Lets talk first about 26K Employee Retention Credit :
Our team here what do these guys doing everyone in this space is helping teach people about ERC and uh always supply a lovely breakfast and have people truly learn more about the program we need to head to the room where we are able 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 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 just start to look at a few 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 just I mean consider how many actual clients 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 IRS heading to the customer so that’s how you have the ability to track it you understand when you
receive this you know the check is chosen sure and that’s when they pay so they do not pay anything up until they actually get the money they do not pay bottom line Wonder trust anything until this letter is validated 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 actually been finished and the number of you believe you’ve processed considering that you began this we’re about 35 000 of these for
about 6 billion dollars wow so clearly they know what they’re doing which’s what you need you need 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 Terrific here you’re at my YouTube channel we’re talking about something actually important today the staff member retention credit which the majority of you have never become aware of I certainly had not heard of it till very recently and learned a lot about it due to the fact that this is probably the most affordable expense of capital for any small company anywhere
anytime if you have staff members between 5 and five hundred so I have actually got the professional with me this is Josh Fox he’s the creator and CEO of bottom line Principles they’re the largest processor of these ERC credits this is a 170 page program so it’s challenging this isn’t like PPP we just call your bank manager 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 all of us about it and how to get it and why I have actually ended up being yes the Ambassador and paid representative for this I love this program it’s going away soon you got to find out all about it let’s talk staff member 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 offered companies 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone 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 alright go on sorry I just have to make sure we got that point I indicate that’s a huge distinction a loan versus money cash I like money 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 initial cares Act is the ERC and yes Kevin it is a gorgeous tough check in the mail where you get real money from the IRS all right so let’s talk about how it works because it seems like to me if it’s a if it’s employee retention credit that individual needed to be a worker so I’m going to make the Assumption this cash is not for the owner not for individuals on the cap table not for investors it’s for workers right you had to have owned an organization but it’s based upon you having W-2 workers in America not 10.99. so as long as you had W-2 employees 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 need to be on payroll for the first six months of 2021 on the W-2 proper so there were six quarters the program was open well walk us through the six quarters so you had quarters 2 three and four of 2020 and you had quarters one two and 3 of 2021. alright so that’s how it’s determined you have to be on the W-2 during that period now let’s talk my preferred part cash how much can you return per worker that was on a W-2 in those 6 quarters so the estimation in 2020 to be specific Kevin is 50 of the employee’s salary to an optimum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the employee’s salary to a maximum of 7 thousand per quarter how did that happen um they simply 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 as much as five thousand Max and then what occurs 21 000 Max in 2021 oh that’s how you come up with twenty 6 thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per worker that is since that’s a great deal of money it is now there’s a caveat here the PPP money would have to be decreased from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would lower the 26 000 so what we’re seeing typically Kevin is if you took PPP cash somewhere around ten thousand dollars an individual so let’s state hypothetically you owned a restaurant in New York 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 obviously now the big concern is why does no one know about this due to the fact that look when I first heard about this when I first met Josh you know I’ve got lots of financial investments in lots of companies I’m a major supporter for entrepreneurship in America and make lots of lots of investments in entrepreneurs of which numerous suffered through the pandemic when I initially became aware of this I called BS I don’t believe it because I use the PPP we went through the cash 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 deserved and we utilized them wisely to survive during the pandemic so when I found out about this I stated nah it can’t hold true however when I dug around I even called to my politician 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 info out there then a bunch of individuals 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 worker retention credit you know what’s interesting you’re discussing the banks Kevin because in the PPP loan process 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 big banks in our country and they would process process 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 mayhem because remember in the original cares act you could refrain from doing both programs so if you had done PPP you might refrain from doing ERC in the original 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 know how to do this not actually he or she’s never done it previously 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 accounting professional no your accounting professional’s never ever done this before unless you have an account that entered into this business and bottom line my firm Kevin has actually been in business since 2009 and we’ve been dealing with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 companies so a lot of our huge huge business clients have worked with bottom line to recover other government programs we have actually done sales tax and use tax joblessness tax work chance tax credits research and development tax credits unclaimed property property tax all of these other government programs.
The worker 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 up to $10,000 in salaries paid by an.
company whose business is completely or partially suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
1. The credit is available to all companies despite size consisting of tax exempt companies. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
organizations who take Small Business Loans.
2. To qualify, the company needs to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s business is totally or partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the company’s gross receipts are below 50% of the comparable quarter in 2019. Once the.
employer’s gross invoices go above 80% of a comparable quarter in 2019 they no longer certify.
after completion of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the qualifying earnings paid up to $10,000 in total.
It works for incomes paid after March 13th and prior to December 31, 2020.
The definition of qualifying incomes differs by whether an employer had, typically, basically than.
100 employees in 2019.
Companies that concentrate on ERC filing assistance generally offer competence and assistance to help companies browse the complex process of declaring the credit. They can offer different services, including:.
How is the employee retention credit calculated? 26K Employee Retention Credit
Eligibility Evaluation: These business will evaluate your service’s eligibility for the ERC based on factors such as your market, profits, and operations. They can help determine if you satisfy the requirements for the credit and identify the maximum credit amount you can declare.
Documentation and Estimation: ERC filing services will assist in gathering the essential documents, such as payroll records and financial declarations, to support your claim. They will likewise assist calculate the credit quantity based on qualified salaries and other qualifying costs.
Retroactive Claim Evaluation: If you are eligible to claim the ERC for prior quarters, these business 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 Support: Business focusing on ERC filings will prepare and submit the required forms and documentation on your behalf. This includes completing Kind 941 or any other necessary tax return.
Compliance and Updates: ERC policies and guidance have actually progressed over time. These companies stay upgraded with the most recent modifications and make sure that your filings abide by the most existing guidelines. They can likewise offer ongoing support if the internal revenue service requests additional info or performs an audit related to your ERC claim.
It is very important to research and vet any company using ERC filing help to guarantee their credibility and competence. Search for recognized firms with experience in tax and payroll services, or think about reaching out to trusted accounting firms or tax experts who use ERC filing support.
Remember that while these companies can offer important help, it’s constantly a great concept to have a standard understanding of the ERC requirements and process yourself. This will help you make notified decisions and guarantee accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief procedures. The objective of the ERC is to motivate organizations to maintain and pay their employees throughout the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to qualified companies, including for-profit services, tax-exempt organizations, and certain governmental entities. To qualify, employers must satisfy one of two criteria:.
The business operations were totally or partially suspended due to a government order related to COVID-19.
Business experienced a significant decline in gross receipts. As pointed out earlier, for 2021, a significant decline is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decrease is specified as a 20% decrease in gross invoices compared to the 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 company’s share of Social Security taxes. The credit quantity amounts to a portion (as much as 70%) of qualified earnings paid to employees, consisting of particular health insurance expenditures. The maximum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, organizations that received an Income Security Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 enables organizations to declare the ERC even if they got a PPP loan. The same incomes can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and boosted, enabling qualified companies to declare the credit for qualified incomes paid as far back as March 13, 2020. This retroactive provision offers an opportunity for services to change prior-year tax returns and get refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their work tax returns, generally Kind 941. The excess can be reimbursed to the employer if the credit surpasses the quantity of employment taxes owed.
It is necessary to keep in mind that the ERC arrangements and eligibility requirements have actually evolved with time. The best course of action is to consult with a tax expert or visit the official internal revenue service site for the most comprehensive and current information concerning the ERC, consisting of any current legal changes or updates.
To receive the ERC, a business must meet among the following requirements:.
Business operations were completely or partly suspended due to a government order related to COVID-19.
The business experienced a significant decline in gross receipts. For 2021, a significant decline is defined as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019, or a 20% decrease in gross invoices compared to the immediately preceding quarter.
The ERC is offered to companies of all sizes, including tax-exempt organizations, however there are some exceptions. Government entities and companies that got a PPP loan may have limitations on claiming the credit.
The process for claiming the ERC involves completing the needed forms and including the credit on your employment income tax return (usually Type 941). The exact time it requires to process the credit can vary based on a number of elements, consisting of the complexity of your organization and the workload of the IRS. It’s suggested to talk to a tax expert for assistance specific to your situation.
There are numerous business that can assist with the process of claiming the ERC. Some well-known business that provide assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the information offered here is based on basic knowledge and may not reflect the most current updates or modifications to the ERC. It is essential to seek advice from a tax professional or check out the main IRS website for the most accurate and current information relating to eligibility, claiming procedures, and readily available assistance.
Less than 100. If the company had 100 or fewer staff members typically in 2019, then the credit is based.
on wages paid to all workers whether they actually worked or not. In other words, even if the.
employees worked full time and earned money for full-time work, the company still gets the credit.
Greater than 100. If the employer had more than 100 workers on average in 2019, then the credit is.
allowed just for salaries paid to staff members who did not work throughout the calendar quarter.
In both cases, “wages” includes not just cash payments however also a portion of the expense of employer.
supplied health care. 26K Employee Retention Credit
Companies can be instantly reimbursed for the credit by minimizing the amount of payroll taxes they.