Lets talk first about Who Can Take The Employee Retention Credit :
Our group here what do these guys doing everyone in this space is helping teach people about ERC and uh constantly provide a stunning breakfast and have people actually find out 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 want to see that what is this this is uh hundreds of countless dollars literally Kevin hundreds of countless dollars so these are duplicate copies of the letters that go to customers validating that the check is on the method I imply you know if you simply begin to look at some of these here I mean this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I imply it’s just I imply 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 confirmed the numbers are verified 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
get 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 until this letter is confirmed the check is on the way they deposit it into their checking account and they can truly rely on Wonder trust that the process has been ended up and the number of you think you’ve processed considering that you began this we have to do with 35 000 of these for
about six billion dollars wow so plainly they know what they’re doing which’s what you require you require 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 Fantastic here you’re at my YouTube channel we’re discussing something really important today the staff member retention credit which the majority of you have actually never become aware of I certainly had not heard of it till very just recently and found out a lot about it since this is most likely the lowest expense of capital for any small business anywhere
anytime if you have employees between five and five hundred so I’ve got the specialist 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 just call up your bank supervisor and say give me a loan it doesn’t 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’ve become yes the Ambassador and paid spokesperson for this I enjoy this program it’s going away soon you got to find out everything about it let’s talk employee retention credit Josh Fox what is an ERC let’s just start there so throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act provided businesses 3 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 distinction right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the cash money payroll tax refund alright go on sorry I just have to make certain we got that point I mean that’s a big difference a loan versus money 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 beautiful difficult check in the mail where you get actual cash from the IRS all right so let’s speak about how it works because it seems like to me if it’s a if it’s staff member retention credit that individual needed to be a worker so I’m going to make the Assumption this money is not for the owner not for individuals on the cap table not for shareholders it’s for staff members right you needed to have actually owned a company however it’s based upon you having W-2 employees in America not 10.99. As long as you had W-2 workers 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 correct so there were 6 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 3 of 2021. okay so that’s how it’s measured you have to be on the W-2 throughout that period now let’s talk my preferred part money how much can you get back per staff member that was on a W-2 in those six quarters so the estimation in 2020 to be exact Kevin is 50 of the employee’s income to an optimum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the staff member’s income to a maximum of seven thousand per quarter how did that happen um they simply changed the rules in.
2021 versus since the mayhem of the pandemic so they wished to even get more to keep those employees on payroll 100 so if you can get 5 000 per person Max in twenty that was 50 in 2020 up to 5 thousand Max and then what occurs 21 000 Max in 2021 oh that’s how you create twenty 6 thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty 6 thousand dollars per employee that is because that’s a great deal of money it is now there’s a caveat here the PPP cash would need to be decreased from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would decrease the 26 000 so what we’re seeing on average Kevin is if you took PPP cash somewhere around 10 thousand dollars a person so let’s say hypothetically you owned a restaurant in New york city City where I’m from and you had a hundred workers and you took PPP cash you would still get a million dollar in the mail from the IRS so it’s substantial clearly now the big concern is why does no one know about this since look when I first found out about this when I first met Josh you know I have actually got great deals of financial investments in lots of business I’m a significant supporter for entrepreneurship in America and make many lots of financial investments in entrepreneurs of which many suffered through the pandemic when I initially found out about 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 extremely easy to do we had our CEOs call the banks they got their loans which were well deserved 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 political leader good friends Governor Senators they didn’t understand about it I suggest that’s how you understand that’s how false information is that there’s no information out there then a lot of individuals told me well you can’t get it since you took the PPP likewise not true so let’s ask Josh why does nobody understand about the worker retention credit you understand what’s interesting you’re talking about the banks Kevin due to the fact that 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 huge 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 just process process that’s all um and here there was chaos since remember in the initial cares act you could 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 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 understand how to do this not truly she or he’s never ever done it previously do the banks do it nope the banks don’t do it the payroll business yeah some of them are doing it as a payroll business your accounting professional no your accountant’s never done this before unless you have an account that entered into this service and bottom line my company Kevin has been in business because 2009 and we’ve been dealing with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 business so a lot of our big big business clients have dealt with bottom line to recover other government programs we have actually done sales tax and use tax unemployment tax work opportunity tax credits research and development tax credits unclaimed property real estate tax all of these other government programs.
The worker retention tax credit is a broad based refundable tax credit designed to encourage.
companies to keep staff members on their payroll. The credit is 50% of up to $10,000 in incomes paid by an.
company whose organization is totally or partially suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
1. The credit is offered to all employers no matter size consisting of tax exempt companies. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) little.
companies who take Small company Loans.
2. To certify, the company has to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s service is completely 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 comparable quarter in 2019. Once the.
company’s gross invoices exceed 80% of a similar quarter in 2019 they no longer qualify.
after completion of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the certifying wages paid up to $10,000 in total.
It works for wages paid after March 13th and before December 31, 2020.
The meaning of certifying wages differs by whether a company had, typically, more or less than.
100 employees in 2019.
Companies that concentrate on ERC filing assistance typically provide competence and support to assist services browse the intricate procedure of declaring the credit. They can offer various services, including:.
How is the employee retention credit calculated? Who Can Take The Employee Retention Credit
Eligibility Evaluation: These business will examine your organization’s eligibility for the ERC based upon factors such as your market, profits, and operations. They can help identify if you fulfill the requirements for the credit and identify the maximum credit amount you can claim.
Documentation and Computation: ERC filing services will assist in collecting the needed documentation, such as payroll records and financial statements, to support your claim. They will likewise help calculate the credit amount based upon qualified earnings and other certifying expenditures.
Retroactive Claim Review: If you are eligible to declare the ERC for previous quarters, these companies can examine your past payroll records and financials to determine prospective chances for retroactive credits. They can help you change prior income tax return to claim these refunds.
Filing Assistance: Companies focusing on ERC filings will prepare and submit the necessary kinds and documentation on your behalf. This consists of finishing Form 941 or any other necessary tax forms.
Compliance and Updates: ERC guidelines and assistance have evolved in time. These business stay upgraded with the latest changes and make sure that your filings comply with the most existing guidelines. They can likewise provide ongoing support if the IRS requests additional information or conducts an audit related to your ERC claim.
It is essential to research and veterinarian any company using ERC filing support to ensure their reliability and expertise. Search for established firms with experience in tax and payroll services, or consider connecting to relied on accounting companies or tax professionals who use ERC submitting assistance.
Remember that while these business can offer important support, it’s always an excellent concept to have a basic understanding of the ERC requirements and procedure yourself. This will help you make informed decisions and ensure accurate filings.
The Worker Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief steps. The goal of the ERC is to encourage businesses to maintain and pay their workers throughout the pandemic, even if their operations have actually been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to eligible companies, consisting of for-profit businesses, tax-exempt organizations, and specific governmental entities. To qualify, companies should meet one of two requirements:.
The business operations were fully or partially suspended due to a government order related to COVID-19.
The business experienced a significant decrease in gross receipts. 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 significant decline is specified 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 instantly preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit quantity amounts to a portion (as much as 70%) of certified earnings paid to staff members, including particular health insurance expenses. 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 got a Paycheck Protection Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 permits companies to declare the ERC even if they received a PPP loan. However, the exact same incomes can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and improved, allowing eligible companies to declare the credit for qualified salaries paid as far back as March 13, 2020. This retroactive arrangement offers a chance for businesses to amend prior-year tax returns and receive refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their employment tax returns, usually Type 941. The excess can be reimbursed to the company if the credit surpasses the quantity of work taxes owed.
It is necessary to note that the ERC arrangements and eligibility requirements have progressed in time. The very best course of action is to talk to a tax professional or visit the main internal revenue service website for the most up-to-date and comprehensive info concerning the ERC, consisting of any recent legal modifications or updates.
To get approved for the ERC, a business must satisfy one of the following requirements:.
Business operations were totally or partly suspended due to a federal government order related to COVID-19.
The business experienced a significant decrease in gross receipts. For 2021, a significant decrease is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross receipts compared to the right away preceding quarter.
The ERC is available to businesses of all sizes, consisting of tax-exempt companies, however there are some exceptions. For example, government entities and companies that got a PPP loan may have restrictions on declaring the credit.
The process for declaring the ERC involves completing the essential types and consisting of the credit on your work tax return (usually Form 941). The exact time it takes to process the credit can differ based on several aspects, consisting of the complexity of your service and the workload of the internal revenue service. It’s suggested to seek advice from a tax professional for assistance specific to your circumstance.
There are a number of companies that can aid with the procedure of claiming the ERC. These consist of accounting firms, tax advisory services, and payroll company. Some popular companies that offer help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research and contact these business directly to inquire about their fees and services.
Please keep in mind that the info offered here is based on general knowledge and might not reflect the most current updates or changes to the ERC. It is necessary to consult with a tax professional or go to the official internal revenue service website for the most accurate and updated info regarding eligibility, declaring procedures, and readily available support.
Less than 100. If the company had 100 or less staff members typically in 2019, then the credit is based.
on salaries paid to all workers whether they really worked or not. To put it simply, even if the.
staff members worked full-time and made money for full time work, the company still gets the credit.
Greater than 100. If the employer had more than 100 staff members on average in 2019, then the credit is.
enabled just for incomes paid to staff members who did not work during the calendar quarter.
In both cases, “wages” consists of not just cash payments however also a portion of the expense of company.
provided health care. Who Can Take The Employee Retention Credit
Companies can be instantly reimbursed for the credit by minimizing the amount of payroll taxes they.