Lets talk first about Refundable Employee Retention Credit :
Our team here what do these guys doing everybody in this room is helping teach people about ERC and uh always supply a beautiful breakfast and have people really learn more about the program we need to head to the space where we have the ability to show a few of the checks that we are getting for companies and I wish to see that what is this this is uh numerous millions of dollars actually Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to customers validating that the check is on the way I mean you understand if you simply start 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 suggest it’s just I suggest think about how many real 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 validated 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 know when you
get this you know 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 don’t pay bottom line Wonder trust anything till this letter is confirmed the check is on the method they transfer it into their bank account and they can really trust Wonder trust that the procedure has actually been ended up and the number of you believe you have actually processed because you started this we’re about 35 000 of these for
about 6 billion dollars wow so plainly they understand what they’re doing and that’s what you need you require 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 Wonderful here you’re at my YouTube channel we’re talking about something truly essential today the worker retention credit which the majority of you have never ever heard of I certainly hadn’t become aware of it till very recently and found out a lot about it due to the fact that this is most likely the lowest expense of capital for any small business anywhere
anytime if you have workers between five and five hundred so I have actually got the professional with me this is Josh Fox he’s the founder and CEO of bottom line Principles 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 your bank supervisor and state provide me a loan it doesn’t 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 enjoy this program it’s going away soon you got to find out everything about it let’s talk worker retention credit Josh Fox what is an ERC let’s just begin there so during the Trump Administration when President Trump was enacted they created the cares Act and the cares act used businesses 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everybody it makes a huge difference right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the cash money payroll tax refund fine go on sorry I simply have to make certain we got that point I mean that’s a big difference a loan versus cash cash I like money money that’s what we’re speaking about 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 initial cares Act is the ERC and yes Kevin it is a lovely difficult check in the mail where you get actual money from the internal revenue service all right so let’s talk about how it works due to the fact that 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 cash is not for the owner not for individuals on the cap table not for shareholders it’s for employees right you needed to have owned a company but 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 eligible so you have to be on payroll in 2020 on the W-2 and you have to be on payroll for the first 6 months of 2021 on the W-2 proper so there were 6 quarters the program was open well walk us through the 6 quarters so you had quarters 2 three and four of 2020 and you had quarters one two and three of 2021. all right so that’s how it’s measured you have to be on the W-2 during that period now let’s talk my preferred part cash just 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 specific Kevin is 50 of the staff member’s income to an optimum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers increased to 70 of the employee’s salary to a maximum of 7 thousand per quarter how did that happen um they just changed the rules in.
2021 versus because the mayhem of the pandemic so they wished 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 five thousand Max and after that what happens 21 000 Max in 2021 oh that’s how you come up with twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty six thousand dollars per worker that is because that’s a great deal of cash it is now there’s a caution here the PPP money would need to be decreased from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would lower the 26 000 so what we’re seeing typically Kevin is if you took PPP cash someplace around 10 thousand dollars a person so let’s state hypothetically you owned a dining establishment in New york city City where I’m from and you had a hundred workers and you took PPP money you would still get a million dollar in the mail from the internal revenue service so it’s huge certainly now the huge concern is why does nobody understand about this due to the fact that look when I first heard about this when I first met Josh you understand I’ve got great deals of financial investments in great deals of business I’m a major supporter for entrepreneurship in America and make lots of lots of financial investments in entrepreneurs of which lots of suffered through the pandemic when I first found out about this I called BS I do not believe it since I utilize 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 and that were well been worthy of and we used them sensibly to survive during the pandemic so when I found out about this I stated nah it can’t be true but when I dug around I even called to my political leader buddies Governor Senators they didn’t learn about it I mean that’s how you know that’s how false information is that there’s no info out there then a lot of people informed me well you can’t get it since you took the PPP likewise not true so let’s ask Josh why does no one understand about the employee retention credit you understand what’s fascinating you’re discussing the banks Kevin because 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 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 just procedure 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 refrain from doing 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 refraining from doing ERC because 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 understand how to do this not truly he or she’s never done it previously do the banks do it nope the banks don’t do it the payroll business yeah a few 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 entered into this service and bottom line my company Kevin has been in business since 2009 and we’ve been dealing with the federal government and the state federal government to recuperate cash for Fortune 500 Fortune 1000 companies so a lot of our huge huge business clients have actually worked with bottom line to recuperate 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 real estate tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit developed to encourage.
companies to keep workers on their payroll. The credit is 50% of approximately $10,000 in earnings paid by an.
Since of COVID-19 or whose gross invoices, employer whose organization is fully or partly suspended.
decrease by more than 50%.
1. The credit is available to all companies regardless of 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 Business Loans.
2. To certify, the employer needs to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s organization is fully or partially suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross invoices are below 50% of the similar quarter in 2019. As soon as the.
company’s gross receipts exceed 80% of an equivalent quarter in 2019 they no longer qualify.
after the end of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the certifying salaries paid up to $10,000 in total.
It is effective for salaries paid after March 13th and prior to December 31, 2020.
The meaning of certifying earnings differs by whether a company had, usually, basically than.
100 staff members in 2019.
Business that concentrate on ERC filing support generally offer competence and support to assist services navigate the intricate procedure of declaring the credit. They can use numerous services, consisting of:.
How is the employee retention credit calculated? Refundable Employee Retention Credit
Eligibility Assessment: These companies will examine your organization’s eligibility for the ERC based on factors such as your industry, profits, and operations. They can help figure out if you meet the requirements for the credit and identify the maximum credit amount you can claim.
Documentation and Computation: ERC filing services will help in gathering the required documentation, such as payroll records and financial declarations, to support your claim. They will likewise help calculate the credit amount based upon qualified earnings and other certifying expenditures.
Retroactive Claim Review: If you are eligible to claim the ERC for previous quarters, these business can review your previous payroll records and financials to determine possible opportunities for retroactive credits. They can help you modify previous income tax return to declare these refunds.
Filing Assistance: Business focusing on ERC filings will prepare and submit the required types and documents on your behalf. This consists of completing Form 941 or any other necessary tax forms.
Compliance and Updates: ERC guidelines and guidance have actually evolved gradually. These companies stay updated with the current modifications and guarantee that your filings abide by the most existing standards. If the IRS demands extra info or performs an audit related to your ERC claim, they can likewise provide continuous support.
It’s important to research and veterinarian any company offering ERC filing help to ensure their trustworthiness and competence. Search for established firms with experience in tax and payroll services, or consider reaching out to relied on accounting firms or tax specialists who provide ERC submitting support.
Keep in mind that while these companies can offer important support, it’s always a good concept to have a basic understanding of the ERC requirements and process yourself. This will help you make informed decisions and guarantee precise filings.
The Worker 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 businesses to keep and pay their employees during the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to eligible companies, consisting of for-profit organizations, tax-exempt organizations, and particular governmental entities. To qualify, companies should satisfy one of two criteria:.
The business operations were fully or partly suspended due to a federal government order related to COVID-19.
The business experienced a considerable decrease in gross invoices. As pointed out previously, for 2021, a considerable decrease is specified as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a considerable 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.
Credit Quantity: 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 earnings paid to employees, including particular health insurance costs. 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: At first, companies that got a Paycheck Defense Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 enables services to claim the ERC even if they received a PPP loan. The same earnings can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively expanded and boosted, permitting qualified companies to claim the credit for certified incomes paid as far back as March 13, 2020. This retroactive provision supplies an opportunity for services to amend prior-year income tax return and get refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their work income tax return, typically Kind 941. The excess can be reimbursed to the employer if the credit exceeds the quantity of employment taxes owed.
It is essential to keep in mind that the ERC arrangements and eligibility criteria have actually progressed gradually. The best strategy is to seek advice from a tax expert or go to the main internal revenue service site for the most updated and comprehensive info concerning the ERC, consisting of any current legal changes or updates.
To get approved for the ERC, a company must meet one of the following criteria:.
The business operations were fully or partially suspended due to a federal government order related to COVID-19.
The business experienced a substantial decline in gross receipts. For 2021, a significant decrease is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decline in gross invoices compared to the immediately preceding quarter.
The ERC is available to companies of all sizes, including tax-exempt organizations, but there are some exceptions. Federal government entities and companies that got a PPP loan may have constraints on declaring the credit.
The procedure for declaring the ERC includes completing the needed forms and consisting of the credit on your work tax return (generally Type 941). The exact time it requires to process the credit can vary based on numerous factors, consisting of the complexity of your service and the workload of the internal revenue service. It’s suggested to talk to a tax expert for assistance particular to your situation.
There are numerous companies that can help with the procedure of declaring the ERC. Some well-known business that use assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the info provided here is based upon general knowledge and might not reflect the most recent updates or changes to the ERC. It is very important to seek advice from a tax expert or visit the official internal revenue service site for the most accurate and current details regarding eligibility, claiming procedures, and offered assistance.
Less than 100. If the employer had 100 or less workers typically in 2019, then the credit is based.
on wages paid to all employees whether they really worked or not. Simply put, even if the.
employees worked full time and earned 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 just for earnings paid to workers who did not work throughout the calendar quarter.
In both cases, “salaries” includes not simply cash payments but likewise a portion of the expense of employer.
supplied healthcare. Refundable Employee Retention Credit
Employers can be immediately reimbursed for the credit by reducing the amount of payroll taxes they.