Lets talk first about What Is The New Employee Retention Credit :
Our group here what do these guys doing everyone in this space is assisting teach individuals about ERC and uh always supply a stunning breakfast and have individuals actually learn more about the program we need to head to the room where we have the ability to display some of the checks that we are getting for business and I ‘d like to see that what is this this is uh hundreds of millions of dollars literally Kevin hundreds of millions of dollars so these are duplicate copies of the letters that go to customers verifying that the check is on the method I mean you know if you simply start to take a look at a few of these here I indicate this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I imply it’s simply I indicate consider how many actual clients that went through the program yeah this is the very end this is the party at the end when the check is confirmed the numbers are validated and the check is on the mail in the mail from the internal revenue service heading to the customer so that’s how you have the ability to track it you know when you
receive this you know the check is chosen sure which’s when they pay so they do not pay anything until they really get the money they do not pay bottom line Wonder trust anything until this letter is confirmed the check is on the method they transfer it into their bank account and they can genuinely trust Wonder trust that the process has actually been ended up and how many you believe you have actually processed because you started this we have to do with 35 000 of these for
about 6 billion dollars wow so clearly they know 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 among 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 employee retention credit which most of you have actually never ever become aware of I definitely had not become aware of it up until extremely just recently and found out a lot about it because this is most likely the most affordable expense of capital for any small business anywhere
anytime if you have workers between 5 and five hundred so I have actually got the professional with me this is Josh Fox he’s the creator and CEO of bottom line Concepts they’re the biggest processor of these ERC credits this is a 170 page program so it’s difficult this isn’t like PPP we just contact your bank supervisor and say provide me a loan it doesn’t 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 become yes the Ambassador and paid representative for this I enjoy this program it’s going away soon you got to discover all about it let’s talk worker retention credit Josh Fox what is an ERC let’s simply begin there so throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act offered companies three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everyone it makes a huge distinction right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the money money payroll tax refund all right go on sorry I just have to ensure we got that point I indicate that’s a big difference a loan versus cash money I like cash money that’s what we’re discussing 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 gorgeous tough check in the mail where you get actual money from the internal revenue service all right so let’s discuss how it works due to the fact that it seems like to me if it’s a if it’s employee retention credit that person had to be a worker so I’m going to make the Assumption this money is not for the owner not for people on the cap table not for investors it’s for workers right you needed to have owned an organization but it’s based upon you having W-2 staff members in America not 10.99. so as long as you had W-2 staff members and you paid federal payroll taxes that’s why you would be eligible so you need to be on payroll in 2020 on the W-2 and you need to be on payroll for the first 6 months of 2021 on the W-2 correct so there were 6 quarters the program was open well stroll us through the 6 quarters so you had quarters two three and 4 of 2020 and you had quarters one two and 3 of 2021. fine so that’s how it’s measured you need to be on the W-2 during that duration now let’s talk my favorite part money how much can you get back per employee that was on a W-2 in those six quarters so the calculation in 2020 to be precise Kevin is 50 of the employee’s income to a maximum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the worker’s salary to an optimum of 7 thousand per quarter how did that take place um they simply changed the rules in.
2021 versus because the turmoil of the pandemic so they wished to even get more to keep those staff members 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 after that what occurs 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 since that’s a great deal of cash it is now there’s a caveat here the PPP money would need to be minimized from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would lower the 26 000 so what we’re seeing typically Kevin is if you took PPP money somewhere around 10 thousand dollars an individual so let’s state hypothetically you owned a dining establishment in New York 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 clearly now the huge concern is why does nobody know about this since appearance when I initially found out about this when I first fulfilled Josh you understand I have actually got great deals of financial investments in great deals of companies I’m a major supporter for entrepreneurship in America and make lots of numerous financial investments in business owners of which many suffered through the pandemic when I initially found out about this I called BS I do not believe it since I use 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 and that were well been worthy of and we used them wisely to survive throughout the pandemic so when I heard about this I said nah it can’t be true but when I dug around I even contacted us to my politician good friends Governor Senators they didn’t understand about it I suggest that’s how you understand that’s how misinformation is that there’s no details out there then a lot of individuals told me well you can’t get it since you took the PPP also not true so let’s ask Josh why does nobody understand about the staff member retention credit you know what’s intriguing you’re discussing the banks Kevin since in the PPP loan procedure 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 big 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 chaos 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 original program and when they altered the law in 2021 the banks were not doing ERC because it’s not alone so you’re getting a tax refund so the government never ever made it clear to any person about how to.
do this does your CFO understand how to do this not truly 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 a few of them are doing it as a payroll company your accounting professional no your accountant’s never done this prior to unless you have an account that entered into this company 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 government to recover money for Fortune 500 Fortune 1000 business so a lot of our huge huge business clients have worked with bottom line to recover other federal government programs we’ve done sales tax and utilize tax joblessness tax work opportunity tax credits research and development tax credits unclaimed home real estate tax all of these other government programs.
The worker retention tax credit is a broad based refundable tax credit developed to encourage.
employers to keep staff members on their payroll. The credit is 50% of as much as $10,000 in incomes paid by an.
Due to the fact that of COVID-19 or whose gross receipts, company whose company is totally or partly suspended.
decline by more than 50%.
Schedule.
1. The credit is available to all employers regardless of size consisting of tax exempt organizations. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
organizations who take Small Business Loans.
2. To certify, the employer has to satisfy one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s service is totally or partially suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross receipts are below 50% of the equivalent quarter in 2019. When the.
company’s gross receipts exceed 80% of an equivalent quarter in 2019 they no longer certify.
after completion of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the certifying salaries paid up to $10,000 in total.
It works for earnings paid after March 13th and before December 31, 2020.
The meaning of qualifying incomes differs by whether an employer had, on average, more or less than.
100 staff members in 2019.
Companies that concentrate on ERC filing help generally supply know-how and assistance to help companies navigate the intricate procedure of claiming the credit. They can use numerous services, consisting of:.
How is the employee retention credit calculated? What Is The New Employee Retention Credit
Eligibility Assessment: These companies will examine your service’s eligibility for the ERC based on factors such as your market, earnings, and operations. They can assist figure out if you fulfill the requirements for the credit and identify the optimum credit quantity you can declare.
Documentation and Computation: ERC filing services will help in collecting the essential paperwork, such as payroll records and financial declarations, to support your claim. They will likewise help compute the credit amount based upon qualified wages and other qualifying expenditures.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for prior quarters, these companies can evaluate your past payroll records and financials to determine prospective opportunities for retroactive credits. They can assist you modify previous tax returns to claim these refunds.
Filing Support: Business concentrating on ERC filings will prepare and send the essential types and documentation on your behalf. This includes finishing Kind 941 or any other required tax forms.
Compliance and Updates: ERC guidelines and assistance have actually developed in time. These companies stay updated with the most recent changes and guarantee that your filings abide by the most current standards. If the Internal revenue service requests extra details or conducts an audit related to your ERC claim, they can likewise supply continuous support.
It is necessary to research and veterinarian any business offering ERC filing assistance to guarantee their trustworthiness and competence. Look for established companies with experience in tax and payroll services, or think about reaching out to relied on accounting companies or tax experts who offer ERC filing support.
Bear in mind that while these business can supply valuable help, it’s always an excellent idea to have a standard understanding of the ERC requirements and process yourself. This will assist you make notified decisions and guarantee precise filings.
The Worker Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief procedures. The goal of the ERC is to encourage organizations to retain and pay their workers during the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to qualified employers, including for-profit services, tax-exempt organizations, and certain governmental entities. To qualify, companies must meet one of two criteria:.
Business operations were totally or partially suspended due to a federal government order related to COVID-19.
Business experienced a significant decrease in gross receipts. As mentioned previously, for 2021, a significant decrease is specified as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a substantial decline is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decline in gross invoices compared to the right away 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 (as much as 70%) of qualified earnings paid to employees, including certain health plan 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, services that got a Paycheck Protection Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 enables companies to claim the ERC even if they got a PPP loan. However, the very same salaries can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and boosted, permitting qualified companies to declare the credit for certified incomes paid as far back as March 13, 2020. This retroactive provision supplies an opportunity for services to modify prior-year income tax return and get refunds.
Declaring the Credit: Employers can declare the ERC by reporting it on their work income tax return, generally Kind 941. The excess can be reimbursed to the company if the credit goes beyond the quantity of work taxes owed.
It is very important to note that the ERC provisions and eligibility criteria have actually evolved in time. The best strategy is to speak with a tax professional or go to the main internal revenue service website for the most current and comprehensive information concerning the ERC, consisting of any recent legislative modifications or updates.
To qualify for the ERC, a service should satisfy among the following criteria:.
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 considerable decline is defined as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decrease in gross invoices compared to the right away preceding quarter.
The ERC is offered to organizations of all sizes, including tax-exempt companies, however there are some exceptions. For instance, government entities and organizations that got a PPP loan may have limitations on claiming the credit.
The process for claiming the ERC involves finishing the required types and consisting of the credit on your employment tax return (generally Type 941). The exact time it requires to process the credit can vary based upon a number of aspects, consisting of the complexity of your service and the workload of the IRS. It’s suggested to seek advice from a tax expert for guidance particular to your circumstance.
There are several companies that can assist with the process of claiming the ERC. Some popular business that provide help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the info provided here is based on basic knowledge and might not reflect the most current updates or changes to the ERC. It is essential to consult with a tax professional or visit the main IRS website for the most updated and precise information regarding eligibility, claiming procedures, and available support.
Less than 100. The credit is based if the company had 100 or fewer workers on average in 2019.
on incomes paid to all staff members whether they actually worked or not. To put it simply, even if the.
employees worked full time and made money for full-time work, the employer still gets the credit.
Greater than 100. The credit is if the employer had more than 100 staff members on average in 2019.
permitted only for incomes paid to workers who did not work throughout the calendar quarter.
In both cases, “salaries” consists of not simply cash payments however also a part of the cost of company.
offered healthcare. What Is The New Employee Retention Credit
Payment.
Companies can be right away compensated for the credit by reducing the amount of payroll taxes they.