Lets talk first about Employee Retention Credit 2017 :
Our group here what do these people doing everyone in this space is assisting teach people about ERC and uh constantly provide a lovely breakfast and have people actually discover the program we must head to the space where we have the ability 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 countless dollars literally Kevin hundreds of countless dollars so these are duplicate copies of the letters that go to clients verifying that the check is on the way I mean you know if you just start to take a 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 indicate it’s just I mean think of how many 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 IRS heading to the customer so that’s how you have the ability to track it you know when you
receive this you understand the check is gone for sure which’s when they pay so they don’t pay anything up until they actually receive the cash they do not pay bottom line Wonder trust anything up until this letter is validated the check is on the method they transfer it into their checking account and they can truly trust Wonder trust that the process has been completed and the number of you think you have actually processed since you began this we’re about 35 000 of these for
about six billion dollars wow so plainly 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 among 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 the majority of you have never ever heard of I definitely had not heard of it until very recently and discovered a lot about it since this is most likely the lowest expense of capital for any small company anywhere
anytime if you have workers between five and five hundred so I’ve got the expert with me this is Josh Fox he’s the founder and CEO of bottom line Ideas they’re the biggest processor of these ERC credits this is a 170 page program so it’s not easy this isn’t like PPP we just phone your bank manager and state offer 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 have actually ended up being yes the Ambassador and paid spokesperson for this I like this program it’s going away soon you got to discover everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply start there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act provided organizations 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everybody 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 need to make certain we got that point I suggest that’s a big distinction a loan versus cash cash I like cash cash that’s what we’re speaking 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 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 staff member retention credit that person had 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 shareholders it’s for staff members right you had to have actually owned a company but it’s based on you having W-2 staff members in America not 10.99. so as long as you had W-2 staff members 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 proper so there were six quarters the program was open well walk us through the 6 quarters so you had quarters two three and 4 of 2020 and you had quarters one 2 and 3 of 2021. alright 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 cash how much can you return per employee that was on a W-2 in those 6 quarters so the calculation in 2020 to be precise Kevin is 50 of the worker’s income to an optimum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the employee’s salary to an optimum of 7 thousand per quarter how did that occur 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 five thousand Max and then what happens 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 cash it is now there’s a caution here the PPP money would need to be lowered from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would minimize the 26 000 so what we’re seeing on average Kevin is if you took PPP money someplace around ten thousand dollars a person so let’s say hypothetically you owned a dining establishment 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 internal revenue service so it’s huge undoubtedly now the huge concern is why does no one know about this because appearance when I initially found out about this when I first fulfilled Josh you know I have actually got lots of financial investments in lots of business I’m a major advocate for entrepreneurship in America and make many numerous financial investments in business owners of which many suffered through the pandemic when I initially became aware of 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 really easy to do we had our CEOs call the banks they got their loans which were well should have and we utilized them sensibly to survive throughout the pandemic so when I became aware of this I said nah it can’t hold true however when I dug around I even called to my politician good friends Guv Senators they didn’t learn about it I mean that’s how you understand that’s how false information is that there’s no details out there then a bunch of individuals informed me well you can’t get it due to the fact that you took the PPP likewise not real so let’s ask Josh why does nobody learn about the employee retention credit you know what’s intriguing you’re speaking about the banks Kevin since in the PPP loan procedure the federal government made it very 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 simply process process that’s all um and here there was chaos since keep in mind in the original cares act you might refrain from doing both programs so if you had done PPP you might not do 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 ever made it clear to anyone about how to.
do this does your CFO understand how to do this not truly she or he’s never ever done it before do the banks do it nope the banks don’t do it the payroll companies yeah some of them are doing it as a payroll company your accounting professional no your accountant’s never done this prior to unless you have an account that entered into this organization and bottom line my firm Kevin has actually stayed in business because 2009 and we have actually been dealing with the federal government and the state federal government to recuperate money for Fortune 500 Fortune 1000 companies so a great deal of our big big corporate clients have dealt with bottom line to recover other federal government programs we’ve done sales tax and utilize tax unemployment tax work chance tax credits research and development tax credits unclaimed property property tax all of these other government programs.
The employee 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.
company whose organization is totally or partly suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is available to all employers regardless of size including tax exempt companies. There are.
just 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
companies who take Small Business Loans.
2. To certify, the company needs to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s business is totally or partly suspended by government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross invoices are listed below 50% of the similar quarter in 2019. Once the.
company’s gross receipts go above 80% of a similar quarter in 2019 they no longer certify.
after completion of that quarter.
Computation of the Credit.
The quantity of the credit is 50% of the certifying earnings paid up to $10,000 in overall.
It is effective for earnings paid after March 13th and prior to December 31, 2020.
The definition of qualifying incomes varies by whether an employer had, usually, more or less than.
100 staff members in 2019.
Business that concentrate on ERC filing assistance normally provide knowledge and assistance to help organizations navigate the complicated procedure of declaring the credit. They can provide various services, including:.
How is the employee retention credit calculated? Employee Retention Credit 2017
Eligibility Assessment: These business will examine your organization’s eligibility for the ERC based on elements such as your industry, profits, and operations. If you fulfill the requirements for the credit and determine the optimum credit quantity you can claim, they can help determine.
Documents and Estimation: ERC filing services will help in gathering the necessary documents, such as payroll records and financial declarations, to support your claim. They will likewise assist determine the credit amount based on qualified earnings and other certifying expenses.
Retroactive Claim Review: If you are eligible to claim the ERC for prior quarters, these companies can evaluate your previous payroll records and financials to determine possible chances for retroactive credits. They can assist you change previous tax returns to claim these refunds.
Filing Help: Business specializing in ERC filings will prepare and send the necessary forms and documents in your place. This includes finishing Type 941 or any other necessary tax return.
Compliance and Updates: ERC regulations and guidance have actually evolved over time. These business stay updated with the latest changes and ensure that your filings abide by the most present guidelines. If the Internal revenue service requests extra info or performs an audit related to your ERC claim, they can also supply continuous support.
It is essential to research study and vet any company providing ERC filing help to guarantee their reliability and expertise. Look for recognized firms with experience in tax and payroll services, or consider connecting to relied on accounting companies or tax experts who offer ERC filing assistance.
Bear in mind that while these business can provide important help, it’s always a great concept to have a basic understanding of the ERC requirements and procedure yourself. This will assist you make informed choices and ensure precise 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 steps. The objective of the ERC is to encourage services to keep and pay their workers during 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 qualified employers, including for-profit companies, tax-exempt organizations, and particular governmental entities. To certify, employers need to meet one of two criteria:.
The business operations were completely or partly suspended due to a government order related to COVID-19.
The business experienced a considerable decline in gross invoices. As discussed previously, 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 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 instantly preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity is equal to a portion (as much as 70%) of certified salaries paid to workers, consisting of particular health insurance expenditures. The maximum credit per staff member is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, businesses that received an Income Protection Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 permits services to claim the ERC even if they got a PPP loan. The same wages can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and enhanced, allowing eligible employers to declare the credit for certified incomes paid as far back as March 13, 2020. This retroactive arrangement provides a chance for services to modify prior-year tax returns and get refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their work tax returns, usually Type 941. If the credit goes beyond the amount of employment taxes owed, the excess can be refunded to the employer.
It is very important to note that the ERC arrangements and eligibility requirements have developed gradually. The best strategy is to seek advice from a tax professional or visit the official IRS website for the most up-to-date and detailed details relating to the ERC, including any current legislative changes or updates.
To receive the ERC, a service needs to fulfill among the following criteria:.
The business operations were completely or partly suspended due to a federal government order related to COVID-19.
Business experienced a considerable decline in gross receipts. For 2021, a considerable decrease is specified as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decline in gross receipts compared to the very same quarter in 2019, or a 20% decline in gross receipts compared to the instantly preceding quarter.
The ERC is readily available to companies of all sizes, consisting of tax-exempt companies, but there are some exceptions. Federal government entities and companies that received a PPP loan might 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 Type 941). The exact time it requires to process the credit can vary based on numerous aspects, consisting of the intricacy of your organization and the work of the IRS. It’s advised to speak with a tax professional for guidance specific to your circumstance.
There are a number of business that can help with the process of declaring the ERC. Some well-known business that provide support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the details supplied here is based upon general 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 go to the official internal revenue service site for the most accurate and updated info concerning eligibility, declaring treatments, and readily available support.
Less than 100. The credit is based if the employer had 100 or fewer employees on average in 2019.
on incomes paid to all workers whether they actually worked or not. Simply put, even if the.
workers worked full-time and earned money for full-time work, the employer still gets the credit.
Greater than 100. If the company had more than 100 staff members usually in 2019, then the credit is.
permitted just for wages paid to staff members who did not work during the calendar quarter.
In both cases, “wages” includes not just money payments however likewise a portion of the expense of company.
offered health care. Employee Retention Credit 2017
Employers can be right away compensated for the credit by decreasing the amount of payroll taxes they.