Lets talk first about Worksheet 1 For Employee Retention Credit :
Our team here what do these people doing everyone in this room is assisting teach individuals about ERC and uh always provide a gorgeous breakfast and have people actually learn about the program we need to head to the room where we are able to show a few of the checks that we are getting for business and I want to see that what is this this is uh numerous millions of dollars actually Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to clients validating that the check is on the method I indicate you understand if you just begin to look at some of these here I suggest this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I imply it’s just I suggest think of the number of actual customers that went through the program yeah this is the very end this is the party at the end when the check is validated the numbers are confirmed 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 understand the check is chosen sure which’s when they pay so they don’t pay anything until they in fact receive the cash they don’t pay bottom line Wonder trust anything till this letter is validated the check is on the way they transfer it into their savings account and they can really rely on Wonder trust that the process has actually been completed and how many you believe you have actually processed considering that you started this we’re about 35 000 of these for
about 6 billion dollars wow so clearly they understand what they’re doing which’s what you need you require experts 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 discussing something really crucial today the staff member retention credit which most of you have actually never ever heard of I definitely had not heard of it till really recently and discovered a lot about it since this is most likely the lowest expense of capital for any small business anywhere
anytime if you have workers 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 challenging this isn’t like PPP we simply contact 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 tell us all about it and how to get it and why I’ve become yes the Ambassador and paid spokesperson for this I love this program it’s disappearing soon you got to learn all about it let’s talk employee retention credit Josh Fox what is an ERC let’s just begin there so throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act offered 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 big distinction right there 2 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 okay go on sorry I just have to make certain we got that point I mean that’s a big difference a loan versus cash cash I like cash money that’s what we’re discussing all right 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 stunning hard check in the mail where you get actual money from the IRS all right so let’s discuss how it works because 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 cash is not for the owner not for individuals on the cap table not for investors it’s for employees right you needed to have actually owned an organization however it’s based on 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 eligible 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 six quarters the program was open well stroll us through the 6 quarters so you had quarters 2 3 and 4 of 2020 and you had quarters one 2 and three of 2021. fine so that’s how it’s determined you need to be on the W-2 during that period now let’s talk my preferred part cash just how much can you return per employee that was on a W-2 in those six quarters so the estimation in 2020 to be specific 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 increased to 70 of the worker’s income to an optimum of 7 thousand per quarter how did that happen 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 employees on payroll 100 so if you can get 5 000 per person Max in twenty that was 50 in 2020 approximately 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 5 thousand in twenty twenty that’s twenty six thousand dollars per worker that is because that’s a lot of money 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 two you would lower the 26 000 so what we’re seeing usually Kevin is if you took PPP cash 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 workers and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s huge undoubtedly now the huge question is why does nobody learn about this because appearance when I initially became aware of this when I initially satisfied Josh you know I’ve got lots of financial investments in great deals of business I’m a significant advocate for entrepreneurship in America and make numerous many investments in entrepreneurs of which numerous suffered through the pandemic when I first heard about this I called BS I do not think it since I utilize the PPP we went through the cash center Banks to get it it was very easy to do we had our CEOs call the banks they got their loans which were well been worthy of and we used them carefully to survive throughout the pandemic so when I heard about this I stated nah it can’t be true however when I dug around I even called to my political leader friends Guv Senators they didn’t learn about it I imply that’s how you know that’s how false information is that there’s no info out there then a lot of individuals informed me well you can’t get it due to the fact that you took the PPP likewise not true so let’s ask Josh why does no one know about the employee retention credit you understand what’s intriguing you’re talking about the banks Kevin because in the PPP loan process 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 just procedure process that’s all um and here there was mayhem due to the fact that keep in mind in the original cares act you might not do both programs so if you had actually done PPP you could refrain from doing ERC in the original program and when they changed the law in 2021 the banks were refraining from doing ERC because it’s not alone so you’re getting a tax refund so the government never made it clear to anyone about how to.
do this does your CFO understand how to do this not actually she or he’s never ever done it before 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 accountant no your accountant’s never ever done this prior to unless you have an account that entered into this business and bottom line my company Kevin has actually stayed in business given that 2009 and we have actually been working with the federal government and the state federal government to recuperate cash for Fortune 500 Fortune 1000 business so a great deal of our big big business customers have worked with bottom line to recover other federal government programs we’ve done sales tax and use tax joblessness tax work opportunity tax credits research and development tax credits unclaimed home real estate tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit created to motivate.
employers to keep workers on their payroll. The credit is 50% of as much as $10,000 in salaries paid by an.
employer whose company is totally or partly suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
Availability.
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) little.
services who take Small Business Loans.
2. To qualify, the company needs to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s business is totally or partially suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross invoices are listed below 50% of the equivalent quarter in 2019. When the.
company’s gross receipts exceed 80% of a comparable 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 incomes paid up to $10,000 in overall.
It is effective for earnings paid after March 13th and prior to December 31, 2020.
The meaning of qualifying wages differs by whether a company had, on average, basically than.
100 staff members in 2019.
Companies that focus on ERC filing assistance generally supply know-how and assistance to assist services navigate the intricate procedure of declaring the credit. They can use various services, including:.
How is the employee retention credit calculated? Worksheet 1 For Employee Retention Credit
Eligibility Assessment: These companies will assess your organization’s eligibility for the ERC based upon elements such as your market, revenue, and operations. They can assist figure out if you meet the requirements for the credit and determine the maximum credit amount you can declare.
Documentation and Computation: ERC filing services will assist in gathering the necessary documentation, such as payroll records and financial declarations, to support your claim. They will likewise assist calculate the credit quantity based upon eligible earnings and other qualifying expenditures.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for previous quarters, these business can examine your past payroll records and financials to recognize prospective opportunities for retroactive credits. They can help you amend prior tax returns to declare these refunds.
Filing Support: Companies specializing in ERC filings will prepare and submit the essential forms and paperwork on your behalf. This includes completing Kind 941 or any other necessary tax forms.
Compliance and Updates: ERC guidelines and guidance have actually evolved over time. These companies stay updated with the most recent modifications and make sure that your filings adhere to the most present standards. They can also provide continuous assistance if the internal revenue service demands extra information or conducts an audit related to your ERC claim.
It is essential to research study and vet any company providing ERC filing assistance to ensure their trustworthiness and knowledge. Search for established firms with experience in tax and payroll services, or think about connecting to relied on accounting companies or tax professionals who offer ERC submitting support.
Bear in mind that while these business can supply important support, it’s always a great idea to have a basic understanding of the ERC requirements and process yourself. This will help you make notified choices and make sure accurate filings.
The Worker Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief procedures. The objective of the ERC is to encourage companies to maintain and pay their staff members throughout the pandemic, even if their operations have actually been impacted.
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 certify, employers must satisfy one of two criteria:.
The business operations were totally or partly suspended due to a federal government order related to COVID-19.
Business experienced a significant decline in gross receipts. As discussed previously, for 2021, a substantial decline is specified as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a considerable 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 immediately preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity amounts to a percentage (as much as 70%) of qualified incomes paid to workers, including certain 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: Initially, businesses that got a Paycheck Security Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 permits businesses to declare the ERC even if they got a PPP loan. The very same salaries can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and improved, permitting qualified employers to declare the credit for certified incomes paid as far back as March 13, 2020. This retroactive provision supplies a chance for services to amend prior-year income tax return and receive refunds.
Declaring the Credit: Employers can declare the ERC by reporting it on their employment tax returns, usually Form 941. If the credit surpasses the quantity of work taxes owed, the excess can be refunded to the company.
It’s important to keep in mind that the ERC arrangements and eligibility requirements have evolved in time. The very best strategy is to talk to a tax expert or check out the main IRS website for the most detailed and updated info concerning the ERC, consisting of any recent legal modifications or updates.
To receive the ERC, an organization needs to fulfill among the following criteria:.
The business operations were fully or partly suspended due to a government order related to COVID-19.
The business experienced a substantial decrease in gross receipts. For 2021, a significant decrease is specified as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decrease in gross receipts compared to the immediately preceding quarter.
The ERC is available to businesses of all sizes, including tax-exempt companies, but there are some exceptions. For instance, federal government entities and companies that received a PPP loan may have constraints on claiming the credit.
The process for claiming the ERC involves completing 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 aspects, including the complexity of your service and the workload of the IRS. It’s advised to consult with a tax professional for guidance specific to your situation.
There are a number of companies that can assist with the process of claiming the ERC. Some well-known business that offer assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the info supplied here is based on basic knowledge and might not reflect the most recent updates or changes to the ERC. It is very important to seek advice from a tax professional or check out the official internal revenue service website for the most updated and accurate information concerning eligibility, declaring procedures, and offered support.
Less than 100. The credit is based if the company had 100 or less workers on average in 2019.
on incomes paid to all workers whether they really worked or not. Simply put, even if the.
staff members worked full-time and made money for full-time work, the company still gets the credit.
Greater than 100. The credit is if the company had more than 100 workers on average in 2019.
allowed just for incomes paid to workers who did not work throughout the calendar quarter.
In both cases, “salaries” includes not just money payments but likewise a portion of the expense of employer.
provided health care. Worksheet 1 For Employee Retention Credit
Payment.
Companies can be instantly reimbursed for the credit by decreasing the quantity of payroll taxes they.