Lets talk first about Employee Retention Credit 500 Employees :
Our group here what do these guys doing everyone in this room is assisting teach individuals about ERC and uh constantly offer a lovely breakfast and have people really find out about the program we should head to the room where we are able to show a few of the checks that we are getting for companies and I wish to see that what is this this is uh numerous millions of dollars literally Kevin hundreds of countless dollars so these are replicate copies of the letters that go to clients validating that the check is on the way I imply you know if you simply begin to take a 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 imply it’s just I suggest think about the number of actual clients that went through the program yeah this is the very end this is the party at the end when the check is verified the numbers are validated and the check is on the mail in the mail from the IRS heading to the customer so that’s how you’re able to track it you know when you
get this you know the check is opted for sure and that’s when they pay so they don’t pay anything up until they in fact get the cash they do not pay bottom line Wonder trust anything up until this letter is verified the check is on the way they deposit it into their checking account and they can really trust Wonder trust that the process has actually been ended up and how many you believe you have actually processed given that you started this we have to do with 35 000 of these for
about six billion dollars wow so clearly they know what they’re doing and that’s what you require 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 speaking about something really important today the employee retention credit which most of you have never ever become aware of I definitely had not become aware of it until extremely just recently and discovered a lot about it since this is probably the most affordable 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 creator and CEO of bottom line Principles they’re the biggest processor of these ERC credits this is a 170 page program so it’s difficult this isn’t like PPP we just phone your bank manager and state give me a loan it does not work there’s not a loan it’s an application and Josh is going to tell all of us about it and how to get it and why I have actually become yes the Ambassador and paid spokesperson for this I enjoy this program it’s going away very soon you got to find out everything 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 used businesses 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everybody it makes a big distinction right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
remedy the cash money payroll tax refund fine go on sorry I simply have to make sure we got that point I imply that’s a huge distinction a loan versus money cash I like cash money that’s what we’re speaking about 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 gorgeous tough check in the mail where you get actual cash from the internal revenue service all right so let’s talk about how it works due to the fact that 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 Presumption 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 actually owned an organization but it’s based upon 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 qualified so you have to be on payroll in 2020 on the W-2 and you have to be on payroll for the very first six months of 2021 on the W-2 right so there were 6 quarters the program was open well stroll us through the 6 quarters so you had quarters 2 three and 4 of 2020 and you had quarters one 2 and 3 of 2021. alright so that’s how it’s measured you need to be on the W-2 throughout that period now let’s talk my preferred part money how much can you return per employee that was on a W-2 in those 6 quarters so the calculation in 2020 to be exact Kevin is 50 of the employee’s salary to an optimum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers escalated to 70 of the staff member’s salary to an optimum of 7 thousand per quarter how did that take place um they just altered the rules in.
2021 versus because the turmoil 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 happens 21 000 Max in 2021 oh that’s how you develop twenty 6 thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty 6 thousand dollars per employee that is because that’s a great deal of cash it is now there’s a caveat here the PPP cash would need to be lowered from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would decrease the 26 000 so what we’re seeing typically Kevin is if you took PPP cash someplace 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 workers and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s big certainly now the big question is why does nobody understand about this since appearance when I first became aware of this when I initially met Josh you understand I have actually got lots of financial investments in great deals of business I’m a significant advocate for entrepreneurship in America and make lots of lots of investments in business owners of which many suffered through the pandemic when I initially became aware of this I called BS I do not think it due to the fact that I use 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 and that were well deserved and we used them wisely to stay alive 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 political leader pals Guv Senators they didn’t understand about it I mean that’s how you know 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 because you took the PPP likewise not real so let’s ask Josh why does no one learn about the staff member retention credit you understand what’s intriguing you’re talking 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 nation and they would process procedure 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 remember in the original cares act you could refrain from doing both programs so if you had actually done PPP you could refrain from doing ERC in the initial program and when they altered 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 anybody about how to.
do this does your CFO know how to do this not actually she or he’s never done it in the past 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 accountant’s never done this before unless you have an account that went into this business and bottom line my firm Kevin has actually been 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 companies so a great deal of our huge big business clients have worked with bottom line to recuperate other government programs we have actually done sales tax and utilize tax joblessness tax work opportunity tax credits research and development tax credits unclaimed home real estate tax all of these other federal government programs.
The staff member retention tax credit is a broad based refundable tax credit created to encourage.
companies to keep workers on their payroll. The credit is 50% of as much as $10,000 in wages 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 no matter size consisting of tax exempt companies. There are.
just two exceptions: (1) state and city governments and their instrumentalities and (2) little.
services who take Small Business Loans.
2. To certify, the company needs to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s company is completely or partially suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross invoices are below 50% of the similar quarter in 2019. When the.
company’s gross invoices exceed 80% of a similar quarter in 2019 they no longer certify.
after the end of that quarter.
Computation of the Credit.
The quantity of the credit is 50% of the certifying wages paid up to $10,000 in overall.
It works for earnings paid after March 13th and before December 31, 2020.
The meaning of certifying salaries varies by whether an employer had, on average, basically than.
100 workers in 2019.
Business that concentrate on ERC filing assistance typically provide proficiency and assistance to help services navigate the complex procedure of claiming the credit. They can provide different services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit 500 Employees
Eligibility Assessment: These business will assess your service’s eligibility for the ERC based upon aspects such as your industry, revenue, and operations. They can help determine if you meet the requirements for the credit and recognize the optimum credit amount you can claim.
Documentation and Calculation: ERC filing services will help in gathering the essential documents, such as payroll records and financial declarations, to support your claim. They will also assist determine the credit amount based upon qualified salaries and other certifying costs.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for previous quarters, these companies can examine your past payroll records and financials to determine potential opportunities for retroactive credits. They can assist you change previous income tax return to declare these refunds.
Filing Assistance: Business concentrating on ERC filings will prepare and submit the needed types and documentation on your behalf. This consists of finishing Kind 941 or any other required tax return.
Compliance and Updates: ERC policies and assistance have actually evolved with time. These companies stay upgraded with the current changes and make sure that your filings abide by the most existing standards. If the Internal revenue service requests extra information or performs an audit associated to your ERC claim, they can also supply continuous assistance.
It’s important to research study and veterinarian any business offering ERC filing support to guarantee their trustworthiness and know-how. Look for established firms with experience in tax and payroll services, or consider connecting to trusted accounting firms or tax professionals who use ERC submitting assistance.
Keep in mind that while these companies can supply valuable help, it’s always an excellent 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. government as part of COVID-19 relief steps. The objective of the ERC is to motivate services to keep and pay their employees during the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to qualified employers, including for-profit businesses, tax-exempt companies, and specific governmental entities. To certify, employers need to fulfill one of two requirements:.
Business operations were totally or partly suspended due to a federal government order related to COVID-19.
The business experienced a considerable decline in gross receipts. As mentioned earlier, for 2021, a substantial decrease is defined as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decline in gross receipts 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 percentage (up to 70%) of qualified salaries paid to workers, consisting of specific health plan 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 received a Paycheck Protection Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 enables services to declare the ERC even if they got a PPP loan. However, the same salaries can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and boosted, allowing eligible employers to declare the credit for certified salaries paid as far back as March 13, 2020. This retroactive arrangement supplies a chance for companies to modify prior-year tax returns and receive refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their work tax returns, normally Type 941. If the credit exceeds the amount of work taxes owed, the excess can be reimbursed to the employer.
It’s important to note that the ERC provisions and eligibility criteria have actually developed in time. The very best strategy is to seek advice from a tax expert or visit the official internal revenue service site for the most comprehensive and up-to-date info regarding the ERC, including any current legislative modifications or updates.
To qualify for the ERC, a company must satisfy among the following criteria:.
The business operations were totally or partially suspended due to a government order related to COVID-19.
Business experienced a considerable decrease in gross invoices. For 2021, a substantial decrease is specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decline is specified as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
The ERC is offered to companies of all sizes, including tax-exempt organizations, but there are some exceptions. Government entities and companies that got a PPP loan might have constraints on declaring the credit.
The procedure for claiming the ERC includes finishing the essential forms and including the credit on your work tax return (normally Kind 941). The exact time it takes to process the credit can differ based on several factors, including the complexity of your company and the work of the IRS. It’s recommended to talk to a tax expert for assistance specific to your circumstance.
There are a number of business that can help with the procedure of claiming the ERC. These include accounting companies, tax advisory services, and payroll service providers. Some widely known companies that use help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable 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 basic knowledge and might not reflect the most recent updates or modifications to the ERC. It is very important to seek advice from a tax professional or check out the official IRS site for the most updated and precise info concerning eligibility, declaring treatments, and offered assistance.
Less than 100. If the employer had 100 or less staff members typically in 2019, then the credit is based.
on earnings paid to all employees whether they actually worked or not. To put it simply, even if the.
workers 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 employees usually in 2019, then the credit is.
enabled just for earnings paid to workers who did not work throughout the calendar quarter.
In both cases, “wages” consists of not just cash payments however also a part of the cost of employer.
offered health care. Employee Retention Credit 500 Employees
Companies can be right away repaid for the credit by decreasing the amount of payroll taxes they.