FAQ: Employee Retention Credit Nitti 2023

Lets talk first about Employee Retention Credit Nitti :

Our group here what do these guys doing everyone in this room is helping teach people about ERC and uh constantly offer a gorgeous breakfast and have people actually learn about the program we ought to head to the room 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 numerous countless dollars literally Kevin numerous millions of dollars so these are duplicate copies of the letters that go to customers verifying that the check is on the way I imply you understand if you just begin to take a 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 suggest it’s just I suggest consider the number of actual clients that went through the program yeah this is the very end this is the party at the end when the check is validated the numbers are validated and the check is on the mail in the mail from the IRS heading to the customer so that’s how you’re able to track it you understand when you

get this you understand the check is opted for sure which’s when they pay so they do not pay anything up until they in fact receive the cash they don’t pay bottom line Wonder trust anything up until this letter is validated the check is on the method they deposit it into their savings account and they can truly trust Wonder trust that the process has been completed and how many you believe you’ve processed because you began this we’re about 35 000 of these for

 


about six billion dollars wow so clearly they understand what they’re doing which’s what you need you require 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 Fantastic here you’re at my YouTube channel we’re discussing something actually essential today the worker retention credit which the majority of you have actually never ever become aware of I definitely had not become aware of it up until extremely recently and discovered a lot about it since this is most likely the lowest cost of capital for any small company anywhere

anytime if you have workers in between five and five hundred so I have actually got the expert with me this is Josh Fox he’s the founder and CEO of bottom line Concepts 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 just contact your bank supervisor and say give 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’ve ended up being yes the Ambassador and paid representative for this I like this program it’s going away very soon you got to discover everything about it let’s talk worker retention credit Josh Fox what is an ERC let’s just begin there so during the Trump Administration when President Trump was enacted they created the cares Act and the cares act used companies 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone it makes a huge distinction right there 2 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 fine go on sorry I simply need to make sure we got that point I mean that’s a big difference a loan versus cash 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 stunning difficult check in the mail where you get actual money from the IRS all right so let’s discuss how it works since it seems like to me if it’s a if it’s staff member retention credit that individual had to be an employee 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 workers right you had to have actually owned a business however it’s based upon you having W-2 staff members in America not 10.99. so as long as you had W-2 employees 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 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 3 and 4 of 2020 and you had quarters one two and 3 of 2021. okay so that’s how it’s measured you need to be on the W-2 throughout that period now let’s talk my preferred part cash just how much can you get back per worker that was on a W-2 in those 6 quarters so the calculation in 2020 to be specific Kevin is 50 of the employee’s income to a maximum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s income to a maximum of 7 thousand per quarter how did that occur um they simply changed the rules in.

2021 versus due to the fact that the turmoil of the pandemic so they wished 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 5 thousand Max and then what happens 21 000 Max in 2021 oh that’s how you create twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per staff member that is since that’s a great deal of cash it is now there’s a caveat here the PPP cash would have to be lowered from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would reduce the 26 000 so what we’re seeing on average Kevin is if you took PPP cash 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 employees and you took PPP money you would still get a million dollar in the mail from the IRS so it’s big undoubtedly now the big concern is why does nobody understand about this due to the fact that appearance when I initially found out about this when I first fulfilled Josh you understand I have actually got great deals of financial investments in lots of business I’m a major advocate for entrepreneurship in America and make many lots of financial investments in entrepreneurs of which lots of suffered through the pandemic when I first became aware of this I called BS I don’t think it because 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 survive throughout the pandemic so when I heard about this I said nah it can’t be true but when I dug around I even called to my political leader pals Guv Senators they didn’t learn about it I suggest that’s how you understand that’s how false information is that there’s no info out there then a lot of people told me well you can’t get it because you took the PPP also not real so let’s ask Josh why does nobody understand about the worker retention credit you understand what’s fascinating you’re talking about the banks Kevin since in the PPP loan process the federal government made it very clear that if you desired a PPP loan you would call Wells Fargo Citibank Bank of America any of the huge 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 simply procedure process that’s all um and here there was mayhem because keep in mind in the initial cares act you could refrain from doing both programs so if you had 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 due to the fact that it’s not alone so you’re getting a tax refund so the government never made it clear to anybody about how to.

do this does your CFO know how to do this not truly she or he’s never done it before 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 accounting professional no your accounting professional’s never ever done this before unless you have an account that went into this service and bottom line my firm Kevin has been in business given that 2009 and we have actually been working with the federal government and the state government to recover money for Fortune 500 Fortune 1000 business so a great deal of our big big corporate clients have dealt with bottom line to recover other federal government programs we’ve done sales tax and utilize tax unemployment tax work chance tax credits research and development tax credits unclaimed property property tax all of these other government programs.

The staff member retention tax credit is a broad based refundable tax credit designed to motivate.
employers to keep staff members on their payroll. The credit is 50% of up to $10,000 in wages paid by an.
Because of COVID-19 or whose gross invoices, employer whose business is totally or partially suspended.
decline by more than 50%.
Schedule.
1. The credit is available to all employers despite size consisting of tax exempt companies. There are.
just two exceptions: (1) state and city governments and their instrumentalities and (2) little.
services who take Small company Loans.
2. To certify, the company needs to satisfy one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s organization is fully or partially suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are listed below 50% of the comparable quarter in 2019. As soon as the.
employer’s gross invoices go above 80% of an equivalent quarter in 2019 they no longer qualify.
after the end of that quarter.

Calculation of the Credit.
The amount of the credit is 50% of the qualifying earnings paid up to $10,000 in total.
It works for salaries paid after March 13th and prior to December 31, 2020.
The definition of qualifying salaries differs by whether a company had, on average, basically than.
100 employees in 2019.

Business that focus on ERC filing assistance typically provide expertise and assistance to assist services browse the complex process of claiming the credit. They can use numerous services, consisting of:.

 

How is the employee retention credit calculated? Employee Retention Credit Nitti

Eligibility Assessment: These companies will examine your service’s eligibility for the ERC based on elements such as your industry, earnings, and operations. They can help identify if you satisfy the requirements for the credit and determine the optimum credit amount you can claim.
Documents and Computation: ERC filing services will assist in collecting the essential documents, such as payroll records and financial declarations, to support your claim. They will likewise help determine the credit amount based upon qualified wages and other qualifying costs.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for prior quarters, these business can evaluate your past payroll records and financials to recognize prospective chances for retroactive credits. They can help you modify prior tax returns to declare these refunds.
Filing Support: Companies specializing in ERC filings will prepare and submit the essential kinds and documents on your behalf. This includes finishing Form 941 or any other required tax return.
Compliance and Updates: ERC regulations and guidance have actually developed with time. These companies stay upgraded with the latest modifications and guarantee that your filings comply with the most existing standards. They can also provide continuous support if the internal revenue service requests additional details or conducts an audit related to your ERC claim.
It’s important to research study and veterinarian any business offering ERC filing support to guarantee their credibility and knowledge. Try to find established companies with experience in tax and payroll services, or consider reaching out to relied on accounting companies or tax specialists who offer ERC submitting support.

Keep in mind that while these business can provide important assistance, it’s always a good concept to have a standard understanding of the ERC requirements and procedure yourself. This will help you make notified decisions and guarantee accurate filings.

The Staff Member 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 services to keep and pay their staff members during the pandemic, even if their operations have actually been impacted.

Here are some key points about the ERC:.

Eligibility: The ERC is offered to qualified employers, including for-profit services, tax-exempt companies, and specific governmental entities. To certify, employers need to fulfill one of two criteria:.
The business operations were totally or partly suspended due to a government order related to COVID-19.
The business experienced a substantial decrease in gross invoices. As pointed out previously, for 2021, a significant decrease is specified as a 20% decline 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 receipts compared to the very same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
Credit Quantity: 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 (up to 70%) of qualified wages paid to employees, consisting of particular health plan 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: Initially, services that got an Income Protection Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 enables businesses to claim the ERC even if they received a PPP loan. Nevertheless, the very same wages can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and improved, permitting eligible companies to claim the credit for qualified earnings paid as far back as March 13, 2020. This retroactive provision offers a chance for businesses to change prior-year income tax return and receive refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their work tax returns, typically Kind 941. The excess can be reimbursed to the company if the credit surpasses the quantity of work taxes owed.
It’s important to keep in mind that the ERC arrangements and eligibility criteria have actually progressed in time. The best strategy is to talk to a tax professional or check out the official IRS website for the most detailed and up-to-date info concerning the ERC, including any current legal changes or updates.

To receive the ERC, a business must meet among the following criteria:.

The business operations were totally or partly suspended due to a federal government order related to COVID-19.
The business experienced a substantial decline in gross receipts. For 2021, a considerable decrease is defined as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a substantial decline is specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross invoices compared to the right away preceding quarter.
The ERC is offered to organizations of all sizes, consisting of tax-exempt companies, however there are some exceptions. Government entities and companies that got a PPP loan might have constraints on declaring the credit.

The process for declaring the ERC involves completing the necessary types and including the credit on your work tax return (normally Type 941). The exact time it takes to process the credit can vary based on several aspects, including the complexity of your service and the work of the internal revenue service. It’s suggested to consult with a tax professional for guidance specific to your scenario.

There are numerous companies that can help with the process of declaring the ERC. Some well-known companies that provide support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.

Please keep in mind that the details supplied here is based upon basic knowledge and might not show the most current updates or modifications to the ERC. It is essential to speak with a tax professional or go to the main IRS website for the most updated and accurate information regarding eligibility, declaring treatments, and offered support.

Less than 100. If the employer had 100 or fewer 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.
staff members worked full time and got paid for full time work, the company still gets the credit.
Greater than 100. If the employer had more than 100 employees usually in 2019, then the credit is.
permitted only for earnings paid to staff members who did not work throughout the calendar quarter.
In both cases, “wages” consists of not simply cash payments but also a part of the cost of company.
provided healthcare. Employee Retention Credit Nitti
Payment.

Companies can be instantly repaid for the credit by reducing the amount of payroll taxes they.