Lets talk first about Employee Retention Credit New Rules :
Our group here what do these people doing everyone in this room is helping teach people about ERC and uh constantly provide a beautiful breakfast and have people actually discover the program we ought to head to the space where we have the ability to display some of the checks that we are getting for companies and I ‘d like to see that what is this this is uh numerous countless dollars actually Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to clients validating that the check is on the method I imply you know if you simply start to take a look at a few of these here I suggest this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I imply it’s just I imply think about the number of real clients 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
receive this you know the check is opted for sure which’s when they pay so they don’t pay anything till they really receive the money they do not pay bottom line Wonder trust anything until this letter is verified the check is on the method they transfer it into their bank account and they can really trust Wonder trust that the process has actually been ended up and how many you believe you have actually processed given that you started this we’re about 35 000 of these for
about six billion dollars wow so clearly they know what they’re doing and that’s what you require you require professionals 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 Terrific here you’re at my YouTube channel we’re talking about something actually essential today the staff member retention credit which most of you have actually never ever heard of I definitely had not heard of it until really just recently and found out a lot about it because this is probably the lowest expense of capital for any small company anywhere
anytime if you have workers in between five and five hundred so I’ve got the professional with me this is Josh Fox he’s the creator and CEO of bottom line Concepts they’re the largest processor of these ERC credits this is a 170 page program so it’s not easy this isn’t like PPP we just phone your bank supervisor and state offer me a loan it doesn’t 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 ended up being yes the Ambassador and paid spokesperson for this I like this program it’s going away 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 provided businesses 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody it makes a big difference 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 alright go on sorry I simply need to ensure we got that point I suggest that’s a big distinction a loan versus money money I like cash 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 lovely difficult check in the mail where you get actual money from the internal revenue service all right so let’s discuss how it works because it seems like to me if it’s a if it’s worker retention credit that person needed to be a worker so I’m going to make the Presumption this cash is not for the owner not for individuals on the cap table not for shareholders it’s for staff members right you had to have actually owned a service but it’s based upon you having W-2 workers 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 first 6 months of 2021 on the W-2 right so there were six quarters the program was open well walk us through the 6 quarters so you had quarters two three and 4 of 2020 and you had quarters one two and three of 2021. fine so that’s how it’s measured you need to be on the W-2 during that period now let’s talk my preferred part money just how much can you get back per worker that was on a W-2 in those six quarters so the estimation in 2020 to be precise Kevin is 50 of the staff member’s salary to a maximum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s wage to an optimum of 7 thousand per quarter how did that happen um they just changed the rules in.
2021 versus due to the fact that the mayhem 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 up to 5 thousand Max and then what occurs 21 000 Max in 2021 oh that’s how you develop twenty six 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 great deal of money it is now there’s a caution here the PPP money would need to be reduced from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 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 City where I’m from and you had a hundred workers and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s big clearly now the big question is why does nobody understand about this since appearance when I first heard about this when I initially met Josh you know I have actually got great deals of financial investments in lots of companies I’m a significant advocate for entrepreneurship in America and make many many investments in business owners of which lots of suffered through the pandemic when I first found out 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 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 stay alive throughout the pandemic so when I heard about this I said nah it can’t hold true however when I dug around I even called to my politician buddies Governor Senators they didn’t understand about it I suggest that’s how you understand that’s how false information is that there’s no information out there then a lot of individuals informed me well you can’t get it since you took the PPP likewise not real so let’s ask Josh why does no one learn about the worker retention credit you understand what’s intriguing you’re discussing the banks Kevin since in the PPP loan process the federal government made it really 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 process in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply procedure process that’s all um and here there was turmoil due to the fact that keep in mind in the initial cares act you could not do both programs so if you had actually done PPP you could not do ERC in the initial program and when they altered 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 understand how to do this not really he or she’s never done it in the past do the banks do it nope the banks don’t do it the payroll business yeah some of them are doing it as a payroll business your accounting professional no your accounting professional’s never ever done this before unless you have an account that entered into this business and bottom line my firm Kevin has stayed in business considering that 2009 and we have actually been working with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 companies so a great deal of our big big corporate clients have actually worked with bottom line to recuperate other federal government programs we have actually done sales tax and use tax joblessness tax work opportunity tax credits research and development tax credits unclaimed home property tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit designed to encourage.
companies to keep employees on their payroll. The credit is 50% of as much as $10,000 in earnings paid by an.
company whose business is fully or partially suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
Accessibility.
1. The credit is available to all employers no matter size including tax exempt companies. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) little.
organizations who take Small Business Loans.
2. To qualify, the company needs to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s business is totally or partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the company’s gross invoices are below 50% of the comparable quarter in 2019. Once the.
company’s gross invoices exceed 80% of a comparable quarter in 2019 they no longer certify.
after completion of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the qualifying incomes paid up to $10,000 in total.
It works for salaries paid after March 13th and before December 31, 2020.
The definition of qualifying wages varies by whether a company had, on average, basically than.
100 employees in 2019.
Business that specialize in ERC filing support typically provide expertise and assistance to help organizations browse the complex procedure of claiming the credit. They can offer different services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit New Rules
Eligibility Assessment: These business will assess your business’s eligibility for the ERC based upon factors such as your industry, revenue, and operations. If you satisfy the requirements for the credit and recognize the maximum credit quantity you can declare, they can assist figure out.
Paperwork and Estimation: ERC filing services will help in collecting the necessary documents, such as payroll records and monetary declarations, to support your claim. They will also assist compute the credit amount based upon eligible wages and other qualifying expenses.
Retroactive Claim Review: If you are qualified to declare the ERC for prior quarters, these business can examine your previous payroll records and financials to determine possible chances for retroactive credits. They can assist you change prior income tax return to declare these refunds.
Filing Help: Business focusing on ERC filings will prepare and send the essential kinds and documentation on your behalf. This consists of finishing Form 941 or any other required tax return.
Compliance and Updates: ERC guidelines and assistance have progressed over time. These companies remain upgraded with the latest modifications and make sure that your filings comply with the most current standards. They can also offer ongoing assistance if the IRS requests extra info or carries out an audit related to your ERC claim.
It’s important to research study and vet any business providing ERC filing help to ensure their credibility and know-how. Search for recognized companies with experience in tax and payroll services, or consider reaching out to trusted accounting companies or tax specialists who provide ERC filing assistance.
Keep in mind that while these companies can offer valuable assistance, it’s always a good concept 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 presented by the U.S. government as part of COVID-19 relief procedures. The goal of the ERC is to encourage businesses to maintain and pay their employees during the pandemic, even if their operations have been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to eligible employers, including for-profit services, tax-exempt companies, and specific governmental entities. To certify, employers must satisfy one of two criteria:.
The business operations were totally or partially suspended due to a government order related to COVID-19.
The business experienced a significant decline in gross receipts. As mentioned earlier, for 2021, a substantial decline is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a substantial decline is defined as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the immediately 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 portion (as much as 70%) of qualified earnings paid to staff members, consisting of particular health plan expenditures. The optimum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, services that received an Income Defense Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 allows organizations to declare the ERC even if they received a PPP loan. However, the same salaries can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively broadened and boosted, permitting qualified employers to claim the credit for qualified earnings paid as far back as March 13, 2020. This retroactive provision offers an opportunity for businesses to amend prior-year income tax return and get refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their work tax returns, typically Form 941. The excess can be refunded to the company if the credit exceeds the amount of employment taxes owed.
It is essential to note that the ERC arrangements and eligibility criteria have evolved with time. The very best strategy is to speak with a tax expert or visit the main internal revenue service site for the most detailed and updated details regarding the ERC, consisting of any recent legislative changes or updates.
To qualify for the ERC, a service must meet among the following requirements:.
The business operations were fully or partially suspended due to a government order related to COVID-19.
The business experienced a substantial decline in gross invoices. 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 considerable decline is defined as a 20% decline in gross receipts compared to the very same quarter in 2019, or a 20% decline in gross invoices compared to the right away preceding quarter.
The ERC is available to businesses of all sizes, consisting of tax-exempt companies, however there are some exceptions. For example, federal government entities and organizations that received a PPP loan may have limitations on declaring the credit.
The process for claiming the ERC includes completing the needed forms and including the credit on your employment income tax return (generally Kind 941). The exact time it requires to process the credit can vary based on a number of factors, including the complexity of your service and the workload of the internal revenue service. It’s advised to speak with a tax expert for assistance specific to your situation.
There are numerous business that can help with the process of declaring the ERC. Some popular companies that offer support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the details offered here is based upon basic understanding and might not reflect the most current updates or changes to the ERC. It’s important to consult with a tax expert or go to the main IRS site for the most accurate and current information regarding eligibility, declaring procedures, and offered support.
Less than 100. The credit is based if the company had 100 or fewer staff members on average in 2019.
on salaries paid to all workers whether they really worked or not. To put it simply, even if the.
workers worked full time and made money for full-time work, the company still gets the credit.
Greater than 100. If the company had more than 100 staff members typically in 2019, then the credit is.
permitted only for salaries paid to employees who did not work during the calendar quarter.
In both cases, “incomes” includes not just money payments however also a portion of the expense of employer.
provided healthcare. Employee Retention Credit New Rules
Payment.
Companies can be immediately reimbursed for the credit by reducing the amount of payroll taxes they.