Lets talk first about Employee Retention Credit Election :
Our group here what do these people doing everyone in this space is assisting teach individuals about ERC and uh constantly provide a gorgeous breakfast and have individuals truly learn more about the program we need to head to the room where we are able to show some of the checks that we are getting for companies and I ‘d like to see that what is this this is uh numerous millions of dollars actually Kevin hundreds of 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 simply start to 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 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 party at the end when the check is verified the numbers are verified and the check is on the mail in the mail from the internal revenue service heading to the customer so that’s how you have the ability 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 until they really receive the cash they do not pay bottom line Wonder trust anything up until this letter is validated the check is on the way they deposit it into their savings account and they can truly rely on Wonder trust that the process has actually been ended up and how many you believe you have actually processed considering that you started 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 need specialists 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 Wonderful here you’re at my YouTube channel we’re speaking about something really essential today the staff member retention credit which most of you have actually never ever become aware of I certainly had not heard of it until very just recently and learned a lot about it due to the fact that this is most likely the most affordable expense of capital for any small company anywhere
anytime if you have employees in between 5 and five hundred so I’ve got the expert with me this is Josh Fox he’s the founder 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 supervisor and state provide me a loan it doesn’t 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 ended up being 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 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 offered organizations three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody it makes a big distinction right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the money cash payroll tax refund all right go on sorry I simply have to make sure we got that point I mean that’s a huge distinction a loan versus cash money I like cash cash that’s what we’re talking 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 initial cares Act is the ERC and yes Kevin it is a beautiful hard check in the mail where you get real money from the IRS all right so let’s speak about how it works since it sounds like to me if it’s a if it’s worker retention credit that individual had 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 needed to have owned an organization however it’s based on you having W-2 workers in America not 10.99. As long as you had W-2 workers 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 six quarters the program was open well walk us through the 6 quarters so you had quarters 2 three and four of 2020 and you had quarters one two and 3 of 2021. all right so that’s how it’s measured you have to be on the W-2 throughout that duration now let’s talk my favorite part money just how much can you return per worker that was on a W-2 in those 6 quarters so the calculation in 2020 to be precise Kevin is 50 of the employee’s salary to an optimum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers escalated to 70 of the worker’s wage to an optimum of 7 thousand per quarter how did that occur um they simply altered the rules in.
2021 versus since the chaos 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 5 thousand Max and after that what happens 21 000 Max in 2021 oh that’s how you come up with twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per employee that is because that’s a great deal of cash it is now there’s a caution here the PPP money would need to be minimized from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would decrease the 26 000 so what we’re seeing on average Kevin is if you took PPP cash someplace around ten thousand dollars a person 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 cash 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 nobody understand about this since look when I first heard about this when I initially satisfied Josh you understand I have actually got great deals of financial investments in lots of business I’m a major supporter for entrepreneurship in America and make lots of numerous financial investments in entrepreneurs of which lots of suffered through the pandemic when I first found out about this I called BS I do not think it because 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 and that were well deserved and we used 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 contacted us to my political leader pals Governor Senators they didn’t know about it I suggest that’s how you understand that’s how false information is that there’s no information out there then a bunch 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 no one know about the employee retention credit you understand what’s interesting you’re speaking about the banks Kevin since in the PPP loan process the federal government made it extremely clear that if you desired a PPP loan you would call Wells Fargo Citibank Bank of America any of the big 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 simply process process that’s all um and here there was turmoil since keep in mind in the original cares act you could refrain from doing both programs so if you had done PPP you could not do ERC in the original program and when they changed the law in 2021 the banks were not doing ERC since it’s not alone so you’re getting a tax refund so the government never ever made it clear to anybody about how to.
do this does your CFO understand how to do this not really 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 company your accountant no your accounting professional’s never ever done this prior to unless you have an account that entered into this organization and bottom line my firm Kevin has actually been in business given that 2009 and we have actually been dealing with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 companies so a lot of our big huge business customers have actually worked with bottom line to recover other federal government programs we’ve done sales tax and use 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 created to motivate.
employers to keep employees on their payroll. The credit is 50% of up to $10,000 in incomes paid by an.
Due to the fact that of COVID-19 or whose gross receipts, company whose service is totally or partly suspended.
decrease by more than 50%.
1. The credit is offered to all employers regardless of size consisting of tax exempt companies. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) little.
services who take Small company Loans.
2. To qualify, the company has to satisfy one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s company is totally or partially suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross receipts are listed below 50% of the comparable quarter in 2019. When the.
company’s gross invoices exceed 80% of an equivalent quarter in 2019 they no longer qualify.
after completion of that quarter.
Computation of the Credit.
The quantity of the credit is 50% of the qualifying wages paid up to $10,000 in overall.
It is effective for wages paid after March 13th and before December 31, 2020.
The definition of qualifying incomes varies by whether a company had, on average, basically than.
100 staff members in 2019.
Companies that specialize in ERC filing support normally provide competence and assistance to assist businesses navigate the intricate process of claiming the credit. They can use numerous services, including:.
How is the employee retention credit calculated? Employee Retention Credit Election
Eligibility Evaluation: These companies will evaluate your company’s eligibility for the ERC based on aspects such as your market, earnings, and operations. If you satisfy the requirements for the credit and identify the optimum credit amount you can declare, they can help determine.
Paperwork and Estimation: ERC filing services will assist in collecting the required documentation, such as payroll records and financial statements, to support your claim. They will likewise help calculate the credit amount based upon qualified incomes and other qualifying costs.
Retroactive Claim Review: If you are eligible to declare the ERC for previous quarters, these companies can evaluate your past payroll records and financials to identify prospective opportunities for retroactive credits. They can assist you amend previous income tax return to claim these refunds.
Filing Help: Business concentrating on ERC filings will prepare and send the required forms and documents in your place. This consists of completing Form 941 or any other necessary tax return.
Compliance and Updates: ERC policies and assistance have actually developed over time. These business remain upgraded with the latest changes and make sure that your filings adhere to the most present standards. They can also offer continuous support if the internal revenue service demands additional details or performs an audit related to your ERC claim.
It is very important to research study and veterinarian any business providing ERC filing help to guarantee their trustworthiness and knowledge. Look for established companies with experience in tax and payroll services, or consider reaching out to trusted accounting firms or tax experts who offer ERC filing assistance.
Remember that while these business can offer important help, it’s constantly an excellent idea to have a standard understanding of the ERC requirements and process yourself. This will help you make informed decisions and guarantee precise filings.
The Worker Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief steps. The goal of the ERC is to motivate organizations to maintain and pay their employees throughout 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 companies, consisting of for-profit organizations, tax-exempt companies, and particular governmental entities. To qualify, employers should satisfy one of two requirements:.
The business operations were completely or partially suspended due to a federal government order related to COVID-19.
The business experienced a substantial decrease in gross receipts. As mentioned previously, for 2021, a considerable decrease 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 specified as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
Credit Quantity: 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 (approximately 70%) of qualified incomes paid to employees, including certain health insurance expenses. The maximum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, organizations that received a Paycheck Protection Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 enables organizations to claim the ERC even if they received a PPP loan. The exact same incomes can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively broadened and enhanced, permitting qualified companies to declare the credit for qualified incomes paid as far back as March 13, 2020. This retroactive arrangement offers a chance for businesses to change prior-year income tax return and receive refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their employment income tax return, typically Type 941. If the credit surpasses the amount of employment taxes owed, the excess can be refunded to the employer.
It’s important to note that the ERC provisions and eligibility criteria have progressed in time. The very best course of action is to speak with a tax professional or check out the main IRS website for the most detailed and up-to-date information relating to the ERC, consisting of any current legislative changes or updates.
To qualify for the ERC, a company needs to meet one of the following criteria:.
The business operations were fully or partially suspended due to a federal government order related to COVID-19.
The business experienced a significant decline in gross receipts. 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 substantial decline is defined as a 20% decrease in gross receipts 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, including tax-exempt companies, but there are some exceptions. For example, federal government entities and companies that got a PPP loan may have limitations on declaring the credit.
The process for declaring the ERC includes completing the essential kinds and consisting of the credit on your work income tax return (normally Kind 941). The exact time it requires to process the credit can vary based upon numerous aspects, including the complexity of your organization and the workload of the internal revenue service. It’s suggested to consult with a tax professional for guidance specific to your situation.
There are a number of companies that can help with the process of declaring the ERC. These include accounting firms, tax advisory services, and payroll company. Some popular companies that use support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research study and contact these business directly to ask about their fees and services.
Please keep in mind that the details offered here is based upon general knowledge and may not reflect the most recent updates or changes to the ERC. It’s important to consult with a tax professional or visit the official internal revenue service website for the most accurate and current information relating to eligibility, declaring treatments, and readily available support.
Less than 100. The credit is based if the company had 100 or less workers on average in 2019.
on earnings paid to all staff members 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. The credit is if the company had more than 100 workers on average in 2019.
enabled only for earnings paid to workers who did not work throughout the calendar quarter.
In both cases, “earnings” includes not simply cash payments but likewise a portion of the cost of company.
provided health care. Employee Retention Credit Election
Employers can be instantly repaid for the credit by reducing the quantity of payroll taxes they.