Lets talk first about Employee Retention Credit Qualification Criteria :
Our team here what do these people doing everyone in this space is helping teach individuals about ERC and uh constantly provide a gorgeous breakfast and have individuals actually discover the program we must head to the room where we are able to display some of the checks that we are getting for companies and I want to see that what is this this is uh numerous millions of dollars literally Kevin numerous countless dollars so these are replicate copies of the letters that go to clients validating that the check is on the way I suggest you understand if you simply start to look at a few of these here I indicate this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s just I suggest consider 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 confirmed the numbers are confirmed and the check is on the mail in the mail from the IRS heading to the customer so that’s how you have the ability to track it you understand when you
receive this you understand the check is gone for sure and that’s when they pay so they don’t pay anything until they really get the cash they do not pay bottom line Wonder trust anything till this letter is validated the check is on the way they deposit it into their bank account and they can really trust Wonder trust that the procedure has been ended up and the number of you believe 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 know what they’re doing and that’s what you require 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 talking about something truly crucial today the employee retention credit which the majority of you have actually never become aware of I certainly had not heard of it till extremely just recently and discovered a lot about it since this is probably the most affordable expense of capital for any small business anywhere
anytime if you have workers 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 Concepts they’re the biggest processor of these ERC credits this is a 170 page program so it’s hard this isn’t like PPP we just call your bank supervisor and state give me a loan it doesn’t 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 become yes the Ambassador and paid representative for this I like this program it’s going away soon you got to find out all about it let’s talk employee retention credit Josh Fox what is an ERC let’s just begin there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act offered companies 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everyone it makes a big distinction right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
remedy the money cash payroll tax refund alright go on sorry I simply have to ensure we got that point I imply that’s a big distinction a loan versus money money I like cash money 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 original cares Act is the ERC and yes Kevin it is a lovely tough check in the mail where you get real money from the IRS all right so let’s discuss how it works because it sounds 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 Assumption this cash is not for the owner not for individuals on the cap table not for investors it’s for employees right you needed to have actually owned an organization however it’s based upon you having W-2 staff members 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 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 six months of 2021 on the W-2 right so there were six quarters the program was open well stroll us through the six quarters so you had quarters 2 3 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 cash how much can you return per worker that was on a W-2 in those six quarters so the computation in 2020 to be exact Kevin is 50 of the staff member’s wage to a maximum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers escalated to 70 of the employee’s wage to a maximum of seven thousand per quarter how did that take place um they just altered the rules in.
2021 versus due to the fact that the chaos 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 approximately 5 thousand Max and after that what occurs 21 000 Max in 2021 oh that’s how you create twenty 6 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 since that’s a lot of money it is now there’s a caution here the PPP money would need to be minimized 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 money somewhere around ten thousand dollars an individual so let’s state hypothetically you owned a dining establishment 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 substantial clearly now the huge concern is why does no one understand about this since appearance when I initially became aware of this when I initially satisfied Josh you understand I’ve got lots of investments in great deals of companies I’m a major advocate for entrepreneurship in America and make many numerous financial investments in entrepreneurs of which numerous 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 and that were well been worthy of and we used them carefully to stay alive throughout the pandemic so when I heard about this I stated nah it can’t be true however when I dug around I even called to my political leader pals Guv Senators they didn’t know 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 people told me well you can’t get it because you took the PPP likewise not true so let’s ask Josh why does nobody know about the worker retention credit you know what’s intriguing you’re speaking about the banks Kevin since in the PPP loan procedure 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 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 just procedure process that’s all um and here there was turmoil since remember in the original cares act you might refrain from doing both programs so if you had actually done PPP you might refrain from doing ERC in the original 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 understand how to do this not truly he or she’s never ever done it before do the banks do it nope the banks don’t do it the payroll companies yeah some of them are doing it as a payroll business your accountant no your accounting professional’s never ever done this prior to unless you have an account that entered into this business and bottom line my firm Kevin has actually been in business considering that 2009 and we’ve been working with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 companies so a lot of our huge big business clients have worked with bottom line to recover other government programs we’ve 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 government programs.
The worker 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 as much as $10,000 in wages paid by an.
Due to the fact that of COVID-19 or whose gross invoices, employer whose service is totally or partly suspended.
decrease by more than 50%.
Availability.
1. The credit is available to all employers despite size consisting of tax exempt organizations. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
businesses who take Small Business Loans.
2. To certify, the company needs to satisfy one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s service is fully or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the similar quarter in 2019. As soon as the.
company’s gross receipts exceed 80% of a comparable quarter in 2019 they no longer qualify.
after the end of that quarter.
Computation of the Credit.
The quantity of the credit is 50% of the qualifying incomes paid up to $10,000 in overall.
It works for salaries paid after March 13th and prior to December 31, 2020.
The meaning of qualifying incomes differs by whether an employer had, on average, more or less than.
100 staff members in 2019.
Business that concentrate on ERC filing assistance usually supply know-how and support to assist companies navigate the intricate procedure of claiming the credit. They can offer numerous services, including:.
How is the employee retention credit calculated? Employee Retention Credit Qualification Criteria
Eligibility Evaluation: These companies will evaluate your service’s eligibility for the ERC based upon factors such as your market, revenue, and operations. If you satisfy the requirements for the credit and identify the optimum credit amount you can claim, they can help identify.
Documentation and Calculation: ERC filing services will assist in gathering the required documentation, such as payroll records and financial statements, to support your claim. They will likewise help calculate the credit amount based upon eligible wages and other qualifying expenses.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for previous quarters, these companies can evaluate your past payroll records and financials to recognize possible opportunities for retroactive credits. They can assist you change previous tax returns to declare these refunds.
Filing Assistance: Companies focusing on ERC filings will prepare and submit the needed types and documentation on your behalf. This consists of finishing Type 941 or any other required tax forms.
Compliance and Updates: ERC regulations and assistance have actually evolved over time. These companies remain upgraded with the most recent modifications and ensure that your filings adhere to the most current standards. They can also provide continuous assistance if the IRS demands additional details or performs an audit related to your ERC claim.
It’s important to research study and vet any business using ERC filing support to guarantee their trustworthiness and knowledge. Search for established firms with experience in tax and payroll services, or consider connecting to relied on accounting companies or tax professionals who use ERC filing assistance.
Bear in mind that while these business can provide valuable support, it’s constantly an excellent concept to have a basic understanding of the ERC requirements and process yourself. This will help you make notified decisions and guarantee precise filings.
The Worker Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief steps. The objective of the ERC is to encourage organizations to retain and pay their staff members throughout the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to qualified employers, consisting of for-profit services, tax-exempt organizations, and certain governmental entities. To certify, employers must fulfill one of two criteria:.
The business operations were fully or partially suspended due to a federal government order related to COVID-19.
The business experienced a substantial decline in gross invoices. As discussed previously, for 2021, a substantial decrease is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a substantial decrease is specified 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 immediately preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit quantity amounts to a percentage (approximately 70%) of certified salaries paid to workers, including specific health plan expenses. The maximum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, organizations that got a Paycheck Defense Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 allows organizations to claim the ERC even if they received a PPP loan. Nevertheless, the exact same incomes can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and boosted, enabling eligible companies to declare the credit for certified wages paid as far back as March 13, 2020. This retroactive arrangement supplies an opportunity for companies to modify prior-year income tax return and get refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their employment tax returns, normally Kind 941. If the credit goes beyond the quantity of employment taxes owed, the excess can be reimbursed to the company.
It is necessary to keep in mind that the ERC arrangements and eligibility criteria have actually progressed gradually. The very best course of action is to seek advice from a tax professional or check out the official internal revenue service website for the most comprehensive and up-to-date info relating to the ERC, consisting of any current legislative changes or updates.
To qualify for the ERC, a business needs to satisfy one of the following criteria:.
Business operations were totally or partly suspended due to a government order related to COVID-19.
The business experienced a considerable decline in gross receipts. For 2021, a significant decline is specified as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decline in gross receipts compared to the exact same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
The ERC is offered to organizations of all sizes, consisting of tax-exempt organizations, but there are some exceptions. For example, government entities and companies that got a PPP loan might have limitations on declaring the credit.
The process for claiming the ERC involves completing the needed types and including the credit on your work income tax return (generally Kind 941). The exact time it requires to process the credit can differ based on several elements, consisting of the intricacy of your business and the workload of the IRS. It’s suggested to talk to a tax professional for guidance particular to your situation.
There are numerous companies that can help with the process of claiming the ERC. These include accounting companies, tax advisory services, and payroll company. Some well-known companies that offer support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research study and call these companies directly to inquire about their costs and services.
Please note that the information supplied here is based on basic understanding and may not reflect the most recent updates or modifications to the ERC. It is essential to talk to a tax professional or go to the main internal revenue service website for the most up-to-date and accurate information relating to eligibility, declaring procedures, and offered help.
Less than 100. If the employer had 100 or less employees typically in 2019, then the credit is based.
on incomes paid to all staff members whether they really worked or not. Simply put, even if the.
staff members worked full-time and made money for full time work, the company still gets the credit.
Greater than 100. The credit is if the company had more than 100 staff members on average in 2019.
enabled just for salaries paid to staff members who did not work throughout the calendar quarter.
In both cases, “wages” includes not just cash payments however also a portion of the expense of company.
supplied healthcare. Employee Retention Credit Qualification Criteria
Payment.
Companies can be instantly reimbursed for the credit by decreasing the amount of payroll taxes they.