Lets talk first about What Is The Benefit Of The 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 beautiful breakfast and have people really learn about the program we need to head to the space where we have the ability to show some of the checks that we are getting for business and I want to see that what is this this is uh hundreds of countless dollars literally Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to clients confirming that the check is on the way I mean you understand if you just begin to 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 indicate 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 party at the end when the check is verified the numbers are validated 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 know when you
receive this you understand the check is gone for sure which’s when they pay so they do not pay anything up until they actually get the cash they do not pay bottom line Wonder trust anything till this letter is verified the check is on the way they transfer it into their bank account and they can truly rely on 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 6 billion dollars wow so clearly they know what they’re doing which’s what you require you require experts 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 Wonderful here you’re at my YouTube channel we’re speaking about something actually crucial today the employee retention credit which most of you have actually never become aware of I certainly had not heard of it until very just recently and discovered a lot about it since this is probably the most affordable expense of capital for any small company anywhere
anytime if you have employees between 5 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 Ideas they’re the largest processor of these ERC credits this is a 170 page program so it’s difficult this isn’t like PPP we just call your bank supervisor and say offer me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to inform all of us about it and how to get it and why I have actually ended up being yes the Ambassador and paid representative for this I love 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 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 practically 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.
fix the money cash payroll tax refund all right go on sorry I simply have to make certain we got that point I mean that’s a huge distinction a loan versus cash money 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 original cares Act is the ERC and yes Kevin it is a lovely difficult check in the mail where you get actual money from the IRS all right so let’s speak about how it works because it sounds 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 Assumption this cash is not for the owner not for individuals on the cap table not for investors it’s for staff members right you had to have actually owned an organization but it’s based on you having W-2 staff members 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 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 2 and three of 2021. fine so that’s how it’s determined you have to be on the W-2 during that duration now let’s talk my favorite part cash how much can you get back per worker that was on a W-2 in those six quarters so the calculation in 2020 to be specific Kevin is 50 of the employee’s income to a maximum of 5 thousand dollars per staff member for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the worker’s wage to a maximum of 7 thousand per quarter how did that happen um they just altered the rules in.
2021 versus because 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 up to five thousand Max and after that 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 worker that is since that’s a great deal of cash it is now there’s a caution here the PPP cash would have to be minimized from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would reduce 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 restaurant in New york city City where I’m from and you had a hundred employees and you took PPP cash you would still get a million dollar in the mail from the IRS so it’s huge undoubtedly now the huge question is why does nobody know about this due to the fact that look when I first became aware of this when I first satisfied Josh you know I have actually got lots of investments in great deals of companies I’m a major supporter for entrepreneurship in America and make many lots of financial investments in business owners of which numerous suffered through the pandemic when I initially found out about this I called BS I do not think it because I utilize the PPP we went through the cash 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 stay alive during the pandemic so when I found out about this I said nah it can’t hold true however when I dug around I even contacted us to my politician pals Guv Senators they didn’t know about it I mean that’s how you understand that’s how false information is that there’s no info out there then a bunch 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 know about the worker retention credit you know what’s fascinating you’re talking about the banks Kevin due to the fact that in the PPP loan procedure the federal government made it very 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 procedure 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 due to the fact that remember in the original cares act you might not do both programs so if you had done PPP you might not do 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 government never made it clear to any person about how to.
do this does your CFO know how to do this not really she or he’s never ever done it in the past do the banks do it nope the banks do not do it the payroll business yeah a few of them are doing it as a payroll business your accountant no your accountant’s never ever done this prior to unless you have an account that went into this organization and bottom line my firm Kevin has actually stayed in business because 2009 and we’ve been dealing with the federal government and the state government to recuperate money for Fortune 500 Fortune 1000 companies so a great deal of our huge huge corporate clients have dealt with bottom line to recuperate other federal government programs we’ve done sales tax and use tax unemployment tax work opportunity tax credits research and development tax credits unclaimed home property tax all of these other government programs.
The staff member retention tax credit is a broad based refundable tax credit developed to motivate.
companies to keep workers on their payroll. The credit is 50% of up to $10,000 in wages paid by an.
Since of COVID-19 or whose gross receipts, employer whose service is totally or partially suspended.
decline by more than 50%.
1. The credit is available to all employers despite size including tax exempt companies. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
companies who take Small company Loans.
2. To certify, the company needs to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s organization is totally or partly suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross invoices are below 50% of the equivalent quarter in 2019. Once the.
employer’s gross invoices exceed 80% of a similar quarter in 2019 they no longer certify.
after the end of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the certifying earnings paid up to $10,000 in overall.
It is effective for wages paid after March 13th and prior to December 31, 2020.
The meaning of qualifying salaries varies by whether an employer had, usually, basically than.
100 staff members in 2019.
Companies that concentrate on ERC filing help typically offer knowledge and assistance to help services navigate the complex process of claiming the credit. They can offer numerous services, including:.
How is the employee retention credit calculated? What Is The Benefit Of The Employee Retention Credit
Eligibility Assessment: These business will examine your organization’s eligibility for the ERC based on elements such as your market, earnings, and operations. They can help determine if you fulfill the requirements for the credit and determine the maximum credit quantity you can claim.
Documents and Estimation: ERC filing services will help in collecting the needed documentation, such as payroll records and monetary statements, to support your claim. They will also assist compute the credit amount based on eligible incomes and other qualifying costs.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for previous quarters, these companies can examine your previous payroll records and financials to determine potential opportunities for retroactive credits. They can help you modify prior income tax return to declare these refunds.
Filing Help: Business specializing in ERC filings will prepare and send the required kinds and documentation in your place. This consists of finishing Form 941 or any other necessary tax return.
Compliance and Updates: ERC policies and assistance have actually developed over time. These business remain upgraded with the current changes and make sure that your filings abide by the most current standards. If the Internal revenue service requests extra details or performs an audit associated to your ERC claim, they can also supply ongoing assistance.
It’s important to research and vet any company offering ERC filing help to guarantee their credibility and proficiency. Search for recognized companies with experience in tax and payroll services, or think about reaching out to relied on accounting firms or tax professionals who offer ERC submitting assistance.
Keep in mind that while these business can provide valuable assistance, it’s constantly a good idea to have a standard understanding of the ERC requirements and procedure yourself. This will assist 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 steps. The objective of the ERC is to encourage organizations to keep 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 offered to eligible employers, including for-profit organizations, tax-exempt organizations, and certain governmental entities. To certify, companies must fulfill one of two criteria:.
The business operations were completely or partially suspended due to a federal government order related to COVID-19.
Business experienced a significant decline in gross invoices. As discussed earlier, for 2021, a substantial decline is specified as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019, or a 20% decline 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 quantity amounts to a percentage (up to 70%) of certified incomes paid to employees, including specific health plan expenditures. The optimum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, companies that received an Income Defense Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 permits businesses to claim the ERC even if they got a PPP loan. The very same salaries can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and improved, enabling qualified companies to claim the credit for certified incomes paid as far back as March 13, 2020. This retroactive arrangement provides an opportunity for businesses to modify prior-year tax returns and get refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their work tax returns, normally Kind 941. The excess can be refunded to the company if the credit goes beyond the quantity of employment taxes owed.
It is necessary to keep in mind that the ERC provisions and eligibility criteria have evolved with time. The very best strategy is to consult with a tax professional or visit the main internal revenue service website for the most up-to-date and in-depth info concerning the ERC, consisting of any recent legal modifications or updates.
To qualify for the ERC, a business should satisfy among the following requirements:.
Business operations were fully or partly suspended due to a government order related to COVID-19.
Business experienced a considerable decrease in gross invoices. For 2021, a substantial decrease is specified as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decline in gross invoices compared to the right away preceding quarter.
The ERC is readily available to services of all sizes, including tax-exempt organizations, however there are some exceptions. For example, government entities and businesses that got a PPP loan might have restrictions on declaring the credit.
The procedure for claiming the ERC involves finishing the essential types and including the credit on your employment tax return (typically Type 941). The exact time it takes to process the credit can differ based upon a number of factors, including the complexity of your organization and the work of the IRS. It’s suggested to consult with a tax expert for assistance particular to your scenario.
There are a number of business that can aid with the procedure of declaring the ERC. These consist of accounting firms, tax advisory services, and payroll company. Some popular business that provide help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research study and contact these companies directly to inquire about their services and costs.
Please note that the details provided here is based upon basic knowledge and may not show the most recent updates or changes to the ERC. It is necessary to seek advice from a tax expert or go to the main IRS website for the most precise and current information relating to eligibility, declaring treatments, and offered help.
Less than 100. If the employer had 100 or less staff members typically in 2019, then the credit is based.
on incomes 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 company still gets the credit.
Greater than 100. The credit is if the employer had more than 100 staff members on average in 2019.
enabled only for salaries paid to workers who did not work during the calendar quarter.
In both cases, “incomes” includes not simply cash payments but also a portion of the cost of company.
offered healthcare. What Is The Benefit Of The Employee Retention Credit
Employers can be instantly repaid for the credit by minimizing the amount of payroll taxes they.