Lets talk first about Employee Retention Credit Planning :
Our group here what do these people doing everybody in this space is helping teach individuals about ERC and uh always supply a lovely breakfast and have people really learn about the program we should head to the space where we are able to show a few of the checks that we are getting for business and I wish to see that what is this this is uh hundreds of millions of dollars actually Kevin hundreds of countless dollars so these are duplicate copies of the letters that go to clients confirming that the check is on the method I imply you understand if you simply begin to look at a few of these here I mean this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s simply I suggest consider the number of real customers that went through the program yeah this is the very end this is the celebration at the end when the check is confirmed the numbers are verified and the check is on the mail in the mail from the internal revenue service heading to the client so that’s how you have the ability to track it you understand when you
receive this you know the check is chosen sure and that’s when they pay so they don’t pay anything up until they in fact get the money 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 bank account and they can genuinely rely on Wonder trust that the procedure has actually been completed and the number of you believe you have actually processed because you began this we have to do with 35 000 of these for
about six billion dollars wow so plainly they know 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 Fantastic here you’re at my YouTube channel we’re talking about something really essential today the staff member retention credit which the majority of you have actually never ever heard of I certainly had not become aware of it till really recently and learned a lot about it because this is most likely the lowest expense of capital for any small business anywhere
anytime if you have workers between 5 and five hundred so I’ve got the professional 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 challenging this isn’t like PPP we just contact your bank manager and say offer me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to tell us all about it and how to get it and why I’ve become yes the Ambassador and paid spokesperson for this I enjoy this program it’s going away very soon you got to discover all 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 developed the cares Act and the cares act used companies 3 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 difference right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
fix the cash money payroll tax refund okay go on sorry I simply need to ensure we got that point I suggest that’s a huge distinction a loan versus money cash I like cash money 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 difficult check in the mail where you get real money from the IRS all right so let’s talk about how it works because it seems like to me if it’s a if it’s employee retention credit that individual needed to be a staff member 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 employees right you needed to have owned a service however it’s based upon you having W-2 employees 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 eligible 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 proper so there were six quarters the program was open well stroll us through the 6 quarters so you had quarters 2 three and four of 2020 and you had quarters one 2 and three of 2021. fine so that’s how it’s measured you have to be on the W-2 during that period now let’s talk my favorite part money how much can you get back per worker that was on a W-2 in those six quarters so the calculation in 2020 to be specific Kevin is 50 of the employee’s salary to an optimum of 5 thousand dollars per staff member for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the worker’s salary to an optimum of 7 thousand per quarter how did that happen um they simply altered the rules in.
2021 versus because 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 as much as 5 thousand Max and after that what occurs 21 000 Max in 2021 oh that’s how you create twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty 6 thousand dollars per worker that is since that’s a lot of money it is now there’s a caveat here the PPP money would need to be reduced 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 typically Kevin is if you took PPP cash someplace around 10 thousand dollars a person so let’s state hypothetically you owned a restaurant 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 huge obviously now the huge question is why does no one learn about this since look when I initially heard about this when I first met Josh you know I have actually got lots of financial investments in great deals of business I’m a major advocate for entrepreneurship in America and make numerous many investments in entrepreneurs of which lots of suffered through the pandemic when I initially found out about this I called BS I do not believe it since I utilize the PPP we went through the money center Banks to get it it was really easy to do we had our CEOs call the banks they got their loans and that were well deserved and we utilized them carefully to stay alive 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 learn about it I indicate that’s how you know 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 since you took the PPP also not real so let’s ask Josh why does nobody understand about the employee retention credit you understand what’s intriguing you’re talking about the banks Kevin since in the PPP loan procedure 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 process in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply process procedure that’s all um and here there was mayhem due to the fact that keep in mind in the original cares act you could refrain from doing both programs so if you had done PPP you might not do ERC in the original 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 federal government never made it clear to any person about how to.
do this does your CFO know how to do this not really she or he’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 accountant no your accounting professional’s never done this before unless you have an account that went into this company and bottom line my company Kevin has stayed in business considering that 2009 and we have actually been dealing with the federal government and the state government to recuperate money for Fortune 500 Fortune 1000 business so a great deal of our huge big business customers have actually worked with bottom line to recuperate other government programs we have actually done sales tax and utilize tax joblessness tax work chance tax credits research and development tax credits unclaimed property property tax all of these other government programs.
The worker retention tax credit is a broad based refundable tax credit designed to motivate.
companies to keep employees on their payroll. The credit is 50% of up to $10,000 in earnings paid by an.
company whose service is fully or partly suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
1. The credit is readily available to all employers no matter size consisting of tax exempt companies. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
organizations who take Small Business Loans.
2. To qualify, the company has to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s service is totally or partly suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross invoices are listed below 50% of the equivalent quarter in 2019. When the.
company’s gross receipts 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 overall.
It is effective for incomes paid after March 13th and prior to December 31, 2020.
The meaning of qualifying salaries varies by whether an employer had, typically, basically than.
100 workers in 2019.
Business that focus on ERC filing help normally offer competence and assistance to assist organizations navigate the complicated procedure of claiming the credit. They can use various services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Planning
Eligibility Assessment: These business will assess your organization’s eligibility for the ERC based upon factors such as your market, profits, and operations. They can help figure out if you fulfill the requirements for the credit and identify the maximum credit amount you can declare.
Documentation and Computation: ERC filing services will assist in gathering the necessary documents, such as payroll records and financial statements, to support your claim. They will also help determine the credit quantity based upon qualified salaries and other qualifying expenditures.
Retroactive Claim Review: If you are eligible to declare the ERC for previous quarters, these business can examine your past payroll records and financials to recognize prospective chances for retroactive credits. They can help you modify previous tax returns to declare these refunds.
Filing Support: Business specializing in ERC filings will prepare and send the necessary forms and documents in your place. This consists of completing Form 941 or any other necessary tax return.
Compliance and Updates: ERC policies and guidance have progressed with time. These companies remain updated with the latest changes and guarantee that your filings abide by the most existing standards. If the IRS requests additional information or performs an audit associated to your ERC claim, they can also supply continuous assistance.
It is very important to research study and veterinarian any business offering ERC filing support to guarantee their credibility and competence. Search for recognized companies with experience in tax and payroll services, or think about reaching out to trusted accounting companies or tax specialists who provide ERC submitting support.
Bear in mind that while these companies can provide valuable support, it’s always a great idea to have a standard understanding of the ERC requirements and procedure yourself. This will assist you make notified decisions and ensure precise 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 motivate services to retain and pay their workers during the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to qualified companies, consisting of for-profit companies, tax-exempt organizations, and specific governmental entities. To qualify, employers need to fulfill one of two criteria:.
Business operations were completely or partially suspended due to a government order related to COVID-19.
Business experienced a substantial decline in gross invoices. As discussed previously, for 2021, a considerable decline is specified as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant 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 Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit amount is equal to a portion (approximately 70%) of qualified incomes paid to staff members, consisting of specific health plan expenses. 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, businesses that received a Paycheck Security Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 permits businesses to declare the ERC even if they got a PPP loan. The exact same earnings can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and improved, allowing eligible companies to claim the credit for qualified incomes paid as far back as March 13, 2020. This retroactive provision provides a chance for services to modify prior-year income tax return and get refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their employment income tax return, typically Kind 941. If the credit goes beyond the amount of work taxes owed, the excess can be refunded to the employer.
It is necessary to keep in mind that the ERC provisions and eligibility criteria have evolved in time. The very best strategy is to consult with a tax professional or go to the main IRS site for the most detailed and current info regarding the ERC, consisting of any recent legal modifications or updates.
To receive the ERC, a business should meet among the following requirements:.
Business operations were totally or partly suspended due to a federal government order related to COVID-19.
Business experienced a significant decrease in gross invoices. For 2021, a significant decline is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
The ERC is offered to companies of all sizes, including tax-exempt organizations, but there are some exceptions. Government entities and companies that received a PPP loan might have constraints on claiming the credit.
The process for declaring the ERC involves finishing the essential types 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 several elements, consisting of the intricacy of your organization and the work of the IRS. It’s suggested to consult with a tax professional for guidance specific to your situation.
There are several business that can help with the procedure of declaring the ERC. These consist of accounting companies, tax advisory services, and payroll service providers. Some popular companies that use support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research and contact these companies directly to ask about their services and costs.
Please keep in mind that the information offered here is based upon general understanding and might not reflect the most recent updates or modifications to the ERC. It’s important to speak with a tax professional or check out the main IRS site for the most up-to-date and precise information regarding eligibility, declaring procedures, and readily available help.
Less than 100. The credit is based if the employer had 100 or fewer workers on average in 2019.
on salaries paid to all staff members whether they actually worked or not. Simply put, even if the.
workers worked full time and made money for full-time work, the employer still gets the credit.
Greater than 100. The credit is if the employer had more than 100 staff members on average in 2019.
permitted only for incomes paid to workers who did not work throughout the calendar quarter.
In both cases, “earnings” consists of not just money payments but also a portion of the cost of company.
supplied healthcare. Employee Retention Credit Planning
Employers can be immediately compensated for the credit by reducing the quantity of payroll taxes they.