Lets talk first about Q3 Employee Retention Credit :
Our group here what do these people doing everybody in this space is helping teach individuals about ERC and uh always provide a lovely breakfast and have individuals really learn about the program we must head to the room where we are able to show a few of the checks that we are getting for companies and I ‘d like to see that what is this this is uh numerous millions of dollars actually Kevin hundreds of millions of dollars so these are duplicate copies of the letters that go to customers validating that the check is on the method I imply you understand if you just begin to look at some of these here I imply this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s just I indicate think of how many real customers 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 confirmed and the check is on the mail in the mail from the IRS heading to the client so that’s how you’re able to track it you understand when you
receive this you understand the check is opted for sure which’s when they pay so they don’t pay anything till they in fact get the money they don’t pay bottom line Wonder trust anything until this letter is confirmed the check is on the method they transfer it into their savings account and they can really trust Wonder trust that the process has been finished and the number of you believe you’ve processed considering that you began this we have to do with 35 000 of these for
about 6 billion dollars wow so clearly they understand 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 Terrific here you’re at my YouTube channel we’re speaking about something truly crucial today the staff member retention credit which most of you have never become aware of I definitely hadn’t become aware of it up until extremely just recently and learned a lot about it because this is probably the lowest expense of capital for any small company anywhere
anytime if you have employees between five 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 Ideas 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 contact your bank manager and say offer me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to inform all of us about it and how to get it and why I have actually ended up being yes the Ambassador and paid representative for this I love this program it’s going away very soon you got to find out everything about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply start there so throughout the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act used businesses three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone it makes a huge difference 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 alright go on sorry I simply need to make certain we got that point I mean that’s a huge difference a loan versus money cash I like cash money that’s what we’re discussing 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 original cares Act is the ERC and yes Kevin it is a beautiful hard check in the mail where you get actual money from the IRS 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 person had to be an employee so I’m going to make the Presumption this cash is not for the owner not for individuals on the cap table not for shareholders it’s for staff members right you needed to have actually 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 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 first six months of 2021 on the W-2 appropriate so there were six quarters the program was open well walk us through the 6 quarters so you had quarters two 3 and four of 2020 and you had quarters one two and three of 2021. fine so that’s how it’s measured you have to be on the W-2 during that duration now let’s talk my favorite part cash how much can you return per staff member that was on a W-2 in those 6 quarters so the calculation in 2020 to be exact Kevin is 50 of the worker’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 staff member’s wage to an optimum of seven thousand per quarter how did that occur um they simply changed the rules in.
2021 versus due to the fact that the chaos of the pandemic so they wished 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 approximately 5 thousand Max and after that what takes place 21 000 Max in 2021 oh that’s how you create twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty 6 thousand dollars per staff member that is because that’s a lot of cash it is now there’s a caveat here the PPP money would have to be minimized from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would reduce the 26 000 so what we’re seeing usually Kevin is if you took PPP money someplace around ten thousand dollars a person so let’s say 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 internal revenue service so it’s substantial obviously now the big question is why does no one understand about this because appearance when I first found out about this when I first fulfilled Josh you understand I’ve got great deals of financial investments in great deals of companies I’m a major advocate for entrepreneurship in America and make many numerous financial investments in entrepreneurs of which many suffered through the pandemic when I initially heard about this I called BS I don’t think it since 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 which were well should have and we utilized them wisely to survive during the pandemic so when I became aware of this I said nah it can’t be true however when I dug around I even contacted us to my politician pals Governor Senators they didn’t learn about it I imply that’s how you know that’s how misinformation is that there’s no information out there then a lot of people told me well you can’t get it due to the fact that you took the PPP likewise not true so let’s ask Josh why does no one understand about the worker retention credit you understand what’s fascinating you’re discussing the banks Kevin due to the fact that 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 procedure that’s all um and here there was turmoil due to the fact that remember in the initial cares act you might not do both programs so if you had done PPP you could not do ERC in the initial program and when they altered the law in 2021 the banks were refraining from doing ERC due to the fact that it’s not alone so you’re getting a tax refund so the government never made it clear to anyone about how to.
do this does your CFO know how to do this not actually she or he’s never done it previously do the banks do it nope the banks do not do it the payroll companies yeah some of them are doing it as a payroll business your accounting professional no your accountant’s never ever done this prior to unless you have an account that entered into this company and bottom line my company Kevin has been in business given that 2009 and we’ve been working with the federal government and the state federal government to recuperate cash for Fortune 500 Fortune 1000 business so a lot 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 opportunity tax credits research and development tax credits unclaimed property property tax all of these other government programs.
The staff member retention tax credit is a broad based refundable tax credit created to motivate.
companies to keep workers on their payroll. The credit is 50% of up to $10,000 in earnings paid by an.
employer whose service is totally or partly suspended because of COVID-19 or whose gross receipts.
decrease 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) little.
businesses who take Small company Loans.
2. To qualify, the company needs to meet one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s organization is completely or partially suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross invoices are listed below 50% of the similar quarter in 2019. As soon as the.
company’s gross invoices exceed 80% of a comparable quarter in 2019 they no longer qualify.
after completion of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the qualifying incomes paid up to $10,000 in total.
It is effective for earnings paid after March 13th and before December 31, 2020.
The meaning of certifying incomes differs by whether a company had, usually, basically than.
100 workers in 2019.
Companies that specialize in ERC filing support normally offer expertise and assistance to help organizations navigate the complicated procedure of claiming the credit. They can offer various services, including:.
How is the employee retention credit calculated? Q3 Employee Retention Credit
Eligibility Assessment: These companies will evaluate your organization’s eligibility for the ERC based upon aspects such as your market, income, and operations. They can assist identify if you satisfy the requirements for the credit and identify the optimum credit quantity you can declare.
Paperwork and Estimation: ERC filing services will assist in collecting the essential paperwork, such as payroll records and financial declarations, to support your claim. They will likewise assist determine the credit amount based upon eligible earnings and other certifying expenses.
Retroactive Claim Evaluation: If you are eligible to claim the ERC for previous quarters, these business can evaluate your previous payroll records and financials to identify prospective opportunities for retroactive credits. They can assist you amend previous tax returns to claim these refunds.
Filing Support: Companies concentrating on ERC filings will prepare and send the essential forms and documentation on your behalf. This includes completing Type 941 or any other necessary tax return.
Compliance and Updates: ERC guidelines and guidance have actually progressed in time. These business remain upgraded with the latest changes and make sure that your filings adhere to the most current standards. They can likewise provide ongoing support if the IRS demands additional details or performs an audit related to your ERC claim.
It is essential to research and veterinarian any company offering ERC filing support to ensure their trustworthiness and competence. Search for recognized companies with experience in tax and payroll services, or think about reaching out to trusted accounting companies or tax professionals who offer ERC submitting assistance.
Bear in mind that while these business can supply important assistance, it’s constantly an excellent concept to have a basic understanding of the ERC requirements and procedure yourself. This will help you make informed decisions and ensure precise filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief measures. The objective of the ERC is to encourage services to maintain and pay their employees throughout the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to qualified companies, including for-profit businesses, tax-exempt companies, and specific governmental entities. To qualify, companies must fulfill one of two requirements:.
Business operations were totally or partially suspended due to a federal government order related to COVID-19.
The business experienced a substantial decline in gross invoices. As mentioned previously, for 2021, a substantial decline is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross receipts compared to the right away preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit amount is equal to a percentage (approximately 70%) of certified earnings paid to workers, including specific health plan expenses. The maximum credit per staff member is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, organizations that got a Paycheck Protection Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 enables services to claim the ERC even if they got a PPP loan. However, the very same incomes can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively broadened and improved, permitting eligible employers to claim the credit for qualified salaries paid as far back as March 13, 2020. This retroactive provision provides an opportunity for organizations to change prior-year income tax return and get refunds.
Declaring the Credit: Employers can declare the ERC by reporting it on their employment income tax return, usually Kind 941. If the credit surpasses the quantity of work taxes owed, the excess can be refunded to the company.
It is very important to keep in mind that the ERC provisions and eligibility criteria have evolved in time. The very best course of action is to speak with a tax expert or go to the official internal revenue service site for the most updated and comprehensive details regarding the ERC, consisting of any current legal changes or updates.
To qualify for the ERC, a business needs to satisfy among the following criteria:.
Business operations were fully or partly suspended due to a government order related to COVID-19.
Business experienced a considerable decline in gross receipts. For 2021, a substantial decline is specified as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decline in gross invoices compared to the instantly preceding quarter.
The ERC is readily available to companies of all sizes, consisting of tax-exempt companies, however there are some exceptions. Federal government entities and organizations that got a PPP loan might have constraints on declaring the credit.
The procedure for claiming the ERC involves finishing the needed kinds and including the credit on your employment tax return (typically Type 941). The exact time it requires to process the credit can differ based upon numerous aspects, including the complexity of your business and the work of the IRS. It’s recommended to speak with a tax expert for guidance particular to your circumstance.
There are several business that can assist with the process of declaring the ERC. These include accounting companies, tax advisory services, and payroll company. Some well-known companies that provide assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research and contact these business directly to inquire about their services and charges.
Please keep in mind that the details offered here is based upon general understanding and might not show the most recent updates or modifications to the ERC. It’s important to speak with a tax professional or visit the main IRS site for the most up-to-date and accurate details relating to eligibility, claiming procedures, and available help.
Less than 100. The credit is based if the employer had 100 or less employees on average in 2019.
on earnings paid to all employees whether they actually worked or not. To put it simply, even if the.
workers worked full-time and made money for full-time work, the company still gets the credit.
Greater than 100. If the employer had more than 100 employees on average in 2019, then the credit is.
permitted only for salaries paid to staff members who did not work throughout the calendar quarter.
In both cases, “earnings” consists of not simply cash payments however likewise a portion of the expense of employer.
offered healthcare. Q3 Employee Retention Credit
Companies can be instantly reimbursed for the credit by reducing the amount of payroll taxes they.