments in great deals of companies I’m a major supporter for entrepreneurship in America and make numerous numerous financial investments in business owners of which numerous suffered through the pandemic when I initially found out about this I called BS I do not think it since 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 deserved and we used them sensibly to stay alive throughout the pandemic so when I heard about this I said nah it can’t be true but when I dug around I even contacted us to my politician friends Governor Senators they didn’t learn about it I indicate that’s how you know that’s how false information is that there’s no details out there then a lot of people informed me well you can’t get it due to the fact that you took the PPP also not true so let’s ask Josh why does nobody learn about the employee retention credit you know what’s fascinating you’re talking about the banks Kevin because in the PPP loan process the federal government made it very 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 procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply procedure process that’s all um and here there was mayhem because remember in the original cares act you could not do both programs so if you had done PPP you might not do ERC in the initial program and when they altered the law in 2021 the banks were refraining from doing ERC because 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 actually she or he’s never ever done it in the past do the banks do it nope the banks don’t do it the payroll companies yeah some of them are doing it as a payroll company your accountant no your accountant’s never done this prior to unless you have an account that went into this business and bottom line my firm Kevin has actually been in business considering that 2009 and we’ve been working with the federal government and the state government to recover money for Fortune 500 Fortune 1000 companies so a great deal of our huge huge business clients have worked with bottom line to recuperate other federal government programs we have actually done sales tax and use tax unemployment tax work chance tax credits research and development tax credits unclaimed property property tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit created to encourage.
companies to keep staff members on their payroll. The credit is 50% of up to $10,000 in earnings paid by an.
Because of COVID-19 or whose gross invoices, company whose organization is totally or partially suspended.
decrease by more than 50%.
1. The credit is available to all employers despite size consisting of tax exempt companies. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) little.
companies who take Small Business Loans.
2. To qualify, the employer has to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s organization is totally or partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross invoices are listed below 50% of the equivalent quarter in 2019. When the.
employer’s gross invoices go above 80% of an equivalent quarter in 2019 they no longer certify.
after completion of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the qualifying incomes paid up to $10,000 in overall.
It is effective for earnings paid after March 13th and prior to December 31, 2020.
The meaning of certifying wages varies by whether an employer had, typically, more or less than.
100 employees in 2019.
Business that concentrate on ERC filing support normally supply expertise and assistance to help organizations browse the complicated process of claiming the credit. They can provide numerous services, consisting of:.
How is the employee retention credit calculated? Purpose Of Employee Retention Credit
Eligibility Assessment: These companies will evaluate your business’s eligibility for the ERC based upon aspects such as your market, profits, and operations. If you fulfill the requirements for the credit and identify the optimum credit amount you can claim, they can help determine.
Documents and Calculation: ERC filing services will help in collecting the required documents, such as payroll records and monetary declarations, to support your claim. They will likewise assist calculate the credit amount based on qualified earnings and other qualifying expenses.
Retroactive Claim Review: If you are qualified to claim the ERC for previous quarters, these companies can evaluate your past payroll records and financials to recognize prospective opportunities for retroactive credits. They can assist you amend prior tax returns to declare these refunds.
Filing Support: Companies concentrating on ERC filings will prepare and submit the essential kinds and documents in your place. This consists of completing Type 941 or any other necessary tax return.
Compliance and Updates: ERC guidelines and guidance have actually progressed over time. These companies stay upgraded with the latest modifications and ensure that your filings adhere to the most current guidelines. If the IRS demands additional info or performs an audit related to your ERC claim, they can likewise offer continuous support.
It is very important to research and veterinarian any company using ERC filing help to guarantee their reliability and know-how. Try to find recognized companies with experience in tax and payroll services, or think about reaching out to relied on accounting companies or tax specialists who use ERC submitting assistance.
Remember that while these business can offer valuable assistance, it’s constantly a good concept to have a basic understanding of the ERC requirements and process yourself. This will assist you make notified choices and make sure precise filings.
The Staff Member 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 motivate companies to maintain and pay their staff members during the pandemic, even if their operations have been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to eligible companies, including for-profit businesses, tax-exempt organizations, and particular governmental entities. To qualify, companies should meet one of two requirements:.
The business operations were totally or partly suspended due to a government order related to COVID-19.
Business experienced a considerable decrease in gross invoices. As mentioned previously, for 2021, a considerable decrease is specified as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decrease 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.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount is equal to a percentage (approximately 70%) of qualified salaries paid to employees, including specific 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, businesses that got a Paycheck Protection Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 permits organizations to claim the ERC even if they received a PPP loan. The very same wages can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and boosted, permitting eligible employers to claim the credit for certified wages paid as far back as March 13, 2020. This retroactive arrangement provides a chance for businesses to change prior-year income tax return and get refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their employment tax returns, usually Kind 941. The excess can be refunded to the company if the credit exceeds the quantity of employment taxes owed.
It’s important to keep in mind that the ERC arrangements and eligibility criteria have developed in time. The very best course of action is to talk to a tax professional or go to the official IRS site for the most current and in-depth details concerning the ERC, including any current legislative modifications or updates.
To get approved for the ERC, a business needs to meet one of the following requirements:.
Business operations were completely or partially suspended due to a government order related to COVID-19.
The business experienced a substantial decline in gross invoices. For 2021, a significant decrease is defined as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a considerable decrease is specified as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the right away preceding quarter.
The ERC is offered to organizations of all sizes, including tax-exempt companies, however there are some exceptions. Federal government entities and services that got a PPP loan may have limitations on declaring the credit.
The process for claiming the ERC involves completing the essential kinds and consisting of the credit on your work income tax return (typically Form 941). The exact time it requires to process the credit can differ based upon numerous aspects, consisting of the intricacy of your service and the workload of the IRS. It’s recommended to talk to a tax expert for guidance particular to your circumstance.
There are a number of companies that can assist with the process of claiming the ERC. Some popular companies that offer support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the information offered here is based upon general understanding and may not reflect the most current updates or modifications to the ERC. It is necessary to speak with a tax expert or check out the main internal revenue service site for the most up-to-date and accurate details regarding eligibility, declaring procedures, and readily available help.
Less than 100. If the employer had 100 or less employees on average in 2019, then the credit is based.
on salaries 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 staff members on average in 2019.
enabled just for earnings paid to workers who did not work throughout the calendar quarter.
In both cases, “earnings” consists of not simply money payments but also a part of the cost of employer.
supplied health care. Purpose Of Employee Retention Credit
Companies can be instantly compensated for the credit by minimizing the quantity of payroll taxes they.