Lets talk first about Employee Retention Credit Fact Sheet :
Our group here what do these people doing everybody in this room is assisting teach individuals about ERC and uh always supply a gorgeous breakfast and have individuals truly learn about the program we must head to the space where we have the ability to display some of the checks that we are getting for business and I want to see that what is this this is uh hundreds of 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 know if you just begin 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 imply think of how many real clients that went through the program yeah this is the very end this is the party at the end when the check is confirmed the numbers are confirmed 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 know when you
get this you know the check is opted for sure and that’s when they pay so they do not pay anything up until they in fact get the money they don’t pay bottom line Wonder trust anything till 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 finished and how many you think you have actually processed because you started this we have to do with 35 000 of these for
about 6 billion dollars wow so clearly they understand what they’re doing and that’s what you need 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 talking about something really essential today the worker retention credit which the majority of you have actually never ever heard of I certainly had not become aware of it until very recently and discovered a lot about it due to the fact that this is most likely the most affordable cost of capital for any small company anywhere
anytime if you have workers 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 Ideas they’re the biggest processor of these ERC credits this is a 170 page program so it’s challenging this isn’t like PPP we simply phone your bank supervisor and state offer me a loan it does not work there’s not a loan it’s an application and Josh is going to inform us all 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 soon you got to learn everything about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply 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 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everyone 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 cash cash payroll tax refund all right go on sorry I just need to make sure we got that point I suggest that’s a big difference a loan versus money cash I like money 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 lovely hard check in the mail where you get actual cash from the internal revenue service all right so let’s discuss 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 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 shareholders it’s for workers right you had to have owned an organization however it’s based upon 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 eligible 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 proper so there were six 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 two and 3 of 2021. all right so that’s how it’s determined you have to be on the W-2 during that period now let’s talk my favorite part cash just how much can you return per employee that was on a W-2 in those 6 quarters so the estimation in 2020 to be specific Kevin is 50 of the employee’s salary to a maximum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers escalated to 70 of the employee’s wage to an optimum of seven thousand per quarter how did that take place um they simply changed the rules in.
2021 versus because the chaos of the pandemic so they wanted 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 as much as 5 thousand Max and after that what happens 21 000 Max in 2021 oh that’s how you develop twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty 6 thousand dollars per staff member that is because that’s a great deal of money it is now there’s a caveat 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 lower the 26 000 so what we’re seeing usually Kevin is if you took PPP cash somewhere around 10 thousand dollars a person so let’s say hypothetically you owned a restaurant 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 IRS so it’s huge undoubtedly now the huge question is why does no one understand about this due to the fact that look when I initially found out about this when I first fulfilled Josh you understand I have actually got great deals of financial investments in great deals of business I’m a significant supporter for entrepreneurship in America and make lots of numerous financial investments in business owners of which many suffered through the pandemic when I first heard about 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 really easy to do we had our CEOs call the banks they got their loans which were well been worthy of 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 political leader good friends 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 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 know about the worker retention credit you understand what’s intriguing you’re talking about the banks Kevin since in the PPP loan process the federal government made it really 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 just procedure process that’s all um and here there was mayhem because remember in the initial cares act you might refrain from doing both programs so if you had done PPP you might not do ERC in the initial 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 federal government never ever made it clear to anyone about how to.
do this does your CFO understand how to do this not truly he or she’s never done it in the past do the banks do it nope the banks don’t do it the payroll companies yeah a few 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 company and bottom line my firm Kevin has actually stayed 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 corporate customers have worked with bottom line to recover other federal government programs we have actually done sales tax and utilize tax joblessness tax work chance tax credits research and development tax credits unclaimed home property 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 staff members on their payroll. The credit is 50% of as much as $10,000 in incomes paid by an.
employer whose service is fully or partially suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
1. The credit is available to all companies regardless of size consisting of tax exempt organizations. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) small.
companies who take Small Business Loans.
2. To qualify, the company has to satisfy one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s organization is completely or partially suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross receipts are below 50% of the comparable quarter in 2019. When the.
company’s gross receipts exceed 80% of a comparable quarter in 2019 they no longer certify.
after completion 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 is effective for salaries paid after March 13th and prior to December 31, 2020.
The meaning of qualifying incomes differs by whether an employer had, typically, more or less than.
100 staff members in 2019.
Business that focus on ERC filing assistance generally offer knowledge and support to help services navigate the intricate procedure of claiming the credit. They can offer different services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Fact Sheet
Eligibility Assessment: These business will evaluate your service’s eligibility for the ERC based upon elements such as your market, earnings, and operations. They can help determine if you meet the requirements for the credit and recognize the maximum credit amount you can claim.
Documentation and Computation: ERC filing services will assist in collecting the essential paperwork, such as payroll records and monetary declarations, to support your claim. They will also assist calculate the credit amount based upon qualified salaries and other certifying costs.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for prior quarters, these business can review your past payroll records and financials to recognize prospective chances for retroactive credits. They can assist you modify previous tax returns to claim these refunds.
Filing Help: Companies concentrating on ERC filings will prepare and submit the required kinds and documents on your behalf. This consists of completing Kind 941 or any other necessary tax forms.
Compliance and Updates: ERC policies and guidance have actually evolved with time. These companies remain upgraded with the latest changes and guarantee that your filings comply with the most existing standards. They can also supply ongoing support if the internal revenue service requests extra details or carries out an audit related to your ERC claim.
It is essential to research and vet any company offering ERC filing assistance to ensure their reliability and expertise. Search for recognized companies with experience in tax and payroll services, or consider reaching out to trusted accounting companies or tax specialists who offer ERC filing assistance.
Keep in mind that while these business can provide valuable support, it’s always an excellent idea to have a standard understanding of the ERC requirements and process yourself. This will assist you make informed choices and make sure accurate filings.
The Worker Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief measures. The objective of the ERC is to encourage services to keep and pay their staff members throughout the pandemic, even if their operations have actually been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to eligible employers, consisting of for-profit businesses, tax-exempt companies, and certain governmental entities. To certify, employers should satisfy one of two requirements:.
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 mentioned earlier, for 2021, a considerable decrease is specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decline in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross receipts 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 portion (approximately 70%) of certified wages paid to employees, including certain health insurance costs. The optimum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, services that received a Paycheck Defense Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 allows businesses to declare the ERC even if they got a PPP loan. Nevertheless, the exact same wages can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and improved, enabling qualified employers to claim the credit for qualified wages paid as far back as March 13, 2020. This retroactive arrangement supplies a chance for organizations to modify prior-year tax returns and receive refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their employment tax returns, generally Type 941. If the credit exceeds the amount of employment taxes owed, the excess can be refunded to the company.
It is necessary to note that the ERC provisions and eligibility requirements have actually developed in time. The very best course of action is to consult with a tax professional or go to the main internal revenue service site for the most current and in-depth details concerning the ERC, consisting of any current legal changes or updates.
To qualify for the ERC, a company should meet one of the following requirements:.
The business operations were completely or partially suspended due to a government order related to COVID-19.
The business experienced a considerable decrease in gross receipts. For 2021, a considerable decrease is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
The ERC is readily available to organizations of all sizes, consisting of tax-exempt companies, but there are some exceptions. Federal government entities and businesses that got a PPP loan might have constraints on claiming the credit.
The procedure for declaring the ERC includes completing the required kinds and including the credit on your employment income tax return (usually Form 941). The exact time it requires to process the credit can differ based upon numerous factors, including the complexity of your company and the workload of the IRS. It’s advised to talk to a tax professional for guidance specific to your situation.
There are several business that can help with the process of declaring the ERC. Some widely known business that provide assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the info offered here is based upon general knowledge and might not show the most current updates or modifications to the ERC. It is necessary to consult with a tax professional or go to the official IRS website for the most precise and current information relating to eligibility, claiming procedures, and available help.
Less than 100. If the employer had 100 or less employees typically in 2019, then the credit is based.
on earnings paid to all staff members whether they actually worked or not. In other words, even if the.
employees worked full time and made 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.
allowed just for salaries paid to employees who did not work during the calendar quarter.
In both cases, “earnings” includes not just cash payments however likewise a part of the cost of company.
provided health care. Employee Retention Credit Fact Sheet
Employers can be right away compensated for the credit by minimizing the amount of payroll taxes they.