Lets talk first about Qualification For Employee Retention Credit :
Our team here what do these men doing everybody in this room is assisting teach people about ERC and uh constantly provide a lovely breakfast and have individuals really learn about the program we need to head to the space where we are able to show some of the checks that we are getting for business and I want to see that what is this this is uh numerous millions of dollars literally Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to clients confirming that the check is on the method I mean you know if you simply begin to look at some of these here I indicate this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I imply it’s simply I imply think about how many actual customers 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 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 and that’s when they pay so they don’t pay anything till they in fact receive the cash they do not pay bottom line Wonder trust anything until this letter is verified the check is on the method they transfer it into their checking account and they can truly rely on Wonder trust that the procedure has been completed and how many you think you have actually processed given that you started this we have to do with 35 000 of these for
about 6 billion dollars wow so clearly they know what they’re doing which’s what you need you require professionals 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 Wonderful here you’re at my YouTube channel we’re talking about something truly essential today the staff member retention credit which the majority of you have actually never heard of I definitely hadn’t become aware of it till really just recently and found out a lot about it due to the fact that this is most likely the most affordable expense of capital for any small company anywhere
anytime if you have employees between 5 and five hundred so I’ve got the specialist with me this is Josh Fox he’s the founder and CEO of bottom line Ideas they’re the largest processor of these ERC credits this is a 170 page program so it’s not easy this isn’t like PPP we just call up your bank supervisor and state give 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 become yes the Ambassador and paid representative for this I enjoy this program it’s going away soon you got to learn all about it let’s talk employee retention credit Josh Fox what is an ERC let’s just start 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 almost 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.
correct the money cash payroll tax refund fine go on sorry I simply need to ensure we got that point I mean that’s a big difference a loan versus money cash I like cash cash that’s what we’re talking 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 lovely difficult check in the mail where you get actual cash from the IRS all right so let’s speak about how it works due to the fact that it seems like to me if it’s a if it’s employee retention credit that person needed to be a worker so I’m going to make the Assumption this money is not for the owner not for people on the cap table not for investors 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. so 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 need to be on payroll for the first 6 months of 2021 on the W-2 appropriate so there were six quarters the program was open well walk us through the six quarters so you had quarters two three and 4 of 2020 and you had quarters one 2 and 3 of 2021. alright so that’s how it’s measured you have to be on the W-2 throughout that duration now let’s talk my favorite part money how much can you get back per employee 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 salary to a maximum of 5 thousand dollars per staff member for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s wage to a maximum of seven thousand per quarter how did that happen um they just changed the rules in.
2021 versus since the turmoil 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 occurs 21 000 Max in 2021 oh that’s how you come up with twenty 6 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 money it is now there’s a caution here the PPP money would have to be lowered from the twenty six 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 dining establishment in New York City where I’m from and you had a hundred staff members and you took PPP money you would still get a million dollar in the mail from the IRS so it’s huge undoubtedly now the big concern is why does no one learn about this because appearance when I initially found out about this when I first satisfied Josh you know I’ve got great deals of financial investments in great deals of business I’m a significant advocate for entrepreneurship in America and make numerous numerous financial investments in entrepreneurs of which lots of suffered through the pandemic when I first became aware of this I called BS I don’t think it because I utilize 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 deserved and we utilized them carefully to survive throughout the pandemic so when I heard about this I said nah it can’t be true but when I dug around I even called to my politician good friends Governor Senators they didn’t learn about it I mean that’s how you understand that’s how misinformation is that there’s no info out there then a lot of people informed 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 know what’s intriguing you’re discussing the banks Kevin since in the PPP loan procedure 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 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 just process process that’s all um and here there was turmoil due to the fact that keep in mind in the original cares act you might not do both programs so if you had actually done PPP you could not do ERC in the initial 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 anyone about how to.
do this does your CFO know how to do this not truly he or she’s never ever done it before do the banks do it nope the banks do not do it the payroll business yeah some of them are doing it as a payroll business your accountant no your accounting professional’s never done this prior to unless you have an account that entered into this organization and bottom line my firm Kevin has actually stayed in business because 2009 and we have actually been dealing with the federal government and the state federal government to recover cash for Fortune 500 Fortune 1000 business so a great deal of our huge big corporate customers have actually dealt with bottom line to recuperate other 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 worker retention tax credit is a broad based refundable tax credit developed to encourage.
employers to keep employees on their payroll. The credit is 50% of approximately $10,000 in salaries paid by an.
Because of COVID-19 or whose gross invoices, employer whose organization is fully or partially suspended.
decrease by more than 50%.
1. The credit is available to all employers despite size consisting of tax exempt organizations. There are.
just 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
services who take Small company Loans.
2. To qualify, the employer needs to satisfy one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s organization is completely or partly suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the similar quarter in 2019. Once the.
employer’s gross invoices go above 80% of a comparable quarter in 2019 they no longer qualify.
after the end of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the qualifying wages paid up to $10,000 in overall.
It works for incomes paid after March 13th and before December 31, 2020.
The definition of certifying earnings varies by whether a company had, on average, basically than.
100 employees in 2019.
Business that specialize in ERC filing help normally offer know-how and support to assist services browse the complex process of claiming the credit. They can provide different services, consisting of:.
How is the employee retention credit calculated? Qualification For Employee Retention Credit
Eligibility Assessment: These business will evaluate your company’s eligibility for the ERC based upon aspects such as your industry, earnings, and operations. If you satisfy the requirements for the credit and determine the maximum credit quantity you can declare, they can help figure out.
Documentation and Calculation: ERC filing services will assist in collecting the needed documentation, such as payroll records and financial declarations, to support your claim. They will likewise assist calculate the credit quantity based upon eligible salaries and other qualifying costs.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for previous quarters, these business can evaluate your past payroll records and financials to determine potential chances for retroactive credits. They can help you change prior tax returns to declare these refunds.
Filing Help: Business focusing on ERC filings will prepare and submit the essential forms and documents in your place. This consists of finishing Form 941 or any other necessary tax forms.
Compliance and Updates: ERC guidelines and assistance have evolved over time. These business remain upgraded with the latest changes and guarantee that your filings abide by the most existing guidelines. They can also offer ongoing support if the IRS demands additional information or performs an audit related to your ERC claim.
It’s important to research and vet any business offering ERC filing support to guarantee their trustworthiness and proficiency. Search for recognized companies with experience in tax and payroll services, or think about reaching out to relied on accounting companies or tax specialists who provide ERC filing assistance.
Bear in mind that while these business can supply important support, it’s always a great concept to have a standard understanding of the ERC requirements and process yourself. This will help you make notified choices and guarantee 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 procedures. The objective of the ERC is to encourage businesses to keep and pay their workers during the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to qualified companies, including for-profit companies, tax-exempt organizations, and specific governmental entities. To qualify, employers must fulfill one of two criteria:.
The business operations were completely or partly suspended due to a government order related to COVID-19.
The business experienced a significant decrease in gross receipts. As pointed out previously, for 2021, a considerable decrease is specified as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decline in gross receipts compared to the 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 employer’s share of Social Security taxes. The credit amount amounts to a portion (approximately 70%) of certified salaries paid to employees, consisting of certain health plan expenses. 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 received an Income Defense Program (PPP) loan were not eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 permits businesses to declare the ERC even if they got a PPP loan. Nevertheless, the exact same incomes can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and enhanced, permitting qualified employers to claim the credit for certified wages paid as far back as March 13, 2020. This retroactive provision offers an opportunity for businesses to change prior-year income tax return and receive refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their employment tax returns, generally Type 941. If the credit goes beyond the quantity of work taxes owed, the excess can be refunded to the employer.
It is necessary to keep in mind that the ERC arrangements and eligibility criteria have developed gradually. The very best strategy is to talk to a tax expert or check out the main internal revenue service site for the most up-to-date and detailed information relating to the ERC, consisting of any recent legislative modifications or updates.
To receive the ERC, a service needs to satisfy one of the following requirements:.
Business operations were totally or partly suspended due to a federal government order related to COVID-19.
Business experienced a substantial decrease in gross receipts. For 2021, a considerable decrease is specified as a 20% decrease 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 exact 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, consisting of tax-exempt companies, however there are some exceptions. For example, federal government entities and services that got a PPP loan may have limitations on claiming the credit.
The process for declaring the ERC includes completing the essential kinds and including the credit on your employment tax return (generally Kind 941). The exact time it takes to process the credit can differ based upon a number of factors, consisting of the complexity of your service and the work of the IRS. It’s recommended to talk to a tax professional for guidance particular to your circumstance.
There are numerous business that can assist with the procedure of claiming the ERC. Some popular business that use support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the details provided here is based on basic understanding and may not show the most recent updates or changes to the ERC. It is essential to consult with a tax expert or visit the main internal revenue service website for the most accurate and up-to-date information regarding eligibility, claiming procedures, and available help.
Less than 100. If the company had 100 or fewer workers typically in 2019, then the credit is based.
on earnings paid to all staff members 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 employer still gets the credit.
Greater than 100. The credit is if the employer had more than 100 workers on average in 2019.
enabled only for wages paid to employees who did not work during the calendar quarter.
In both cases, “earnings” includes not simply money payments but also a part of the expense of employer.
provided healthcare. Qualification For Employee Retention Credit
Employers can be immediately repaid for the credit by reducing the amount of payroll taxes they.