Lets talk first about What Can Employee Retention Credit Be Used For :
Our group here what do these men doing everybody in this room is helping teach individuals about ERC and uh constantly provide a lovely breakfast and have people truly learn more about the program we should head to the space where we have the ability to display some of the checks that we are getting for companies and I wish to see that what is this this is uh numerous countless dollars actually Kevin hundreds of countless dollars so these are replicate copies of the letters that go to customers validating that the check is on the method I mean you know if you simply begin to take a look at a few of these here I mean this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I imply it’s just I mean think about 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 validated and the check is on the mail in the mail from the IRS heading to the customer so that’s how you have the ability to track it you know when you
receive this you understand the check is chosen sure and that’s when they pay so they do not pay anything up until they actually receive the money they don’t pay bottom line Wonder trust anything up until this letter is confirmed the check is on the way they deposit it into their savings 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 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 among these that’s what matters all right Mr Fantastic here you’re at my YouTube channel we’re talking about something really crucial today the employee retention credit which most of you have never ever become aware of I certainly had not heard of it up until really just recently and learned a lot about it since this is most likely the most affordable 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 Principles they’re the biggest processor of these ERC credits this is a 170 page program so it’s not easy this isn’t like PPP we just phone 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’ve 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 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 developed the cares Act and the cares act provided services 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 huge difference right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the cash cash payroll tax refund fine go on sorry I just have to ensure we got that point I mean that’s a big distinction a loan versus cash cash I like cash money 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 original cares Act is the ERC and yes Kevin it is a lovely hard check in the mail where you get real money from the internal revenue service all right so let’s talk about how it works since it sounds like to me if it’s a if it’s employee retention credit that individual 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 investors it’s for workers right you had to have owned a company but it’s based on you having W-2 employees in America not 10.99. As long as you had W-2 workers 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 proper so there were six quarters the program was open well stroll 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. alright so that’s how it’s measured you have to be on the W-2 throughout that period now let’s talk my favorite part money just how much can you get back per employee that was on a W-2 in those six quarters so the estimation in 2020 to be precise Kevin is 50 of the worker’s salary 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 seven thousand per quarter how did that occur um they simply altered the rules in.
2021 versus since the mayhem 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 then what occurs 21 000 Max in 2021 oh that’s how you develop twenty six 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 cash would have to be reduced from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would decrease the 26 000 so what we’re seeing usually Kevin is if you took PPP money somewhere around ten thousand dollars an individual 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 big undoubtedly now the big question is why does no one learn about this due to the fact that appearance when I initially heard about this when I first met Josh you understand I have actually got lots of investments in great deals of business I’m a significant advocate for entrepreneurship in America and make lots of many financial investments in entrepreneurs of which lots of suffered through the pandemic when I initially became aware of this I called BS I don’t think it since I utilize 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 and that were well deserved and we utilized them wisely to survive throughout the pandemic so when I became aware of this I said nah it can’t hold true however when I dug around I even contacted us to my politician friends Governor Senators they didn’t learn about it I mean that’s how you understand that’s how false information is that there’s no information out there then a lot of people informed me well you can’t get it due to the fact that you took the PPP also not true so let’s ask Josh why does nobody learn about the staff member retention credit you know what’s fascinating you’re talking about the banks Kevin since in the PPP loan process the federal government made it really 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 simply procedure procedure that’s all um and here there was mayhem because keep in mind in the initial cares act you might not do both programs so if you had done PPP you might refrain from doing ERC in the initial program and when they changed the law in 2021 the banks were refraining from doing ERC since 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 actually she or he’s never ever done it in the past 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 company your accounting professional no your accounting professional’s never done this prior to unless you have an account that entered into this business and bottom line my company Kevin has actually stayed in business given that 2009 and we have actually been working with the federal government and the state federal government to recuperate cash for Fortune 500 Fortune 1000 companies so a lot of our huge big corporate customers have actually dealt with bottom line to recover other federal government programs we have actually done sales tax and use tax unemployment 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 designed to encourage.
companies to keep workers on their payroll. The credit is 50% of as much as $10,000 in wages paid by an.
employer whose organization is totally or partly suspended because of COVID-19 or whose gross invoices.
decrease by more than 50%.
1. The credit is readily available to all employers despite size consisting of tax exempt companies. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
businesses who take Small Business Loans.
2. To qualify, the employer has to fulfill one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s business is totally or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross receipts are listed below 50% of the equivalent quarter in 2019. Once the.
employer’s gross receipts go above 80% of a comparable quarter in 2019 they no longer qualify.
after completion of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the certifying incomes paid up to $10,000 in total.
It works for salaries paid after March 13th and before December 31, 2020.
The definition of certifying wages differs by whether a company had, usually, basically than.
100 workers in 2019.
Companies that specialize in ERC filing assistance usually offer knowledge and support to help businesses navigate the intricate process of declaring the credit. They can offer various services, including:.
How is the employee retention credit calculated? What Can Employee Retention Credit Be Used For
Eligibility Assessment: These business will examine your company’s eligibility for the ERC based upon aspects such as your industry, revenue, and operations. They can assist identify if you meet the requirements for the credit and determine the maximum credit amount you can declare.
Documents and Estimation: ERC filing services will help in collecting the necessary documentation, such as payroll records and monetary statements, to support your claim. They will also assist determine the credit quantity based upon qualified salaries and other qualifying expenditures.
Retroactive Claim Review: If you are eligible to claim the ERC for prior quarters, these business can evaluate your past payroll records and financials to recognize possible chances for retroactive credits. They can assist you change prior income tax return to claim these refunds.
Filing Assistance: Companies specializing in ERC filings will prepare and submit the required forms and documents on your behalf. This consists of finishing Form 941 or any other necessary tax return.
Compliance and Updates: ERC policies and guidance have actually evolved over time. These companies stay upgraded with the current changes and make sure that your filings abide by the most present standards. They can likewise offer continuous support if the internal revenue service demands extra info or performs an audit related to your ERC claim.
It is essential to research study and veterinarian any company using ERC filing support to ensure their reliability and competence. Look for established companies with experience in tax and payroll services, or think about reaching out to relied on accounting firms or tax experts who offer ERC filing assistance.
Bear in mind that while these companies can supply valuable help, it’s constantly an excellent concept to have a fundamental understanding of the ERC requirements and process yourself. This will help you make notified 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 procedures. The objective of the ERC is to motivate businesses to keep and pay their workers during the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to eligible companies, consisting of for-profit companies, tax-exempt companies, and certain governmental entities. To certify, employers should satisfy one of two requirements:.
The business operations were completely or partly suspended due to a government order related to COVID-19.
Business experienced a substantial decline in gross invoices. As discussed previously, for 2021, a substantial decrease is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019, or a 20% decline in gross receipts compared to the instantly 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 incomes paid to workers, consisting of certain health insurance expenditures. The optimum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, companies that got an Income Protection Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 allows services to declare the ERC even if they got a PPP loan. The very same salaries can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and enhanced, enabling eligible employers to claim the credit for qualified salaries paid as far back as March 13, 2020. This retroactive provision supplies an opportunity for services to change prior-year tax returns and get refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their employment tax returns, typically Kind 941. The excess can be reimbursed to the employer if the credit goes beyond the quantity of work taxes owed.
It is necessary to note that the ERC provisions and eligibility criteria have developed in time. The best course of action is to speak with a tax professional or visit the official internal revenue service site for the most in-depth and up-to-date information concerning the ERC, including any current legal changes or updates.
To receive the ERC, a company needs to fulfill among the following criteria:.
Business operations were fully or partly suspended due to a federal government order related to COVID-19.
Business experienced a substantial decrease in gross receipts. For 2021, a substantial decrease is specified as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
The ERC is offered to companies of all sizes, consisting of tax-exempt organizations, but there are some exceptions. For instance, government entities and companies that received a PPP loan might have restrictions on claiming the credit.
The procedure for declaring the ERC involves finishing the required forms and including the credit on your employment tax return (normally Form 941). The exact time it requires to process the credit can differ based upon a number of factors, consisting of the complexity of your service and the workload of the internal revenue service. It’s advised to speak with a tax expert for assistance specific to your scenario.
There are several companies that can help with the process of claiming the ERC. Some popular companies that provide assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the details offered here is based on general knowledge and might not show the most current updates or modifications to the ERC. It is necessary to talk to a tax professional or go to the official IRS website for the most updated and accurate details concerning eligibility, claiming procedures, and available help.
Less than 100. If the employer had 100 or fewer staff members typically in 2019, then the credit is based.
on incomes paid to all staff members whether they really worked or not. Simply put, even if the.
staff members 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.
enabled just for earnings paid to employees who did not work throughout the calendar quarter.
In both cases, “earnings” includes not just money payments but likewise a part of the cost of employer.
offered healthcare. What Can Employee Retention Credit Be Used For
Employers can be immediately repaid for the credit by reducing the quantity of payroll taxes they.