Lets talk first about Are Tips Considered Qualified Wages For Employee Retention Credit :
Our team here what do these men doing everybody in this space is assisting teach people about ERC and uh constantly supply a lovely breakfast and have people actually learn more about the program we need to head to the room where we have the ability to show some of the checks that we are getting for business and I wish to see that what is this this is uh numerous millions of dollars literally Kevin numerous countless dollars so these are duplicate copies of the letters that go to clients validating that the check is on the method I indicate you understand if you simply 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 just I suggest think about the number of real customers that went through the program yeah this is the very end this is the celebration at the end when the check is verified the numbers are confirmed and the check is on the mail in the mail from the IRS heading to the consumer so that’s how you’re able to track it you know when you
receive this you know the check is chosen sure which’s when they pay so they don’t pay anything up until they really receive the cash they don’t pay bottom line Wonder trust anything up until this letter is verified the check is on the method they transfer it into their bank account and they can truly rely on Wonder trust that the process has been ended up and the number of you believe you have actually processed considering that you began this we’re about 35 000 of these for
about 6 billion dollars wow so plainly they know 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 one of these that’s what matters all right Mr Terrific here you’re at my YouTube channel we’re talking about something actually essential today the worker retention credit which most of you have actually never ever heard of I definitely had not heard of it until very recently and found out a lot about it since this is most likely the lowest cost of capital for any small company anywhere
anytime if you have workers in between five and five hundred so I have actually got the specialist with me this is Josh Fox he’s the founder and CEO of bottom line Concepts 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 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 ended up being yes the Ambassador and paid representative for this I love this program it’s disappearing very soon you got to discover 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 offered companies 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 difference right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
remedy the money cash payroll tax refund fine go on sorry I simply need to make certain we got that point I indicate that’s a big distinction a loan versus cash cash I like money cash that’s what we’re speaking about 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 beautiful hard check in the mail where you get actual cash from the internal revenue service all right so let’s speak about how it works due to the fact that it sounds like to me if it’s a if it’s worker retention credit that person had to be a worker so I’m going to make the Presumption this money is not for the owner not for people on the cap table not for investors it’s for employees right you had to have actually owned a service however it’s based on you having W-2 workers in America not 10.99. so 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 need to be on payroll for the first 6 months of 2021 on the W-2 right so there were six quarters the program was open well walk us through the 6 quarters so you had quarters two 3 and four of 2020 and you had quarters one 2 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 preferred part money just how much can you return per employee that was on a W-2 in those 6 quarters so the calculation in 2020 to be specific Kevin is 50 of the employee’s wage to a maximum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers increased to 70 of the employee’s salary to a maximum of seven thousand per quarter how did that occur um they just altered the rules in.
2021 versus because the mayhem of the pandemic so they wished to even get more to keep those staff members 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 then what occurs 21 000 Max in 2021 oh that’s how you develop twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six 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 need to be minimized from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would lower the 26 000 so what we’re seeing on average Kevin is if you took PPP cash somewhere around ten thousand dollars an individual so let’s say hypothetically you owned a dining establishment 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 internal revenue service so it’s huge obviously now the huge concern is why does nobody understand about this because look when I initially found out about this when I first met Josh you know I have actually got lots of financial investments in lots of business I’m a major supporter for entrepreneurship in America and make lots of many financial investments in business owners of which lots of suffered through the pandemic when I initially found out about this I called BS I do not believe it due to the fact that 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 been worthy of and we used them carefully to stay alive throughout the pandemic so when I became aware of this I stated nah it can’t be true however when I dug around I even contacted us to my politician friends Governor Senators they didn’t understand about it I suggest that’s how you understand that’s how misinformation is that there’s no info out there then a lot of people informed me well you can’t get it due to the fact that you took the PPP also not real so let’s ask Josh why does nobody understand about the employee retention credit you understand what’s interesting you’re speaking about the banks Kevin due to the fact that 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 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 procedure 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 not do ERC in the original program and when they changed the law in 2021 the banks were refraining from doing ERC due to the fact that it’s not alone so you’re getting a tax refund so the federal 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 accounting professional no your accountant’s never done this before unless you have an account that entered into this service and bottom line my firm Kevin has actually been in business given that 2009 and we’ve been dealing with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 business so a lot of our big huge business clients have actually worked with bottom line to recover other government programs we’ve done sales tax and utilize tax joblessness 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 motivate.
employers to keep staff members on their payroll. The credit is 50% of up to $10,000 in wages paid by an.
employer whose business is completely or partially suspended because of COVID-19 or whose gross invoices.
decrease by more than 50%.
1. The credit is offered to all companies no matter size consisting of tax exempt companies. There are.
just two exceptions: (1) state and city governments and their instrumentalities and (2) small.
companies who take Small Business Loans.
2. To certify, the employer has to satisfy one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s organization is completely or partly suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the similar quarter in 2019. When the.
company’s gross receipts exceed 80% of a similar quarter in 2019 they no longer qualify.
after completion of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the certifying wages paid up to $10,000 in total.
It works for salaries paid after March 13th and prior to December 31, 2020.
The definition of certifying wages varies by whether an employer had, usually, basically than.
100 staff members in 2019.
Business that focus on ERC filing assistance usually offer know-how and assistance to help services navigate the complicated procedure of claiming the credit. They can provide different services, including:.
How is the employee retention credit calculated? Are Tips Considered Qualified Wages For Employee Retention Credit
Eligibility Assessment: These companies will assess your company’s eligibility for the ERC based upon factors such as your market, revenue, and operations. If you meet the requirements for the credit and determine the maximum credit quantity you can declare, they can assist determine.
Documentation and Estimation: ERC filing services will assist in gathering the required documents, such as payroll records and financial declarations, to support your claim. They will also help calculate the credit amount based on qualified wages and other qualifying expenses.
Retroactive Claim Review: If you are qualified to declare the ERC for previous quarters, these companies can evaluate your previous payroll records and financials to determine potential opportunities for retroactive credits. They can help you amend prior tax returns to claim these refunds.
Filing Support: Companies specializing in ERC filings will prepare and submit the essential kinds and paperwork in your place. This includes finishing Kind 941 or any other required tax forms.
Compliance and Updates: ERC policies and assistance have actually evolved in time. These companies remain upgraded with the most recent modifications and ensure that your filings adhere to the most current standards. If the IRS demands additional info or performs an audit associated to your ERC claim, they can likewise provide ongoing assistance.
It is very important to research study and vet any company providing ERC filing help to ensure their trustworthiness and proficiency. Look for recognized firms with experience in tax and payroll services, or think about connecting to relied on accounting firms or tax experts who use ERC submitting support.
Bear in mind that while these business can provide valuable assistance, it’s always an excellent idea to have a fundamental understanding of the ERC requirements and procedure yourself. This will help you make notified decisions and guarantee 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 procedures. The objective of the ERC is to encourage companies to retain and pay their workers during the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to eligible companies, including for-profit companies, tax-exempt companies, and specific governmental entities. To certify, companies must fulfill one of two criteria:.
The business operations were fully or partly suspended due to a government order related to COVID-19.
Business experienced a substantial decrease in gross invoices. As mentioned earlier, for 2021, a considerable decrease is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decline in gross invoices compared to the very same quarter in 2019, or a 20% decline in gross receipts 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 amount amounts to a percentage (as much as 70%) of qualified incomes paid to employees, including specific health insurance expenditures. 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 received a Paycheck Protection Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 allows services to declare the ERC even if they received a PPP loan. However, the very same salaries can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and boosted, permitting eligible companies to declare the credit for certified incomes paid as far back as March 13, 2020. This retroactive arrangement offers a chance for companies to amend prior-year income tax return and receive refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their work income tax return, normally Form 941. The excess can be reimbursed to the employer if the credit surpasses the amount of work taxes owed.
It is very important to note that the ERC provisions and eligibility criteria have actually developed gradually. The best course of action is to consult with a tax expert or visit the main internal revenue service site for the most up-to-date and detailed info relating to the ERC, including any current legislative modifications or updates.
To receive the ERC, an organization must 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 considerable decrease in gross invoices. For 2021, a substantial decline is defined as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a considerable decrease is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decline in gross invoices compared to the immediately preceding quarter.
The ERC is offered to businesses of all sizes, including tax-exempt organizations, but there are some exceptions. For instance, government entities and businesses that received a PPP loan may have constraints on claiming the credit.
The procedure for claiming the ERC includes completing the necessary kinds and consisting of the credit on your employment income tax return (normally Type 941). The exact time it requires to process the credit can vary based on several elements, including the complexity of your business and the workload of the IRS. It’s advised to talk to a tax expert for guidance specific to your scenario.
There are several business that can aid with the process of claiming the ERC. These consist of accounting firms, tax advisory services, and payroll service providers. Some widely known companies that offer help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research study and call these companies directly to inquire about their services and costs.
Please keep in mind that the details offered here is based upon general understanding and might not reflect the most recent updates or changes to the ERC. It is very important to speak with a tax professional or check out the main internal revenue service site for the most accurate and up-to-date information relating to eligibility, claiming treatments, and offered assistance.
Less than 100. If the company had 100 or fewer workers typically in 2019, then the credit is based.
on incomes paid to all workers whether they really worked or not. In other words, even if the.
workers worked full time and got paid for full-time work, the employer still gets the credit.
Greater than 100. The credit is if the company had more than 100 employees on average in 2019.
permitted just for earnings paid to employees who did not work throughout the calendar quarter.
In both cases, “salaries” includes not just cash payments but likewise a portion of the cost of company.
provided health care. Are Tips Considered Qualified Wages For Employee Retention Credit
Companies can be instantly compensated for the credit by lowering the amount of payroll taxes they.