Lets talk first about Employee Retention Credit Chart :
Our group here what do these people doing everyone in this space is helping teach individuals about ERC and uh constantly provide a gorgeous breakfast and have people really learn more about the program we ought to head to the space where we have the ability to show a few of the checks that we are getting for business and I ‘d like to see that what is this this is uh numerous millions of dollars literally Kevin numerous millions of dollars so these are replicate copies of the letters that go to clients verifying that the check is on the way I imply you know if you just begin to take a look at a few of these here I imply this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I mean it’s just I suggest consider the number of real clients that went through the program yeah this is the very end this is the celebration at the end when the check is validated the numbers are validated and the check is on the mail in the mail from the internal revenue service heading to the client so that’s how you’re able to track it you understand when you
get this you understand the check is chosen sure and that’s when they pay so they do not pay anything till they in fact receive the money they don’t pay bottom line Wonder trust anything till this letter is confirmed the check is on the way they transfer it into their bank account and they can genuinely trust Wonder trust that the procedure has been completed and the number of you think you’ve processed because you started this we have to do with 35 000 of these for
about six billion dollars wow so clearly they understand what they’re doing and that’s what you require you require 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 Wonderful here you’re at my YouTube channel we’re talking about something really important 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 till really recently and learned a lot about it because this is probably the lowest expense of capital for any small business anywhere
anytime if you have staff members between five and five hundred so I have actually got the professional with me this is Josh Fox he’s the founder and CEO of bottom line Concepts 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 up 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’ve become yes the Ambassador and paid representative for this I love this program it’s going away very soon you got to discover all about it let’s talk employee retention credit Josh Fox what is an ERC let’s just start there so during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act used organizations three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everybody it makes a huge distinction right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the money cash payroll tax refund all right go on sorry I simply have to make certain we got that point I indicate that’s a big distinction a loan versus money money I like cash money that’s what we’re discussing 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 initial cares Act is the ERC and yes Kevin it is a beautiful tough check in the mail where you get actual money from the internal revenue service all right so let’s talk about how it works since it seems like to me if it’s a if it’s worker retention credit that individual had to be a staff member so I’m going to make the Assumption this money is not for the owner not for people on the cap table not for investors it’s for staff members right you had to have owned a business but it’s based upon you having W-2 employees in America not 10.99. As long as you had W-2 employees 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 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 three of 2021. alright so that’s how it’s measured you need to be on the W-2 throughout that duration now let’s talk my favorite part cash how much can you get back per staff member that was on a W-2 in those 6 quarters so the estimation in 2020 to be exact Kevin is 50 of the worker’s wage to an optimum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers escalated to 70 of the worker’s income to a maximum of seven thousand per quarter how did that take place um they just changed the rules in.
2021 versus because the chaos 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 after that what takes place 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 six thousand dollars per worker that is since that’s a lot of cash it is now there’s a caveat here the PPP money would need to be decreased from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would reduce the 26 000 so what we’re seeing typically Kevin is if you took PPP money someplace around 10 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 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 undoubtedly now the huge concern is why does no one understand about this since look when I first found out about this when I initially met Josh you know I have actually got lots of financial investments in great deals of business I’m a significant advocate for entrepreneurship in America and make many 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 think it since I use the PPP we went through the money center Banks to get it it was extremely 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 survive during 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 good friends Governor Senators they didn’t know about it I mean that’s how you understand that’s how false information is that there’s no info out there then a bunch of individuals told me well you can’t get it due to the fact that you took the PPP also not true so let’s ask Josh why does no one understand about the employee retention credit you know what’s fascinating you’re discussing the banks Kevin since in the PPP loan process the federal government made it very clear that if you desired 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 turmoil because keep in mind in the initial cares act you might not do 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 refraining from 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 really she or he’s never ever done it in the past 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 business your accounting professional no your accountant’s never ever done this before unless you have an account that entered into this business and bottom line my firm Kevin has been in business since 2009 and we’ve been working with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 business so a lot of our big big business clients have worked with bottom line to recover other government programs we have actually 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.
companies to keep employees on their payroll. The credit is 50% of up to $10,000 in earnings paid by an.
Because of COVID-19 or whose gross receipts, company whose company is completely or partially suspended.
decrease by more than 50%.
1. The credit is offered to all employers despite size consisting of tax exempt organizations. There are.
just two exceptions: (1) state and city governments and their instrumentalities and (2) little.
companies who take Small Business Loans.
2. To qualify, the company needs to satisfy one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s service is completely or partly suspended by government order due to COVID-19.
throughout 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.
Calculation of the Credit.
The quantity of the credit is 50% of the certifying wages paid up to $10,000 in total.
It works for earnings paid after March 13th and prior to December 31, 2020.
The definition of qualifying wages differs by whether an employer had, on average, basically than.
100 workers in 2019.
Companies that focus on ERC filing assistance typically offer proficiency and assistance to help businesses navigate the complex procedure of claiming the credit. They can use numerous services, including:.
How is the employee retention credit calculated? Employee Retention Credit Chart
Eligibility Assessment: These business will assess your organization’s eligibility for the ERC based upon factors such as your industry, income, and operations. They can assist determine if you meet the requirements for the credit and recognize the maximum credit quantity you can declare.
Documents and Calculation: ERC filing services will help in gathering the essential documents, such as payroll records and monetary statements, to support your claim. They will also help calculate the credit quantity based on qualified incomes and other qualifying expenditures.
Retroactive Claim Review: If you are qualified to declare the ERC for previous quarters, these companies can examine your previous payroll records and financials to determine potential opportunities for retroactive credits. They can assist you change previous tax returns to declare these refunds.
Filing Help: Business focusing on ERC filings will prepare and send the essential types and documents in your place. This consists of finishing Kind 941 or any other necessary tax forms.
Compliance and Updates: ERC regulations and guidance have developed with time. These companies remain updated with the latest modifications and make sure that your filings adhere to the most present standards. If the Internal revenue service demands additional information or conducts an audit related to your ERC claim, they can likewise offer continuous assistance.
It is necessary to research study and vet any company offering ERC filing assistance to guarantee their reliability and proficiency. Try to find established firms with experience in tax and payroll services, or consider reaching out to trusted accounting companies or tax specialists who offer ERC submitting support.
Keep in mind that while these business can provide important help, it’s always a good idea to have a standard understanding of the ERC requirements and procedure yourself. This will assist you make informed choices 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 goal of the ERC is to motivate businesses to maintain and pay their workers throughout the pandemic, even if their operations have been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to eligible employers, consisting of for-profit businesses, tax-exempt organizations, and certain governmental entities. To qualify, employers need to satisfy one of two criteria:.
Business operations were completely or partly suspended due to a government order related to COVID-19.
Business experienced a substantial decline in gross invoices. As discussed earlier, for 2021, a significant decline is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a considerable decrease is defined 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.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount amounts to a percentage (approximately 70%) of certified wages paid to employees, including certain health plan costs. The optimum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, organizations that received a Paycheck Security Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 permits services to claim the ERC even if they got a PPP loan. However, the very same earnings can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively broadened and improved, enabling qualified employers to claim the credit for qualified incomes paid as far back as March 13, 2020. This retroactive provision supplies an opportunity for companies to change prior-year tax returns and get refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their work income tax return, generally Kind 941. If the credit surpasses the quantity of work taxes owed, the excess can be refunded to the company.
It is very important to keep in mind that the ERC provisions and eligibility requirements have actually evolved over time. The best course of action is to speak with a tax professional or visit the official internal revenue service site for the most current and comprehensive details concerning the ERC, including any recent legal changes or updates.
To get approved for the ERC, a service should fulfill one of the following requirements:.
Business operations were fully or partly suspended due to a government order related to COVID-19.
The business experienced a substantial decrease in gross invoices. For 2021, a considerable decline is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross receipts compared to the immediately preceding quarter.
The ERC is offered to companies of all sizes, consisting of tax-exempt organizations, but there are some exceptions. Government entities and services that got a PPP loan may have constraints on declaring the credit.
The process for declaring the ERC involves finishing the needed types and consisting of the credit on your work tax return (generally Form 941). The exact time it takes to process the credit can differ based upon numerous elements, consisting of the complexity of your organization and the work of the IRS. It’s advised to consult with a tax expert for assistance specific to your circumstance.
There are a number of business that can help with the process of declaring the ERC. These consist of accounting firms, tax advisory services, and payroll provider. Some widely known business that provide help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research study and call these business straight to ask about their charges and services.
Please keep in mind that the information supplied here is based on general understanding and might not show the most recent updates or changes to the ERC. It is very important to talk to a tax expert or check out the official IRS site for the most up-to-date and precise info concerning eligibility, declaring procedures, and offered help.
Less than 100. The credit is based if the employer had 100 or less employees on average in 2019.
on incomes paid to all workers whether they really worked or not. Simply put, even if the.
staff members worked full-time and got paid for full-time work, the company still gets the credit.
Greater than 100. If the company had more than 100 workers on average in 2019, then the credit is.
allowed just for earnings paid to workers who did not work throughout the calendar quarter.
In both cases, “salaries” includes not just cash payments however likewise a portion of the cost of employer.
offered healthcare. Employee Retention Credit Chart
Employers can be instantly repaid for the credit by minimizing the quantity of payroll taxes they.