Lets talk first about What Employees Qualify For Employee Retention Credit :
Our group here what do these guys doing everyone in this room is helping teach individuals about ERC and uh constantly offer a gorgeous breakfast and have people truly learn more about the program we ought to head to the space where we have the ability to display a few of the checks that we are getting for companies and I ‘d like to see that what is this this is uh hundreds of countless dollars actually Kevin hundreds of millions of dollars so these are duplicate copies of the letters that go to clients validating that the check is on the way I indicate you understand if you just start 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 suggest it’s just I imply think about how many actual customers that went through the program yeah this is the very end this is the celebration at the end when the check is confirmed the numbers are confirmed and the check is on the mail in the mail from the internal revenue service 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 gone for sure and that’s when they pay so they do not pay anything till they really receive 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 checking account and they can truly trust Wonder trust that the process has actually been ended up and how many you believe you’ve processed considering that you began this we’re about 35 000 of these for
about six billion dollars wow so clearly they understand what they’re doing and that’s what you require 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 Terrific here you’re at my YouTube channel we’re discussing something truly important today the worker retention credit which the majority of you have actually never heard of I certainly hadn’t become aware of it until extremely recently and discovered a lot about it because this is most likely the most affordable expense of capital for any small business anywhere
anytime if you have staff members in 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 biggest processor of these ERC credits this is a 170 page program so it’s not easy this isn’t like PPP we just contact your bank manager 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 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 developed the cares Act and the cares act used companies three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everybody it makes a big distinction right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
fix the money cash payroll tax refund fine go on sorry I just need to make sure we got that point I imply that’s a huge difference a loan versus cash cash I like money 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 original cares Act is the ERC and yes Kevin it is a beautiful tough check in the mail where you get actual cash 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 staff member retention credit that individual had to be an employee so I’m going to make the Presumption this cash 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 company however it’s based on 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 eligible so you have to be on payroll in 2020 on the W-2 and you have to be on payroll for the very first six months of 2021 on the W-2 correct so there were six quarters the program was open well walk us through the six quarters so you had quarters two 3 and 4 of 2020 and you had quarters one 2 and three of 2021. okay so that’s how it’s measured you need to be on the W-2 during that duration now let’s talk my preferred part money 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 specific Kevin is 50 of the staff member’s wage to a maximum of 5 thousand dollars per staff member for the year of 2020 and in 2021 the numbers escalated to 70 of the staff member’s income to a maximum of 7 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 as much as 5 thousand Max and then what takes place 21 000 Max in 2021 oh that’s how you come up with twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per worker that is since that’s a lot of money it is now there’s a caution here the PPP money would have to be reduced from the twenty six thousand dollars so if you took PPP loan one and PPP loan two 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 workers and you took PPP money you would still get a million dollar in the mail from the IRS so it’s huge obviously now the big question is why does nobody know about this due to the fact that look when I initially heard about this when I initially met Josh you know I have actually got great deals of financial investments in lots of business I’m a major advocate for entrepreneurship in America and make lots of numerous financial investments in entrepreneurs of which many suffered through the pandemic when I initially became aware of this I called BS I don’t believe it since I utilize the PPP we went through the money 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 wisely to stay alive throughout the pandemic so when I found out about this I said nah it can’t be true but when I dug around I even called to my political leader pals Governor Senators they didn’t know about it I mean that’s how you know that’s how false information is that there’s no information out there then a lot of individuals informed me well you can’t get it since you took the PPP also not real so let’s ask Josh why does no one learn about the employee retention credit you know what’s intriguing 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 turmoil because keep in mind in the original cares act you might refrain from doing both programs so if you had actually done PPP you might not do ERC in the original 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 federal government never made it clear to anybody about how to.
do this does your CFO understand how to do this not truly he or she’s never ever done it previously do the banks do it nope the banks do not do it the payroll companies yeah a few of them are doing it as a payroll business your accounting professional no your accounting professional’s never ever done this prior to unless you have an account that entered into this organization and bottom line my company Kevin has stayed in business considering that 2009 and we’ve been dealing with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 business so a great deal of our big huge corporate clients have actually dealt with bottom line to recover other government programs we have actually 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 federal government programs.
The employee retention tax credit is a broad based refundable tax credit developed to encourage.
companies to keep staff members on their payroll. The credit is 50% of as much as $10,000 in wages paid by an.
Since of COVID-19 or whose gross invoices, company whose business is completely or partially suspended.
decrease by more than 50%.
1. The credit is readily available to all companies despite size including tax exempt companies. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
companies who take Small Business Loans.
2. To certify, the employer needs to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s service is fully or partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the company’s gross invoices are listed below 50% of the equivalent quarter in 2019. When the.
employer’s gross receipts go above 80% of a similar quarter in 2019 they no longer qualify.
after completion 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 is effective for incomes paid after March 13th and prior to December 31, 2020.
The meaning of certifying salaries differs by whether an employer had, typically, basically than.
100 staff members in 2019.
Companies that focus on ERC filing help typically supply competence and assistance to help companies navigate the complicated process of declaring the credit. They can use different services, consisting of:.
How is the employee retention credit calculated? What Employees Qualify For Employee Retention Credit
Eligibility Assessment: These business will evaluate your company’s eligibility for the ERC based upon elements such as your market, profits, and operations. If you fulfill the requirements for the credit and recognize the optimum credit amount you can claim, they can assist figure out.
Documentation and Calculation: ERC filing services will help in gathering the needed paperwork, such as payroll records and monetary declarations, to support your claim. They will likewise help calculate the credit amount based on qualified salaries and other qualifying costs.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for prior quarters, these business can evaluate your past payroll records and financials to identify possible chances for retroactive credits. They can help you amend previous tax returns to claim these refunds.
Filing Assistance: Companies focusing on ERC filings will prepare and submit the needed kinds and paperwork in your place. This includes completing Type 941 or any other required tax forms.
Compliance and Updates: ERC policies and assistance have actually evolved in time. These business remain updated with the current modifications and make sure that your filings abide by the most current standards. They can likewise supply ongoing assistance if the IRS demands additional info or carries out an audit related to your ERC claim.
It is necessary to research study and vet any business providing ERC filing help to ensure their credibility and proficiency. Search for established companies with experience in tax and payroll services, or consider connecting to relied on accounting firms or tax professionals who offer ERC submitting assistance.
Keep in mind that while these companies can supply important assistance, it’s constantly an excellent idea to have a standard understanding of the ERC requirements and procedure yourself. This will assist you make notified choices and ensure accurate filings.
The Worker 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 services to retain and pay their workers throughout the pandemic, even if their operations have been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to qualified companies, including for-profit services, tax-exempt organizations, and certain governmental entities. To certify, employers should fulfill one of two criteria:.
Business operations were totally or partly suspended due to a government order related to COVID-19.
The business experienced a significant decline in gross invoices. As mentioned previously, for 2021, a substantial decline is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a significant decrease 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 immediately preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity is equal to a portion (approximately 70%) of certified wages paid to employees, consisting of specific health insurance costs. 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, companies that got an Income Defense Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 enables organizations to claim the ERC even if they got a PPP loan. Nevertheless, the exact same wages can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and enhanced, allowing qualified companies to claim the credit for certified salaries paid as far back as March 13, 2020. This retroactive arrangement supplies a chance for organizations to change prior-year income tax return and receive refunds.
Claiming the Credit: Companies can declare the ERC by reporting it on their work income tax return, generally Kind 941. If the credit goes beyond the amount of work taxes owed, the excess can be refunded to the employer.
It is essential to keep in mind that the ERC provisions and eligibility requirements have developed in time. The best strategy is to talk to a tax expert or check out the official internal revenue service website for the most in-depth and updated details regarding the ERC, including any current legal changes or updates.
To qualify for the ERC, an organization should satisfy among the following criteria:.
Business operations were completely or partially suspended due to a federal government order related to COVID-19.
The business experienced a substantial decrease in gross receipts. For 2021, a considerable decrease is specified as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the right away preceding quarter.
The ERC is available to services of all sizes, consisting of tax-exempt companies, however there are some exceptions. Government entities and services that got a PPP loan might have constraints on declaring the credit.
The procedure for claiming the ERC involves finishing the essential forms and consisting of the credit on your employment income tax return (normally Type 941). The exact time it takes to process the credit can vary based upon a number of elements, consisting of the complexity of your service and the workload of the IRS. It’s advised to consult with a tax expert for assistance particular to your circumstance.
There are several business that can assist with the procedure of claiming the ERC. These consist of accounting firms, tax advisory services, and payroll provider. Some popular companies that provide help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research and contact these business directly to inquire about their services and charges.
Please keep in mind that the details offered here is based on basic knowledge and might not show the most current updates or changes to the ERC. It is essential to seek advice from a tax expert or visit the main internal revenue service site for the most precise and updated info regarding eligibility, declaring treatments, and offered help.
Less than 100. If the company had 100 or fewer workers on average in 2019, then the credit is based.
on earnings paid to all staff members 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. The credit is if the company had more than 100 employees on average in 2019.
allowed just for earnings paid to staff members who did not work during the calendar quarter.
In both cases, “wages” consists of not simply cash payments however also a portion of the expense of employer.
supplied healthcare. What Employees Qualify For Employee Retention Credit
Companies can be right away compensated for the credit by reducing the amount of payroll taxes they.