Lets talk first about Who Can Get Employee Retention Credit :
Our team here what do these guys doing everybody in this room is helping teach individuals about ERC and uh constantly offer a beautiful breakfast and have individuals truly learn about the program we ought to head to the room where we have the ability to display a few 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 actually Kevin hundreds of countless dollars so these are duplicate copies of the letters that go to clients confirming that the check is on the way I indicate you understand if you just begin to take a look at some of these here I imply this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I imply it’s just I mean consider the number of real 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 understand when you
receive this you understand the check is chosen sure which’s when they pay so they do not pay anything till they actually receive the cash they don’t pay bottom line Wonder trust anything up until this letter is validated the check is on the method they transfer it into their checking account and they can genuinely trust Wonder trust that the procedure has actually been finished and the number of you think you have actually processed since you started this we have to do with 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 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 Wonderful here you’re at my YouTube channel we’re talking about something actually crucial today the employee retention credit which most of you have actually never ever heard of I certainly had not heard of it till really recently and found out a lot about it because this is most likely the lowest expense of capital for any small company anywhere
anytime if you have workers between 5 and five hundred so I have actually got the expert 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 hard this isn’t like PPP we simply call your bank supervisor and say 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 ended up being yes the Ambassador and paid spokesperson for this I enjoy this program it’s going away soon you got to discover all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply begin there so throughout the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act provided businesses three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically 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.
fix the money money payroll tax refund fine go on sorry I just have to make certain we got that point I indicate that’s a big difference a loan versus cash money 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 gorgeous hard check in the mail where you get actual money from the IRS 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 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 needed to have actually 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 staff members 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 appropriate so there were 6 quarters the program was open well stroll us through the six quarters so you had quarters two three and four of 2020 and you had quarters one two and three of 2021. okay so that’s how it’s measured you have to be on the W-2 throughout that duration now let’s talk my favorite part cash just how much can you get back per staff member that was on a W-2 in those six quarters so the computation in 2020 to be precise Kevin is 50 of the staff member’s salary to a maximum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers escalated to 70 of the employee’s wage to a maximum of 7 thousand per quarter how did that occur um they just changed the rules in.
2021 versus due to the fact that the turmoil 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 happens 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 staff member that is since that’s a great deal of cash it is now there’s a caveat here the PPP cash would need to be minimized 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 somewhere around ten 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 staff members and you took PPP money you would still get a million dollar in the mail from the IRS so it’s substantial clearly now the huge concern is why does nobody understand about this since look when I first heard about this when I first satisfied Josh you understand I have actually got lots of investments in lots of companies I’m a major advocate for entrepreneurship in America and make many numerous investments in business owners of which many suffered through the pandemic when I first became aware of 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 really easy to do we had our CEOs call the banks they got their loans and that were well should have and we used them sensibly to stay alive throughout the pandemic so when I heard about this I stated nah it can’t hold true but when I dug around I even called to my politician friends Guv Senators they didn’t understand about it I indicate that’s how you know that’s how false information is that there’s no details out there then a bunch of individuals told me well you can’t get it since you took the PPP likewise not real so let’s ask Josh why does nobody learn about the worker retention credit you know what’s interesting you’re speaking about the banks Kevin because 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 nation and they would process procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply process process that’s all um and here there was turmoil due to the fact that remember in the initial cares act you could refrain from doing both programs so if you had actually done PPP you could refrain from doing ERC in the original program and when they altered the law in 2021 the banks were not doing ERC since it’s not alone so you’re getting a tax refund so the federal 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 before do the banks do it nope the banks do not do it the payroll companies yeah some of them are doing it as a payroll company your accountant no your accounting professional’s never ever done this prior to unless you have an account that went into this business and bottom line my company Kevin has actually been in business given that 2009 and we’ve been dealing 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 customers have dealt with bottom line to recover other government programs we’ve done sales tax and use tax unemployment tax work opportunity tax credits research and development tax credits unclaimed property property tax all of these other federal 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 incomes paid by an.
company whose company is fully or partly suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is offered to all companies regardless of size including tax exempt companies. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
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 employer’s service is completely or partly suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross receipts 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 qualify.
after the end of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the qualifying wages paid up to $10,000 in total.
It is effective for incomes paid after March 13th and prior to December 31, 2020.
The definition of qualifying earnings differs by whether a company had, usually, basically than.
100 workers in 2019.
Companies that specialize in ERC filing support generally offer knowledge and assistance to assist companies navigate the complex procedure of declaring the credit. They can offer different services, consisting of:.
How is the employee retention credit calculated? Who Can Get Employee Retention Credit
Eligibility Assessment: These companies will assess your service’s eligibility for the ERC based upon elements such as your market, profits, and operations. If you fulfill the requirements for the credit and determine the maximum credit quantity you can claim, they can help identify.
Documents and Estimation: ERC filing services will assist in gathering the required documentation, such as payroll records and monetary statements, to support your claim. They will also assist determine the credit amount based upon eligible wages and other qualifying expenses.
Retroactive Claim Review: If you are qualified to claim the ERC for prior quarters, these business can evaluate your previous payroll records and financials to recognize potential chances for retroactive credits. They can help you amend prior tax returns to claim these refunds.
Filing Assistance: Companies concentrating on ERC filings will prepare and send the required kinds and documentation in your place. This includes completing Form 941 or any other necessary tax forms.
Compliance and Updates: ERC policies and assistance have developed with time. These business stay upgraded with the latest changes and guarantee that your filings adhere to the most present standards. They can likewise provide ongoing support if the internal revenue service requests additional info or conducts an audit related to your ERC claim.
It’s important to research study and veterinarian any business offering ERC filing assistance to ensure 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 experts who use ERC submitting support.
Keep in mind that while these business can offer important help, it’s constantly a good idea to have a fundamental understanding of the ERC requirements and procedure yourself. This will help you make informed 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 steps. The goal of the ERC is to motivate companies to maintain and pay their staff members throughout the pandemic, even if their operations have actually been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is available to qualified companies, including for-profit companies, tax-exempt companies, and specific governmental entities. To certify, employers need to satisfy one of two requirements:.
Business operations were fully or partly suspended due to a government order related to COVID-19.
The business experienced a substantial decline in gross invoices. As mentioned previously, for 2021, a considerable decrease is specified as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decline in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross invoices 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 amounts to a portion (approximately 70%) of certified salaries paid to employees, including particular health insurance expenses. The optimum credit per staff member is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, services that received a Paycheck Security Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 permits businesses to declare the ERC even if they got a PPP loan. The same incomes can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and improved, permitting eligible employers to claim the credit for qualified earnings paid as far back as March 13, 2020. This retroactive arrangement supplies a chance for organizations to modify prior-year income tax return and get refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their work tax returns, typically Kind 941. The excess can be refunded to the employer if the credit goes beyond the quantity of work taxes owed.
It is essential to keep in mind that the ERC arrangements and eligibility requirements have progressed in time. The best strategy is to talk to a tax expert or check out the main IRS site for the most in-depth and up-to-date information concerning the ERC, including any recent legislative changes or updates.
To qualify for the ERC, a company needs to meet one of the following requirements:.
Business operations were fully or partially suspended due to a federal government order related to COVID-19.
Business experienced a significant decrease in gross invoices. For 2021, a considerable decrease is specified as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a considerable decrease is specified as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decline in gross invoices compared to the instantly preceding quarter.
The ERC is available to services of all sizes, consisting of tax-exempt companies, but there are some exceptions. For example, federal government entities and companies that got a PPP loan may have constraints on declaring the credit.
The process for claiming the ERC includes finishing the essential forms and including the credit on your work tax return (usually Type 941). The exact time it requires to process the credit can vary based on numerous factors, consisting of the complexity of your service and the work of the internal revenue service. It’s advised to speak with a tax professional for assistance specific to your circumstance.
There are several business that can help with the procedure of claiming the ERC. Some well-known companies that offer assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the information offered here is based upon general understanding and may not reflect the most recent updates or changes to the ERC. It is essential to speak with a tax professional or go to the official IRS website for the most current and precise information concerning eligibility, claiming procedures, and available assistance.
Less than 100. The credit is based if the employer had 100 or fewer employees on average in 2019.
on salaries paid to all workers whether they really worked or not. To put it simply, even if the.
workers worked full time and made money for full time work, the employer still gets the credit.
Greater than 100. The credit is if the company had more than 100 staff members on average in 2019.
permitted just for incomes paid to workers who did not work during the calendar quarter.
In both cases, “earnings” includes not simply cash payments but also a part of the cost of employer.
provided healthcare. Who Can Get Employee Retention Credit
Employers can be instantly reimbursed for the credit by minimizing the amount of payroll taxes they.