Lets talk first about 2022 Employee Retention Credits :
Our group here what do these men doing everybody in this space is assisting teach individuals about ERC and uh always offer a beautiful breakfast and have individuals really learn more about the program we ought to head to the space where we are able to display some of the checks that we are getting for companies and I wish to see that what is this this is uh hundreds of countless 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 mean you understand if you just start to take a 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 suggest it’s simply I mean think about 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 confirmed 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 have the ability to track it you understand when you
get this you know the check is opted for sure and that’s when they pay so they don’t pay anything till they actually get the money they don’t pay bottom line Wonder trust anything until this letter is verified the check is on the method they transfer it into their checking account and they can truly rely on Wonder trust that the process has been finished and how many you believe you’ve processed considering that you started this we have to do with 35 000 of these for
about 6 billion dollars wow so clearly they understand what they’re doing which’s what you require 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 actually crucial today the staff member retention credit which the majority of you have actually never become aware of I definitely hadn’t become aware of it until really recently and learned a lot about it since this is most likely the most affordable cost of capital for any small company anywhere
anytime if you have staff members in between five and five hundred so I’ve got the professional with me this is Josh Fox he’s the founder and CEO of bottom line Principles they’re the largest processor of these ERC credits this is a 170 page program so it’s difficult this isn’t like PPP we simply call up your bank manager and state provide me a loan it does not 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 find out all about it let’s talk worker retention credit Josh Fox what is an ERC let’s simply start there so during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act offered services 3 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 precisely so the ERC is a refund that’s.
remedy the cash money payroll tax refund alright go on sorry I simply need to make sure we got that point I suggest that’s a big distinction a loan versus money cash I like cash money that’s what we’re talking about okay 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 internal revenue service all right so let’s speak about how it works due to the fact that it seems like to me if it’s a if it’s worker retention credit that person needed to be a staff member 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 workers right you had to have owned a business but it’s based on you having W-2 staff members 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 appropriate so there were 6 quarters the program was open well stroll us through the 6 quarters so you had quarters two 3 and four of 2020 and you had quarters one two and 3 of 2021. okay so that’s how it’s determined you need to be on the W-2 during that duration now let’s talk my favorite part cash just how much can you return per worker that was on a W-2 in those six quarters so the calculation in 2020 to be specific Kevin is 50 of the staff member’s wage to a maximum of 5 thousand dollars per staff member for the year of 2020 and in 2021 the numbers escalated to 70 of the staff member’s income to a maximum of seven thousand per quarter how did that occur um they just altered the rules in.
2021 versus since the mayhem 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 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 6 thousand dollars per staff member that is because that’s a great deal of money it is now there’s a caveat here the PPP cash would have to be decreased from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would reduce the 26 000 so what we’re seeing on average Kevin is if you took PPP money someplace around 10 thousand dollars an individual so let’s say hypothetically you owned a restaurant in New York City where I’m from and you had a hundred employees 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 huge question is why does no one learn about this because appearance when I initially became aware of this when I first satisfied Josh you understand I have actually got great deals of investments in lots of companies I’m a significant advocate for entrepreneurship in America and make numerous many financial investments in business owners of which many suffered through the pandemic when I first found out about this I called BS I don’t believe it since I use 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 which were well been worthy of and we used them sensibly to stay alive throughout the pandemic so when I heard about this I said nah it can’t hold true but when I dug around I even contacted us to my politician buddies 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 because you took the PPP also not true so let’s ask Josh why does no one know about the staff member retention credit you know what’s intriguing you’re talking about the banks Kevin since in the PPP loan procedure the federal government made it extremely clear that if you wanted a PPP loan you would call Wells Fargo Citibank Bank of America any of the huge banks in our nation and they would process process in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply process procedure that’s all um and here there was chaos due to the fact that keep in mind in the original cares act you might refrain from doing both programs so if you had done PPP you might refrain from doing ERC in the initial 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 made it clear to any person about how to.
do this does your CFO understand how to do this not really he or she’s never 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 business your accountant no your accounting professional’s never done this prior to unless you have an account that entered into this organization and bottom line my firm Kevin has been in business because 2009 and we’ve been working with the federal government and the state federal government to recuperate cash for Fortune 500 Fortune 1000 companies so a lot of our huge huge business customers have dealt with bottom line to recover other federal government programs we have actually done sales tax and use tax unemployment tax work chance tax credits research and development tax credits unclaimed property property tax all of these other federal government programs.
The staff member retention tax credit is a broad based refundable tax credit created to motivate.
companies to keep staff members on their payroll. The credit is 50% of as much as $10,000 in incomes paid by an.
Because of COVID-19 or whose gross invoices, employer whose company is fully or partly suspended.
decrease by more than 50%.
1. The credit is offered to all companies despite size consisting of tax exempt organizations. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) little.
services who take Small company Loans.
2. To qualify, the employer needs to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s service is fully or partially suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are below 50% of the equivalent quarter in 2019. As soon as the.
company’s gross invoices go above 80% of an equivalent 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 qualifying 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 certifying incomes differs by whether an employer had, usually, more or less than.
100 staff members in 2019.
Business that focus on ERC filing support typically offer knowledge and assistance to assist services navigate the intricate procedure of claiming the credit. They can use different services, consisting of:.
How is the employee retention credit calculated? 2022 Employee Retention Credits
Eligibility Assessment: These companies will examine your company’s eligibility for the ERC based on aspects such as your industry, profits, and operations. If you fulfill the requirements for the credit and identify the optimum credit quantity you can declare, they can help identify.
Documentation and Computation: ERC filing services will assist in collecting the needed documents, such as payroll records and monetary declarations, to support your claim. They will likewise assist determine the credit quantity based upon eligible salaries and other certifying expenses.
Retroactive Claim Review: If you are qualified to claim the ERC for previous quarters, these companies can evaluate your previous payroll records and financials to determine prospective chances for retroactive credits. They can help you amend previous income tax return to declare these refunds.
Filing Assistance: Companies concentrating on ERC filings will prepare and submit the essential forms and documentation on your behalf. This consists of completing Kind 941 or any other required tax forms.
Compliance and Updates: ERC guidelines and guidance have developed in time. These business remain upgraded with the most recent modifications and make sure that your filings adhere to the most current guidelines. If the IRS demands additional information or performs an audit associated to your ERC claim, they can likewise offer ongoing assistance.
It is necessary to research and veterinarian any business using ERC filing support to guarantee their credibility and competence. Look for recognized companies with experience in tax and payroll services, or think about reaching out to trusted accounting firms or tax experts who offer ERC submitting assistance.
Keep in mind that while these companies can offer valuable support, it’s always a great concept to have a fundamental understanding of the ERC requirements and procedure yourself. This will help you make notified choices and guarantee precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief steps. The objective of the ERC is to motivate services to maintain and pay their employees throughout the pandemic, even if their operations have actually been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to eligible employers, including for-profit companies, tax-exempt organizations, and specific governmental entities. To qualify, companies need to meet one of two criteria:.
Business operations were fully or partially suspended due to a government order related to COVID-19.
The business experienced a substantial decrease in gross invoices. As mentioned earlier, for 2021, a considerable decrease is defined as a 20% decrease in gross receipts 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 very same quarter in 2019, or a 20% decline in gross invoices compared to the instantly preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit amount amounts to a percentage (as much as 70%) of qualified wages paid to employees, including specific health insurance expenses. The optimum 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 eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 enables services to claim the ERC even if they received a PPP loan. The same wages can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively broadened and enhanced, permitting qualified employers to claim the credit for certified incomes paid as far back as March 13, 2020. This retroactive provision provides a chance 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 employment tax returns, usually Type 941. If the credit surpasses the quantity of employment taxes owed, the excess can be reimbursed to the company.
It is very important to keep in mind that the ERC provisions and eligibility requirements have developed gradually. The very best course of action is to consult with a tax expert or check out the official IRS site for the most in-depth and current information concerning the ERC, including any current legal changes or updates.
To get approved for the ERC, a service needs to fulfill among the following criteria:.
The business operations were completely or partially suspended due to a government order related to COVID-19.
Business experienced a considerable decrease in gross receipts. For 2021, a considerable decline 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% decline in gross receipts compared to the same quarter in 2019, or a 20% decline in gross invoices compared to the immediately preceding quarter.
The ERC is readily available to organizations of all sizes, including tax-exempt companies, but there are some exceptions. Federal government entities and companies that received a PPP loan might have limitations on claiming the credit.
The process for claiming the ERC includes finishing the essential types and consisting of the credit on your employment income tax return (typically Form 941). The exact time it requires to process the credit can differ based upon a number of factors, including the intricacy of your business and the work of the IRS. It’s suggested to speak with a tax expert for assistance specific to your circumstance.
There are several business that can help with the process of declaring the ERC. These consist of accounting companies, tax advisory services, and payroll service providers. Some well-known companies that use assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research and get in touch with these business directly to ask about their costs and services.
Please keep in mind that the info provided here is based upon general knowledge and may not reflect the most current updates or modifications to the ERC. It is necessary to talk to a tax expert or go to the main internal revenue service website for the most up-to-date and accurate info concerning eligibility, declaring treatments, and readily available support.
Less than 100. If the employer had 100 or less staff members usually in 2019, then the credit is based.
on earnings paid to all workers whether they actually worked or not. In other words, even if the.
employees worked full-time and got paid for full time work, the company still gets the credit.
Greater than 100. The credit is if the company had more than 100 staff members on average in 2019.
enabled only for wages paid to staff members who did not work during the calendar quarter.
In both cases, “incomes” consists of not just money payments but also a portion of the expense of employer.
offered healthcare. 2022 Employee Retention Credits
Employers can be instantly repaid for the credit by lowering the quantity of payroll taxes they.