Lets talk first about When To Claim Employee Retention Credit :
Our group here what do these guys doing everyone in this room is helping teach individuals about ERC and uh always supply a lovely breakfast and have individuals truly learn about the program we ought to head to the room where we have the ability to display some of the checks that we are getting for business and I wish 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 clients verifying that the check is on the way I suggest you know if you just begin to look at a few of these here I imply this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I mean it’s just I imply think about 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 validated 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’re able to track it you know when you
receive this you know the check is chosen sure and that’s when they pay so they do not pay anything till they in fact receive the cash they do not pay bottom line Wonder trust anything till this letter is confirmed the check is on the method they deposit it into their savings account and they can really trust Wonder trust that the process has actually been completed and how many you believe you have actually processed considering that you began 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 need 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 Wonderful here you’re at my YouTube channel we’re speaking about something truly essential today the employee retention credit which the majority of you have actually never become aware of I definitely hadn’t heard of it until really recently and learned a lot about it because this is most likely the lowest expense of capital for any small company anywhere
anytime if you have employees in 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 Principles 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 call up your bank supervisor and say offer 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 love this program it’s disappearing soon you got to learn everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply start there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act used organizations three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost 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.
remedy the money cash payroll tax refund all right go on sorry I simply need to ensure we got that point I mean that’s a huge distinction a loan versus money cash I like money money that’s what we’re discussing 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 real money from the internal revenue service 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 staff member retention credit that individual needed to be an employee so I’m going to make the Presumption this money is not for the owner not for people on the cap table not for shareholders it’s for workers right you had to have actually owned a company but it’s based on you having W-2 employees 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 qualified so you need 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 appropriate so there were six quarters the program was open well walk us through the 6 quarters so you had quarters 2 3 and 4 of 2020 and you had quarters one two and 3 of 2021. fine so that’s how it’s determined you need to be on the W-2 throughout that period now let’s talk my favorite part money how much can you return per staff member that was on a W-2 in those six quarters so the computation in 2020 to be exact Kevin is 50 of the worker’s salary to an optimum of 5 thousand dollars per staff member for the year of 2020 and in 2021 the numbers escalated to 70 of the worker’s salary to an optimum of seven thousand per quarter how did that occur um they just changed the rules in.
2021 versus because the chaos 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 then what happens 21 000 Max in 2021 oh that’s how you create twenty 6 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 lot of money 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 decrease the 26 000 so what we’re seeing usually Kevin is if you took PPP money someplace around 10 thousand dollars an individual so let’s say hypothetically you owned a dining establishment in New York City where I’m from and you had a hundred staff members and you took PPP cash 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 no one understand about this due to the fact that look when I first heard about this when I initially met Josh you understand I’ve got great deals of investments in lots of business I’m a major supporter for entrepreneurship in America and make many lots of investments in business owners of which lots of suffered through the pandemic when I first heard about this I called BS I do not believe it since I utilize the PPP we went through the money 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 utilized them wisely to stay alive during the pandemic so when I found out about this I said nah it can’t hold true but when I dug around I even contacted us to my political leader pals Guv Senators they didn’t know about it I indicate that’s how you know that’s how misinformation is that there’s no details out there then a lot of people informed me well you can’t get it because you took the PPP also not real so let’s ask Josh why does nobody know about the staff member retention credit you understand what’s fascinating you’re speaking about the banks Kevin because in the PPP loan process the federal government made it extremely clear that if you desired 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 just process process that’s all um and here there was turmoil because keep in mind 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 changed the law in 2021 the banks were not doing ERC since 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 understand how to do this not actually she or he’s never 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 accountant no your accountant’s never done this before unless you have an account that went into this organization and bottom line my firm Kevin has actually stayed in business given that 2009 and we’ve been dealing with the federal government and the state federal government to recuperate money for Fortune 500 Fortune 1000 companies so a great deal of our big big corporate customers have actually dealt with bottom line to recuperate other federal government programs we’ve done sales tax and utilize tax joblessness tax work chance tax credits research and development tax credits unclaimed home property 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 up to $10,000 in wages paid by an.
Because of COVID-19 or whose gross invoices, employer whose company is fully or partially suspended.
decrease by more than 50%.
1. The credit is available to all companies regardless of size including tax exempt companies. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
services who take Small company Loans.
2. To certify, the company needs to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s service is totally or partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross invoices are below 50% of the similar quarter in 2019. Once the.
company’s gross invoices exceed 80% of a similar quarter in 2019 they no longer qualify.
after the end of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the certifying earnings paid up to $10,000 in overall.
It is effective for incomes paid after March 13th and prior to December 31, 2020.
The definition of qualifying earnings varies by whether a company had, on average, basically than.
100 employees in 2019.
Business that specialize in ERC filing help usually offer expertise and support to assist services navigate the complex procedure of claiming the credit. They can provide numerous services, consisting of:.
How is the employee retention credit calculated? When To Claim Employee Retention Credit
Eligibility Evaluation: These companies will assess your organization’s eligibility for the ERC based on factors such as your market, profits, and operations. If you meet the requirements for the credit and identify the optimum credit quantity you can claim, they can assist identify.
Documents and Estimation: ERC filing services will assist in gathering the required documents, such as payroll records and monetary declarations, to support your claim. They will also assist determine the credit amount based upon qualified incomes and other certifying expenditures.
Retroactive Claim Evaluation: If you are eligible to claim the ERC for prior quarters, these companies can evaluate your past payroll records and financials to recognize potential chances for retroactive credits. They can help you change previous income tax return to declare these refunds.
Filing Help: Business specializing in ERC filings will prepare and send the required types and paperwork on your behalf. This includes completing Kind 941 or any other required tax forms.
Compliance and Updates: ERC guidelines and assistance have developed over time. These companies remain upgraded with the current modifications and guarantee that your filings adhere to the most present standards. If the Internal revenue service demands extra information or performs an audit associated to your ERC claim, they can likewise offer continuous assistance.
It’s important to research study and veterinarian any company offering ERC filing help to guarantee their credibility and knowledge. Try to find recognized firms with experience in tax and payroll services, or consider connecting to trusted accounting firms or tax experts who use ERC filing support.
Remember that while these companies can supply important 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 choices and make sure accurate filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief procedures. The goal of the ERC is to encourage businesses to keep and pay their employees during the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to eligible companies, consisting of for-profit companies, tax-exempt organizations, and specific governmental entities. To qualify, employers should meet one of two criteria:.
Business operations were totally or partly suspended due to a federal government order related to COVID-19.
The business experienced a substantial decline in gross receipts. As mentioned previously, 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 substantial decline is defined as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the right away 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 (up to 70%) of certified incomes paid to employees, including certain health insurance costs. The optimum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, companies that received a Paycheck Defense Program (PPP) loan were not eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 allows companies to claim the ERC even if they received a PPP loan. Nevertheless, 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 enhanced, allowing qualified companies to declare the credit for certified incomes paid as far back as March 13, 2020. This retroactive provision provides an opportunity for companies to modify prior-year tax returns and get refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their work income tax return, generally Kind 941. The excess can be refunded to the company if the credit exceeds the amount of employment taxes owed.
It is necessary to keep in mind that the ERC arrangements and eligibility criteria have actually evolved over time. The best course of action is to talk to a tax professional or visit the main IRS site for the most updated and comprehensive information relating to the ERC, consisting of any recent legislative modifications or updates.
To qualify for the ERC, a service must fulfill one of the following criteria:.
Business operations were totally or partially suspended due to a federal government order related to COVID-19.
The business experienced a substantial decline in gross invoices. For 2021, a substantial decrease is specified as a 20% decrease 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 very same quarter in 2019, or a 20% decline in gross receipts compared to the right away preceding quarter.
The ERC is available to organizations 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 claiming the credit.
The process for declaring the ERC includes completing the necessary types and consisting of the credit on your employment tax return (normally Kind 941). The exact time it requires to process the credit can vary based upon several elements, including the intricacy of your company and the work of the IRS. It’s suggested to speak with a tax expert for assistance particular to your circumstance.
There are numerous companies that can assist with the process of declaring the ERC. These consist of accounting companies, tax advisory services, and payroll company. Some well-known business that offer assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research study and get in touch with these companies straight to ask about their services and charges.
Please note that the info provided here is based on basic knowledge and may not reflect the most current updates or changes to the ERC. It is essential to speak with a tax professional or go to the main IRS site for the most accurate and updated info concerning eligibility, declaring treatments, and available support.
Less than 100. If the company had 100 or less staff members on average in 2019, then the credit is based.
on incomes paid to all workers whether they really worked or not. To put it simply, even if the.
staff members worked full time and earned money for full-time work, the employer still gets the credit.
Greater than 100. The credit is if the employer had more than 100 employees on average in 2019.
allowed just for wages paid to employees who did not work throughout the calendar quarter.
In both cases, “incomes” includes not just money payments however also a part of the cost of company.
provided healthcare. When To Claim Employee Retention Credit
Companies can be right away compensated for the credit by reducing the quantity of payroll taxes they.