Lets talk first about Employee Retention Credit M-1 :
Our team here what do these guys doing everyone in this space is helping teach people about ERC and uh constantly supply a lovely breakfast and have individuals actually learn about the program we must head to the space where we are able to display a few of the checks that we are getting for companies and I want to see that what is this this is uh hundreds of countless dollars literally Kevin numerous millions of dollars so these are replicate copies of the letters that go to customers verifying that the check is on the way I mean you know if you simply begin to look at some of these here I suggest this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I mean it’s simply I suggest think about the number of actual customers that went through the program yeah this is the very end this is the celebration at the end when the check is verified 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
get this you know the check is chosen sure which’s when they pay so they don’t pay anything up until they in fact get the cash they don’t pay bottom line Wonder trust anything up until this letter is confirmed the check is on the way they transfer it into their savings account and they can really rely on Wonder trust that the procedure has been finished and the number of you believe you have actually processed since you began this we have to do with 35 000 of these for
about 6 billion dollars wow so clearly they know what they’re doing which’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 discussing something really essential today the staff member retention credit which most of you have actually never heard of I definitely hadn’t heard of it till extremely just recently and learned a lot about it since this is probably the most affordable cost of capital for any small business anywhere
anytime if you have staff members in between 5 and five hundred so I have actually got the specialist 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 challenging this isn’t like PPP we simply phone your bank manager and state provide 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’ve ended up being yes the Ambassador and paid representative for this I like this program it’s disappearing very soon you got to find out 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 created the cares Act and the cares act used businesses three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost 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 cash money payroll tax refund all right go on sorry I just have to ensure we got that point I suggest that’s a huge difference a loan versus cash cash I like cash cash that’s what we’re talking about okay 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 actual money from the internal revenue service all right so let’s talk about how it works because it sounds like to me if it’s a if it’s worker retention credit that individual needed to be an employee so I’m going to make the Presumption this cash is not for the owner not for individuals on the cap table not for investors it’s for staff members right you had to have actually owned a company but it’s based on you having W-2 workers 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 need to be on payroll in 2020 on the W-2 and you need to be on payroll for the first six 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 three and 4 of 2020 and you had quarters one 2 and 3 of 2021. fine so that’s how it’s measured you need to be on the W-2 throughout that duration now let’s talk my preferred part cash just how much can you return per staff member that was on a W-2 in those 6 quarters so the estimation in 2020 to be precise Kevin is 50 of the worker’s income to a maximum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers escalated to 70 of the staff member’s wage to a maximum of seven thousand per quarter how did that happen um they just altered the rules in.
2021 versus due to the fact that 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 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 five thousand in twenty twenty that’s twenty six thousand dollars per worker that is because that’s a great deal of cash it is now there’s a caveat here the PPP cash would have to be reduced from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would minimize the 26 000 so what we’re seeing typically Kevin is if you took PPP cash someplace around ten thousand dollars a person so let’s say hypothetically you owned a dining establishment in New york city 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 internal revenue service so it’s big undoubtedly now the huge concern is why does no one know about this since look when I initially found out about this when I first satisfied Josh you understand I’ve got great deals of financial investments in lots of companies I’m a significant advocate for entrepreneurship in America and make numerous numerous investments in business owners of which many suffered through the pandemic when I first became aware of this I called BS I do not believe it since I utilize 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 which were well been worthy of and we utilized them carefully to survive throughout the pandemic so when I heard about this I said nah it can’t hold true however when I dug around I even contacted us to my political leader buddies Guv Senators they didn’t know about it I indicate that’s how you know that’s how misinformation is that there’s no details out there then a bunch of people informed me well you can’t get it since you took the PPP also not true so let’s ask Josh why does no one know about the staff member retention credit you know what’s fascinating you’re speaking about the banks Kevin due to the fact that 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 big banks in our nation and they would process process 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 turmoil due to the fact that remember in the original cares act you might not do both programs so if you had done PPP you could refrain from doing 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 government never made it clear to anyone about how to.
do this does your CFO know how to do this not really he or she’s never ever done it before 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 company your accounting professional no your accountant’s never done this before unless you have an account that entered into this service and bottom line my company Kevin has actually been in business considering that 2009 and we have actually been dealing with the federal government and the state federal government to recover cash for Fortune 500 Fortune 1000 business so a great deal of our huge huge business clients have worked with bottom line to recuperate other government programs we’ve done sales tax and use tax joblessness tax work chance tax credits research and development tax credits unclaimed property property tax all of these other federal 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 wages paid by an.
company whose company is totally or partially suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
1. The credit is offered to all employers regardless of size consisting of tax exempt companies. There are.
just two exceptions: (1) state and city governments and their instrumentalities and (2) little.
businesses who take Small company Loans.
2. To qualify, the company needs to meet one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s organization is totally 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. Once the.
employer’s gross invoices go above 80% of a comparable quarter in 2019 they no longer qualify.
after completion of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the certifying earnings paid up to $10,000 in total.
It is effective for salaries paid after March 13th and prior to December 31, 2020.
The meaning of qualifying incomes varies by whether an employer had, usually, more or less than.
100 staff members in 2019.
Companies that concentrate on ERC filing help typically supply proficiency and assistance to assist services browse the intricate procedure of declaring the credit. They can provide numerous services, including:.
How is the employee retention credit calculated? Employee Retention Credit M-1
Eligibility Evaluation: These companies will examine your business’s eligibility for the ERC based upon aspects such as your market, earnings, and operations. If you satisfy the requirements for the credit and recognize the optimum credit amount you can claim, they can assist figure out.
Documentation and Calculation: ERC filing services will help in collecting the needed documents, such as payroll records and financial declarations, to support your claim. They will also assist calculate the credit quantity based upon eligible wages and other certifying expenses.
Retroactive Claim Review: If you are eligible to declare the ERC for prior quarters, these companies can examine your past payroll records and financials to determine prospective opportunities for retroactive credits. They can assist you amend prior tax returns to claim these refunds.
Filing Support: Companies focusing on ERC filings will prepare and send the necessary kinds and documentation in your place. This includes finishing Type 941 or any other necessary tax return.
Compliance and Updates: ERC regulations and assistance have actually developed in time. These companies remain updated with the current changes and make sure that your filings adhere to the most present standards. They can also offer continuous support if the internal revenue service requests extra details or performs an audit related to your ERC claim.
It is necessary to research and vet any company providing ERC filing assistance to ensure their credibility and proficiency. Look for established firms with experience in tax and payroll services, or consider connecting to relied on accounting companies or tax experts who use ERC submitting assistance.
Remember that while these companies can offer important help, it’s constantly an excellent idea to have a basic 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 procedures. The goal of the ERC is to encourage companies to retain and pay their employees during the pandemic, even if their operations have actually been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to qualified employers, including for-profit companies, tax-exempt organizations, and certain governmental entities. To qualify, employers should satisfy one of two criteria:.
The business operations were completely or partly suspended due to a federal government order related to COVID-19.
Business experienced a considerable decrease in gross invoices. As mentioned previously, for 2021, a considerable decrease is defined as a 20% decline in gross invoices compared to the very 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% decrease in gross receipts compared to the right away preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount is equal to a percentage (as much as 70%) of qualified earnings paid to workers, consisting of specific 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: At first, organizations that received an Income Protection Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 allows services to declare the ERC even if they got a PPP loan. Nevertheless, the same salaries can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and boosted, enabling eligible companies to declare the credit for certified incomes paid as far back as March 13, 2020. This retroactive arrangement supplies an opportunity for companies to change prior-year income tax return and get refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their work income tax return, usually Kind 941. The excess can be refunded to the company if the credit exceeds the quantity of employment taxes owed.
It is essential to keep in mind that the ERC provisions and eligibility criteria have actually evolved gradually. The best strategy is to speak with a tax expert or go to the official IRS site for the most comprehensive and up-to-date details regarding the ERC, consisting of any recent legislative modifications or updates.
To get approved for the ERC, an organization should meet one of the following criteria:.
The business operations were completely or partly suspended due to a federal government order related to COVID-19.
Business experienced a considerable decrease in gross receipts. For 2021, a considerable decline is specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
The ERC is readily available to organizations of all sizes, consisting of tax-exempt companies, however there are some exceptions. For instance, government entities and businesses that received a PPP loan may have constraints on declaring the credit.
The procedure for declaring the ERC involves finishing the needed types and including the credit on your work tax return (generally Type 941). The exact time it requires to process the credit can differ based on a number of factors, including the intricacy of your company and the workload of the IRS. It’s recommended to speak with a tax expert for assistance particular to your situation.
There are several business that can help with the procedure of declaring the ERC. These consist of accounting firms, tax advisory services, and payroll provider. Some well-known business that provide help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research study and get in touch with these business directly to ask about their charges and services.
Please keep in mind that the details provided here is based upon basic knowledge and may not reflect the most recent updates or changes to the ERC. It is necessary to talk to a tax professional or check out the main internal revenue service website for the most accurate and up-to-date details relating to eligibility, claiming treatments, and offered help.
Less than 100. The credit is based if the company had 100 or fewer staff members on average in 2019.
on wages paid to all workers whether they in fact worked or not. In other words, even if the.
employees worked full time and got paid 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.
permitted only for incomes paid to staff members who did not work during the calendar quarter.
In both cases, “salaries” consists of not simply cash payments but also a portion of the cost of company.
offered health care. Employee Retention Credit M-1
Companies can be right away compensated for the credit by decreasing the quantity of payroll taxes they.