Lets talk first about Employee Retention Credit During Covid :
Our group here what do these men doing everyone in this room is assisting teach people about ERC and uh always offer a gorgeous breakfast and have people actually find out about the program we ought to head to the space where we are able to show some 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 numerous millions of dollars so these are duplicate copies of the letters that go to clients verifying that the check is on the method I mean you understand if you just start to look at some of these here I imply this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I imply it’s simply I indicate think of how many real customers 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 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 understand when you
receive this you understand the check is opted for sure which’s when they pay so they don’t pay anything up until they actually get the money they don’t pay bottom line Wonder trust anything until this letter is verified the check is on the method they deposit it into their bank account and they can genuinely trust Wonder trust that the procedure has actually been completed and the number of you think you’ve processed because you started this we’re about 35 000 of these for
about 6 billion dollars wow so plainly they understand what they’re doing which’s what you need you need professionals 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 speaking about something actually crucial today the staff member retention credit which the majority of you have actually never become aware of I certainly had not become aware of it till extremely recently and discovered 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 employees 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 Ideas 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 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 all of us about it and how to get it and why I have actually become yes the Ambassador and paid representative for this I enjoy this program it’s going away very soon you got to discover all about it let’s talk worker retention credit Josh Fox what is an ERC let’s just start there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act provided businesses 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.
remedy the cash cash payroll tax refund okay go on sorry I just have to make certain we got that point I imply that’s a big distinction a loan versus money money I like money cash that’s what we’re talking about fine 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 real cash from the internal revenue service all right so let’s talk about how it works because it seems like to me if it’s a if it’s staff member retention credit that individual needed to be a staff member 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 needed to have actually owned a business but it’s based upon 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 very first 6 months of 2021 on the W-2 correct so there were 6 quarters the program was open well stroll us through the six quarters so you had quarters two 3 and 4 of 2020 and you had quarters one two and 3 of 2021. fine so that’s how it’s measured you have to be on the W-2 throughout that duration now let’s talk my preferred part money how much can you get back per worker that was on a W-2 in those six quarters so the calculation in 2020 to be precise Kevin is 50 of the worker’s salary to a maximum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the worker’s income to a maximum of 7 thousand per quarter how did that occur um they just altered the rules in.
2021 versus since 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 approximately five thousand Max and after that what takes place 21 000 Max in 2021 oh that’s how you create twenty 6 thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty six thousand dollars per staff member that is since that’s a lot of money it is now there’s a caution here the PPP money would have to be minimized 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 money someplace around 10 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 workers and you took PPP money you would still get a million dollar in the mail from the IRS so it’s substantial undoubtedly now the big concern is why does no one know about this since appearance when I initially heard about this when I initially met Josh you know I have actually got great deals of investments in lots of business I’m a major supporter for entrepreneurship in America and make numerous numerous financial investments in entrepreneurs of which many suffered through the pandemic when I first became aware of 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 very easy to do we had our CEOs call the banks they got their loans and that were well should have and we used them carefully to stay alive throughout the pandemic so when I heard about this I stated nah it can’t be true but when I dug around I even contacted us to my politician buddies Guv Senators they didn’t know about it I mean that’s how you know that’s how false information is that there’s no details out there then a bunch of people informed me well you can’t get it because you took the PPP also not true so let’s ask Josh why does no one understand about the staff member 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 wanted a PPP loan you would call Wells Fargo Citibank Bank of America any of the huge banks in our country and they would process procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s just process procedure that’s all um and here there was chaos due to the fact that 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 not doing ERC due to the fact that 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 actually he or she’s never ever done it previously do the banks do it nope the banks do not do it the payroll business yeah a few of them are doing it as a payroll business your accounting professional no your accounting professional’s never done this before unless you have an account that entered into this company and bottom line my company Kevin has stayed in business considering that 2009 and we have actually been working with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 companies so a great deal of our huge big corporate customers have dealt with bottom line to recuperate other government programs we’ve done sales tax and use tax joblessness tax work opportunity tax credits research and development tax credits unclaimed home real estate tax all of these other government programs.
The staff member retention tax credit is a broad based refundable tax credit designed to encourage.
companies to keep staff members on their payroll. The credit is 50% of approximately $10,000 in salaries paid by an.
Due to the fact that of COVID-19 or whose gross invoices, employer whose company is completely or partly suspended.
decrease by more than 50%.
1. The credit is readily available to all companies regardless of size consisting of tax exempt organizations. There are.
just two exceptions: (1) state and city governments and their instrumentalities and (2) little.
organizations who take Small company Loans.
2. To qualify, the company has to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s organization is completely or partially suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross receipts are below 50% of the similar quarter in 2019. As soon as the.
employer’s gross receipts exceed 80% of a comparable quarter in 2019 they no longer qualify.
after the end of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the certifying wages paid up to $10,000 in overall.
It works for incomes paid after March 13th and before December 31, 2020.
The meaning of qualifying wages differs by whether a company had, on average, more or less than.
100 workers in 2019.
Companies that focus on ERC filing help usually offer know-how and support to help businesses navigate the intricate process of declaring the credit. They can provide numerous services, including:.
How is the employee retention credit calculated? Employee Retention Credit During Covid
Eligibility Evaluation: These companies will examine your service’s eligibility for the ERC based upon aspects such as your market, revenue, and operations. They can assist figure out if you meet the requirements for the credit and recognize the maximum credit amount you can declare.
Paperwork and Computation: ERC filing services will help in collecting the required paperwork, such as payroll records and monetary declarations, to support your claim. They will likewise assist determine the credit amount based upon eligible earnings and other certifying expenses.
Retroactive Claim Review: If you are eligible to declare the ERC for prior quarters, these companies can review your past payroll records and financials to recognize potential opportunities for retroactive credits. They can help you amend prior income tax return to declare these refunds.
Filing Support: Business specializing in ERC filings will prepare and send the required forms and paperwork on your behalf. This includes finishing Kind 941 or any other required tax return.
Compliance and Updates: ERC regulations and assistance have actually developed with time. These business stay updated with the most recent changes and make sure that your filings comply with the most existing guidelines. They can likewise supply continuous support if the internal revenue service demands additional details or performs an audit related to your ERC claim.
It is essential to research study and vet any company providing ERC filing assistance to ensure their credibility and competence. Look for established companies with experience in tax and payroll services, or think about connecting to trusted accounting firms or tax specialists who provide ERC submitting assistance.
Remember that while these business can provide valuable support, it’s always a good concept to have a standard understanding of the ERC requirements and process yourself. This will help you make informed decisions and make sure accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief steps. The goal of the ERC is to motivate organizations to maintain and pay their staff members during the pandemic, even if their operations have actually been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to qualified companies, including for-profit businesses, tax-exempt companies, and particular governmental entities. To qualify, companies need to meet one of two requirements:.
The business operations were totally or partly suspended due to a government order related to COVID-19.
Business experienced a substantial decrease in gross invoices. As pointed out earlier, for 2021, a significant decrease is defined as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decrease in gross invoices compared to the exact 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 employer’s share of Social Security taxes. The credit quantity is equal to a percentage (up to 70%) of certified salaries paid to employees, including particular health insurance expenses. 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: Initially, businesses that received a Paycheck Protection Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 permits organizations to claim the ERC even if they got a PPP loan. Nevertheless, the exact 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 enhanced, permitting eligible employers to claim the credit for certified incomes paid as far back as March 13, 2020. This retroactive provision provides a chance for companies to modify prior-year tax returns and receive refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their work income tax return, usually Type 941. If the credit goes beyond the amount of employment taxes owed, the excess can be refunded to the company.
It is very important to note that the ERC arrangements and eligibility criteria have developed gradually. The very best course of action is to consult with a tax expert or visit the main IRS site for the most up-to-date and comprehensive info regarding the ERC, including any recent legislative modifications or updates.
To receive the ERC, a business must meet among the following criteria:.
Business operations were totally or partially suspended due to a federal government order related to COVID-19.
The business experienced a considerable decline in gross receipts. For 2021, a substantial decline is defined as a 20% decrease in gross invoices 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 exact same quarter in 2019, or a 20% decline in gross receipts compared to the instantly preceding quarter.
The ERC is readily available to services of all sizes, including tax-exempt organizations, however there are some exceptions. Federal government entities and organizations that got a PPP loan may have limitations on claiming the credit.
The process for claiming the ERC includes completing the essential forms and including the credit on your work tax return (normally Form 941). The exact time it requires to process the credit can differ based upon numerous factors, consisting of the complexity of your company and the workload of the IRS. It’s recommended to speak with a tax professional for assistance particular to your circumstance.
There are numerous business that can aid with the procedure of declaring the ERC. These consist of accounting firms, tax advisory services, and payroll provider. Some well-known business that offer support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research and get in touch with these companies straight to ask about their charges and services.
Please note that the details supplied here is based on general knowledge and might not reflect the most recent updates or modifications to the ERC. It is essential to consult with a tax professional or go to the official internal revenue service website for the most precise and updated details concerning eligibility, claiming procedures, and readily available assistance.
Less than 100. If the company had 100 or less staff members on average in 2019, then the credit is based.
on wages paid to all staff members whether they actually worked or not. Simply put, even if the.
workers worked full time and made money for full-time work, the employer still gets the credit.
Greater than 100. If the employer had more than 100 staff members on average in 2019, then the credit is.
enabled only for wages paid to employees who did not work throughout the calendar quarter.
In both cases, “salaries” consists of not simply cash payments but likewise a portion of the cost of employer.
supplied health care. Employee Retention Credit During Covid
Employers can be instantly repaid for the credit by minimizing the quantity of payroll taxes they.