Lets talk first about Qualifications For The Employee Retention Credit :
Our team here what do these guys doing everybody in this space is helping teach individuals about ERC and uh always offer a beautiful breakfast and have people actually learn more about the program we should 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 numerous millions of dollars so these are duplicate copies of the letters that go to customers confirming that the check is on the way I mean you know if you just begin to take a look at some 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 just I indicate think of the number of actual clients 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 verified and the check is on the mail in the mail from the internal revenue service 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 opted for sure which’s when they pay so they don’t pay anything till they actually receive the money they do not pay bottom line Wonder trust anything until this letter is validated the check is on the method they transfer it into their bank account and they can really rely on Wonder trust that the process has been completed 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 plainly they understand what they’re doing and that’s what you need you require 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 Terrific here you’re at my YouTube channel we’re speaking about something actually essential today the worker retention credit which most of you have never heard of I definitely hadn’t heard of it until really just recently and learned a lot about it since this is probably 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 professional 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 challenging this isn’t like PPP we just call up your bank supervisor and state give me a loan it does not work there’s not a loan it’s an application and Josh is going to inform us all about it and how to get it and why I have actually become yes the Ambassador and paid spokesperson for this I like this program it’s disappearing very soon you got to learn all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply start there so during the Trump Administration when President Trump was enacted they created the cares Act and the cares act used services three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everyone 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 cash payroll tax refund fine go on sorry I just need to make certain we got that point I imply that’s a big distinction a loan versus money money I like money cash that’s what we’re talking about 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 lovely difficult check in the mail where you get real money from the internal revenue service all right so let’s discuss how it works since it seems like to me if it’s a if it’s worker retention credit that individual needed to be a staff member so I’m going to make the Presumption this money is not for the owner not for individuals on the cap table not for investors it’s for workers right you had to have owned a service however it’s based on you having W-2 staff members 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 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 stroll us through the six quarters so you had quarters 2 three and 4 of 2020 and you had quarters one 2 and 3 of 2021. fine so that’s how it’s determined you need to be on the W-2 during that period now let’s talk my preferred part money just how much can you get back per employee that was on a W-2 in those 6 quarters so the estimation in 2020 to be exact Kevin is 50 of the staff member’s salary to an optimum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers escalated to 70 of the worker’s salary to a maximum of 7 thousand per quarter how did that take place um they simply changed the rules in.
2021 versus since the mayhem 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 then what takes place 21 000 Max in 2021 oh that’s how you develop twenty 6 thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty 6 thousand dollars per worker that is since that’s a lot of cash it is now there’s a caution here the PPP cash would have to be reduced 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 cash somewhere around ten thousand dollars an individual so let’s state hypothetically you owned a restaurant in New york city 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 internal revenue service so it’s huge undoubtedly now the big concern is why does no one know about this because appearance when I initially became aware of this when I first satisfied Josh you understand I’ve got lots of financial investments in lots of business I’m a major advocate for entrepreneurship in America and make lots of many financial investments in entrepreneurs of which many suffered through the pandemic when I initially became aware of this I called BS I do not think it due to the fact that I use 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 which were well should have and we used them sensibly to survive during the pandemic so when I heard about this I stated nah it can’t hold true but when I dug around I even contacted us to my politician buddies Governor Senators they didn’t learn about it I mean that’s how you know that’s how misinformation is that there’s no information out there then a bunch of people told me well you can’t get it because you took the PPP likewise not true so let’s ask Josh why does nobody understand about the worker retention credit you understand what’s interesting you’re talking about the banks Kevin due to the fact that in the PPP loan process 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 big 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 procedure process that’s all um and here there was chaos due to the fact that keep in mind in the original cares act you might not do both programs so if you had done PPP you could refrain from doing ERC in the initial program and when they altered the law in 2021 the banks were not doing ERC due to the fact that it’s not alone so you’re getting a tax refund so the federal government never made it clear to anyone about how to.
do this does your CFO understand how to do this not actually she or he’s never ever done it before 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 business your accounting professional no your accountant’s never ever done this before unless you have an account that went into this organization and bottom line my firm Kevin has stayed in business considering that 2009 and we’ve been dealing with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 business so a lot of our big big corporate customers have worked with bottom line to recuperate 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 property tax all of these other federal government programs.
The employee 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 up to $10,000 in incomes paid by an.
employer whose organization is totally or partly suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is available to all companies regardless of size consisting of tax exempt companies. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) little.
businesses who take Small company Loans.
2. To certify, the company has to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s company is totally or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross receipts are below 50% of the equivalent quarter in 2019. As soon as the.
employer’s gross receipts 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 certifying wages paid up to $10,000 in overall.
It works for wages paid after March 13th and before December 31, 2020.
The meaning of certifying incomes differs by whether a company had, on average, basically than.
100 staff members in 2019.
Business that focus on ERC filing help normally offer expertise and assistance to help businesses browse the complicated process of claiming the credit. They can use various services, consisting of:.
How is the employee retention credit calculated? Qualifications For The Employee Retention Credit
Eligibility Evaluation: These companies will examine your service’s eligibility for the ERC based on elements such as your industry, earnings, and operations. If you fulfill the requirements for the credit and recognize the maximum credit quantity you can claim, they can assist determine.
Documentation and Calculation: ERC filing services will assist in collecting the needed documentation, such as payroll records and monetary statements, to support your claim. They will likewise assist compute the credit quantity based upon qualified wages and other certifying costs.
Retroactive Claim Review: If you are eligible to claim the ERC for prior quarters, these business can examine your previous payroll records and financials to recognize prospective chances for retroactive credits. They can help you modify prior tax returns to declare these refunds.
Filing Help: Companies specializing in ERC filings will prepare and send the needed types and documents on your behalf. This consists of completing Kind 941 or any other necessary tax forms.
Compliance and Updates: ERC guidelines and assistance have actually progressed over time. These business remain updated with the most recent modifications and ensure that your filings adhere to the most present standards. If the Internal revenue service demands additional info or carries out an audit related to your ERC claim, they can likewise provide ongoing support.
It is very important to research and veterinarian any business providing ERC filing assistance to ensure their reliability and know-how. Try to find established companies with experience in tax and payroll services, or think about reaching out to relied on accounting firms or tax experts who provide ERC submitting assistance.
Keep in mind that while these companies can offer important support, it’s constantly an excellent idea to have a basic understanding of the ERC requirements and process yourself. This will help you make informed decisions and ensure accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief measures. The objective of the ERC is to motivate companies to keep 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 qualified employers, including for-profit services, tax-exempt companies, and particular governmental entities. To qualify, companies must meet one of two criteria:.
Business operations were fully or partly suspended due to a government order related to COVID-19.
The business experienced a substantial decline in gross receipts. As mentioned earlier, 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 substantial decline is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross invoices compared to the immediately 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 (as much as 70%) of certified wages paid to staff members, including specific 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, organizations that received a Paycheck Protection Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 permits services to declare the ERC even if they received a PPP loan. The very same salaries can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and enhanced, enabling qualified companies to claim the credit for qualified incomes paid as far back as March 13, 2020. This retroactive provision supplies a chance for businesses to amend prior-year income tax return and get refunds.
Claiming the Credit: Companies can declare the ERC by reporting it on their employment income tax return, usually Type 941. If the credit surpasses the amount of work taxes owed, the excess can be reimbursed to the company.
It is essential to keep in mind that the ERC arrangements and eligibility criteria have actually evolved over time. The best strategy is to consult with a tax expert or visit the main IRS website for the most up-to-date and in-depth info relating to the ERC, consisting of any recent legal changes or updates.
To get approved for the ERC, an organization must satisfy among the following criteria:.
Business operations were completely or partially suspended due to a government order related to COVID-19.
The business experienced a considerable decline in gross receipts. For 2021, a significant decline is specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decline is defined 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.
The ERC is readily available to organizations of all sizes, including tax-exempt organizations, however there are some exceptions. For example, federal government entities and organizations that received a PPP loan might have restrictions on declaring the credit.
The process for declaring the ERC includes finishing the needed kinds and including the credit on your work income tax return (typically Type 941). The exact time it takes to process the credit can differ based on a number of elements, consisting of the intricacy of your organization and the workload of the internal revenue service. It’s advised to talk to a tax professional for guidance specific to your circumstance.
There are numerous companies that can aid with the procedure of claiming the ERC. These consist of accounting firms, tax advisory services, and payroll service providers. Some popular companies that offer support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research and contact these business directly to inquire about their charges and services.
Please keep in mind that the information provided here is based upon basic knowledge and might not show the most recent updates or changes to the ERC. It is necessary to consult with a tax professional or check out the official IRS website for the most current and accurate info relating to eligibility, declaring procedures, and available help.
Less than 100. The credit is based if the company had 100 or less employees on average in 2019.
on incomes paid to all workers whether they really worked or not. To put it simply, even if the.
workers worked full-time and earned money for full-time work, the employer still gets the credit.
Greater than 100. The credit is if the company had more than 100 employees on average in 2019.
permitted just for earnings paid to staff members who did not work during the calendar quarter.
In both cases, “wages” consists of not just money payments but likewise a part of the cost of employer.
provided healthcare. Qualifications For The Employee Retention Credit
Employers can be instantly compensated for the credit by minimizing the amount of payroll taxes they.