Lets talk first about Small Business Employee Retention Credit :
Our team here what do these guys doing everybody in this space is assisting teach individuals about ERC and uh always supply a gorgeous breakfast and have people really find out about the program we should head to the room where we have the ability to show a few of the checks that we are getting for business and I wish to see that what is this this is uh numerous millions of dollars actually Kevin numerous millions of dollars so these are replicate copies of the letters that go to customers validating that the check is on the method I mean you understand if you simply begin to 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 indicate it’s just I suggest consider the number of actual 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 verified and the check is on the mail in the mail from the IRS heading to the consumer so that’s how you’re able to track it you understand when you
receive this you know the check is opted for sure and that’s when they pay so they do not pay anything until they actually get the money they do not pay bottom line Wonder trust anything till this letter is validated the check is on the method they transfer it into their bank account and they can genuinely rely on Wonder trust that the procedure has been completed and the number of you believe you have actually processed given that you started this we’re about 35 000 of these for
about six billion dollars wow so clearly they know what they’re doing which’s what you require you require specialists 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 Fantastic here you’re at my YouTube channel we’re talking about something really important today the employee retention credit which most of you have never ever become aware of I definitely hadn’t become aware of it up until very recently and found out a lot about it because this is most likely the most affordable cost of capital for any small company anywhere
anytime if you have employees between five and five hundred so I’ve got the expert with me this is Josh Fox he’s the founder 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 just call your bank supervisor and state provide me a loan it does not 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 have actually become yes the Ambassador and paid representative for this I enjoy this program it’s disappearing very soon you got to find out everything about it let’s talk staff member 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 organizations 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everyone it makes a big difference right there 2 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 okay go on sorry I just have to make sure we got that point I indicate that’s a big distinction a loan versus cash money I like cash cash that’s what we’re speaking about fine 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 lovely tough check in the mail where you get actual cash from the IRS all right so let’s talk about how it works due to the fact that it sounds 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 Assumption this money is not for the owner not for individuals on the cap table not for shareholders it’s for workers right you had to have actually owned a business but it’s based on you having W-2 employees 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 6 months of 2021 on the W-2 appropriate so there were 6 quarters the program was open well walk us through the six quarters so you had quarters two 3 and four of 2020 and you had quarters one 2 and 3 of 2021. okay 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 cash just how much can you get back per employee that was on a W-2 in those six quarters so the computation in 2020 to be specific Kevin is 50 of the employee’s wage 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 income to a maximum of seven thousand per quarter how did that occur um they simply changed the rules in.
2021 versus because the turmoil 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 approximately five thousand Max and then what occurs 21 000 Max in 2021 oh that’s how you create twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty 6 thousand dollars per employee that is because that’s a lot of cash it is now there’s a caveat here the PPP cash would need to be decreased from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would lower the 26 000 so what we’re seeing usually Kevin is if you took PPP money somewhere around ten thousand dollars a person so let’s say hypothetically you owned a restaurant 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 substantial undoubtedly now the huge question is why does no one know about this since look when I initially became aware of this when I first met Josh you understand I have actually got great deals of financial investments in lots of companies I’m a significant advocate for entrepreneurship in America and make many lots of financial investments in business owners of which lots of suffered through the pandemic when I first found out about this I called BS I do not believe it because I use the PPP we went through the money 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 deserved and we used them wisely to survive throughout the pandemic so when I heard about this I said nah it can’t be true however when I dug around I even called to my political leader friends Governor Senators they didn’t know about it I indicate that’s how you know that’s how misinformation is that there’s no information out there then a bunch of individuals informed me well you can’t get it because you took the PPP also not true so let’s ask Josh why does nobody understand about the employee retention credit you understand what’s fascinating you’re speaking about the banks Kevin since in the PPP loan process the federal government made it really clear that if you wanted a PPP loan you would call Wells Fargo Citibank Bank of America any of the huge 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 process process that’s all um and here there was turmoil since remember in the initial cares act you could refrain from doing both programs so if you had actually done PPP you could refrain from doing ERC in the original 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 ever made it clear to anybody about how to.
do this does your CFO know how to do this not actually she or he’s never done it before do the banks do it nope the banks don’t 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 service and bottom line my company Kevin has actually been in business given that 2009 and we’ve been working with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 companies so a lot of our huge big corporate customers have dealt with bottom line to recuperate other federal government programs we’ve done sales tax and utilize tax unemployment tax work opportunity tax credits research and development tax credits unclaimed home property tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit designed to encourage.
employers to keep workers on their payroll. The credit is 50% of up to $10,000 in salaries paid by an.
Since of COVID-19 or whose gross invoices, employer whose organization is totally or partly suspended.
decline by more than 50%.
1. The credit is available to all companies regardless of size consisting of tax exempt organizations. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) little.
businesses who take Small company Loans.
2. To certify, the employer has to satisfy one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s organization is fully or partially suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the equivalent quarter in 2019. As soon as the.
employer’s gross invoices go above 80% of a comparable quarter in 2019 they no longer certify.
after the end of that quarter.
Computation of the Credit.
The quantity of the credit is 50% of the qualifying earnings paid up to $10,000 in total.
It works for salaries paid after March 13th and prior to December 31, 2020.
The meaning of certifying wages varies by whether an employer had, usually, basically than.
100 employees in 2019.
Business that focus on ERC filing assistance typically provide expertise and assistance to help businesses navigate the complicated process of declaring the credit. They can use various services, including:.
How is the employee retention credit calculated? Small Business Employee Retention Credit
Eligibility Assessment: These business will evaluate your service’s eligibility for the ERC based upon elements such as your market, income, and operations. If you meet the requirements for the credit and identify the optimum credit quantity you can declare, they can assist figure out.
Documents and Calculation: ERC filing services will help in gathering the essential documentation, such as payroll records and financial declarations, to support your claim. They will also help determine the credit amount based on eligible incomes and other qualifying expenditures.
Retroactive Claim Review: If you are eligible to declare the ERC for previous quarters, these business can review your previous payroll records and financials to recognize prospective chances for retroactive credits. They can assist you amend prior tax returns to declare these refunds.
Filing Assistance: Companies specializing in ERC filings will prepare and submit the needed kinds and documents in your place. This consists of finishing Kind 941 or any other required tax forms.
Compliance and Updates: ERC guidelines and guidance have progressed gradually. These business remain updated with the current changes and guarantee that your filings abide by the most current standards. They can likewise offer ongoing assistance if the IRS requests additional details or conducts an audit related to your ERC claim.
It is necessary to research and vet any business providing ERC filing support to guarantee their credibility and knowledge. Try to find recognized firms with experience in tax and payroll services, or consider reaching out to relied on accounting firms or tax specialists who use ERC filing support.
Remember that while these companies can offer valuable help, it’s constantly an excellent idea to have a standard 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 introduced by the U.S. government as part of COVID-19 relief steps. The objective of the ERC is to motivate organizations to retain and pay their staff members during the pandemic, even if their operations have actually been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to qualified employers, consisting of for-profit businesses, tax-exempt companies, and specific governmental entities. To certify, companies should meet one of two criteria:.
Business operations were completely or partly suspended due to a government order related to COVID-19.
Business experienced a significant decrease in gross invoices. As mentioned previously, for 2021, a significant decline is specified as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decrease in gross receipts 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 company’s share of Social Security taxes. The credit quantity is equal to a portion (as much as 70%) of certified earnings paid to staff members, consisting of certain health plan expenditures. The maximum credit per worker 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 Security Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 enables businesses to declare the ERC even if they got a PPP loan. However, the same earnings can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively expanded and enhanced, enabling eligible companies to claim the credit for qualified wages paid as far back as March 13, 2020. This retroactive arrangement supplies a chance for companies to modify prior-year tax returns and get refunds.
Declaring the Credit: Employers can declare the ERC by reporting it on their employment tax returns, usually Type 941. The excess can be refunded to the employer if the credit surpasses the amount of work taxes owed.
It is very important to note that the ERC provisions and eligibility requirements have actually progressed gradually. The very best strategy is to consult with a tax professional or go to the main IRS site for the most up-to-date and in-depth details relating to the ERC, consisting of any current legislative changes or updates.
To qualify for the ERC, a business needs to meet among the following requirements:.
The business operations were completely or partly suspended due to a federal government order related to COVID-19.
Business experienced a considerable decline in gross invoices. 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% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross receipts compared to the right away preceding quarter.
The ERC is readily available to businesses of all sizes, consisting of tax-exempt organizations, however there are some exceptions. Government entities and companies that got a PPP loan might have limitations on claiming the credit.
The process for declaring the ERC includes completing the required forms and consisting of the credit on your work income tax return (usually Kind 941). The exact time it requires to process the credit can differ based on numerous factors, including the intricacy of your company and the workload of the internal revenue service. It’s advised to talk to a tax professional for assistance particular to your circumstance.
There are numerous companies that can assist with the procedure of claiming the ERC. These include accounting firms, tax advisory services, and payroll provider. Some widely known companies that use assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research and get in touch with these companies directly to ask about their costs and services.
Please keep in mind that the information supplied here is based upon general understanding and might not reflect the most current 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, declaring procedures, and offered assistance.
Less than 100. If the company had 100 or less employees on average in 2019, then the credit is based.
on wages paid to all employees whether they actually worked or not. To put it simply, even if the.
employees worked full time and earned money for full time work, the employer still gets the credit.
Greater than 100. If the employer had more than 100 workers on average in 2019, then the credit is.
permitted just for wages paid to workers who did not work during the calendar quarter.
In both cases, “earnings” includes not just cash payments however likewise a portion of the cost of employer.
supplied health care. Small Business Employee Retention Credit
Employers can be instantly reimbursed for the credit by minimizing the amount of payroll taxes they.