Lets talk first about Employee Retention Credit Qualified Wages Definition :
Our team here what do these guys doing everyone in this room is assisting teach people about ERC and uh always provide a beautiful breakfast and have people truly discover the program we need to head to the room where we are able to display a few 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 literally Kevin hundreds of millions of dollars so these are duplicate copies of the letters that go to customers verifying that the check is on the method I indicate you know if you just begin to look at some of these here I mean this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I imply it’s simply I mean think of how many 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 IRS heading to the customer so that’s how you’re able to track it you know when you
receive this you understand the check is gone for sure which’s when they pay so they don’t pay anything up until they really receive the cash they do not pay bottom line Wonder trust anything until this letter is confirmed the check is on the way they transfer it into their savings account and they can truly rely on Wonder trust that the procedure has actually been completed and the number of you believe you have actually processed because you started this we’re about 35 000 of these for
about 6 billion dollars wow so plainly they understand 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 Wonderful here you’re at my YouTube channel we’re talking about something truly crucial today the staff member retention credit which the majority of you have actually never ever heard of I definitely had not heard of it till very recently and found out a lot about it because this is probably the most affordable expense of capital for any small business anywhere
anytime if you have employees between five and five hundred so I’ve got the specialist 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 difficult this isn’t like PPP we just 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 inform us all about it and how to get it and why I have actually become yes the Ambassador and paid representative for this I love this program it’s disappearing very soon you got to learn all about it let’s talk employee retention credit Josh Fox what is an ERC let’s just start there so throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act offered organizations 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 huge difference right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the money money payroll tax refund alright go on sorry I simply need to ensure we got that point I imply that’s a huge distinction a loan versus cash money I like money cash that’s what we’re speaking 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 lovely hard check in the mail where you get actual money from the IRS all right so let’s speak about 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 a worker so I’m going to make the Assumption this money is not for the owner not for people on the cap table not for shareholders it’s for workers right you needed to have owned a service but it’s based upon you having W-2 staff members in America not 10.99. As long as you had W-2 staff members and you paid federal payroll taxes that’s why you would be eligible so you have to be on payroll in 2020 on the W-2 and you have to be on payroll for the very first six months of 2021 on the W-2 proper so there were 6 quarters the program was open well stroll us through the 6 quarters so you had quarters two three and 4 of 2020 and you had quarters one 2 and 3 of 2021. alright so that’s how it’s determined you have to be on the W-2 during that duration now let’s talk my preferred part money how much can you return per employee that was on a W-2 in those 6 quarters so the computation in 2020 to be specific Kevin is 50 of the employee’s salary to a maximum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers escalated to 70 of the worker’s wage to a maximum of 7 thousand per quarter how did that occur um they simply altered the rules in.
2021 versus since 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 as much as five thousand Max and then what happens 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 because that’s a great deal of money it is now there’s a caveat here the PPP cash would need to be minimized from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would decrease the 26 000 so what we’re seeing typically Kevin is if you took PPP money somewhere around 10 thousand dollars a person so let’s say hypothetically you owned a restaurant in New York City where I’m from and you had a hundred staff members and you took PPP money 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 nobody learn about this because appearance when I initially found out about this when I initially fulfilled Josh you know I’ve got great deals of investments in lots of companies I’m a major advocate for entrepreneurship in America and make lots of lots of investments in entrepreneurs of which lots of suffered through the pandemic when I first heard about this I called BS I don’t believe 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 and that were well should have and we utilized them carefully to survive throughout the pandemic so when I became aware of this I said nah it can’t hold true but when I dug around I even called to my politician buddies Governor Senators they didn’t learn about it I suggest that’s how you understand that’s how false information is that there’s no details out there then a bunch of individuals told me well you can’t get it due to the fact that 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 interesting you’re talking about the banks Kevin because in the PPP loan process 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 huge banks in our country and they would process procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply process process that’s all um and here there was turmoil because 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 original program and when they altered the law in 2021 the banks were refraining from doing ERC since 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 actually he or she’s never ever 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 accountant’s never ever done this prior to unless you have an account that entered into this company and bottom line my company Kevin has actually stayed in business because 2009 and we have actually been working with the federal government and the state government to recuperate money for Fortune 500 Fortune 1000 companies so a great deal of our big big corporate customers have dealt with bottom line to recover other government programs we have actually done sales tax and use tax unemployment tax work opportunity tax credits research and development tax credits unclaimed property real estate 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 staff members on their payroll. The credit is 50% of approximately $10,000 in earnings paid by an.
Because of COVID-19 or whose gross invoices, employer whose service is completely or partially suspended.
decline 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) little.
companies who take Small company Loans.
2. To qualify, the company needs to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s business is completely or partly suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross invoices are listed below 50% of the comparable quarter in 2019. When the.
employer’s gross receipts go above 80% of a comparable quarter in 2019 they no longer qualify.
after the end of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the certifying earnings paid up to $10,000 in total.
It works for earnings paid after March 13th and before December 31, 2020.
The meaning of certifying salaries differs by whether a company had, typically, basically than.
100 workers in 2019.
Companies that concentrate on ERC filing support typically supply proficiency and assistance to help companies navigate the complex process of claiming the credit. They can provide various services, including:.
How is the employee retention credit calculated? Employee Retention Credit Qualified Wages Definition
Eligibility Evaluation: These business will assess your organization’s eligibility for the ERC based on factors such as your market, income, and operations. They can assist determine if you fulfill the requirements for the credit and determine the optimum credit amount you can declare.
Documentation and Computation: ERC filing services will help in gathering the needed paperwork, such as payroll records and monetary declarations, to support your claim. They will also help determine the credit amount based on qualified incomes and other qualifying expenditures.
Retroactive Claim Evaluation: If you are eligible to claim the ERC for prior quarters, these companies can examine your past payroll records and financials to identify possible chances for retroactive credits. They can assist you change previous income tax return to declare these refunds.
Filing Support: Companies specializing in ERC filings will prepare and send the essential forms and documents in your place. This includes completing Form 941 or any other required tax forms.
Compliance and Updates: ERC guidelines and guidance have actually evolved gradually. These companies stay upgraded with the current changes and guarantee that your filings comply with the most current standards. If the IRS requests extra info or carries out an audit associated to your ERC claim, they can also supply ongoing support.
It is necessary to research study and veterinarian any company providing ERC filing help to ensure their reliability and proficiency. Try to find established companies with experience in tax and payroll services, or consider connecting to trusted accounting companies or tax specialists who offer ERC submitting support.
Remember that while these companies can supply valuable support, it’s always a great concept to have a standard understanding of the ERC requirements and process yourself. This will help you make notified choices and guarantee accurate filings.
The Employee 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 services to keep and pay their workers throughout 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 eligible companies, including for-profit businesses, tax-exempt organizations, and particular governmental entities. To qualify, companies must satisfy one of two requirements:.
Business operations were fully or partially suspended due to a government order related to COVID-19.
The business experienced a substantial decrease in gross receipts. As discussed previously, for 2021, a considerable decrease is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a substantial decline 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 employer’s share of Social Security taxes. The credit amount amounts to a portion (as much as 70%) of qualified incomes paid to employees, including certain health insurance expenditures. The optimum 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 received a Paycheck Protection Program (PPP) loan were not eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 permits services to claim the ERC even if they received a PPP loan. However, the exact same salaries can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and improved, permitting qualified employers to declare the credit for qualified wages paid as far back as March 13, 2020. This retroactive provision offers an opportunity for organizations to amend prior-year tax returns and get refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their employment tax returns, generally Form 941. The excess can be refunded to the employer if the credit goes beyond the quantity of work taxes owed.
It is necessary to note that the ERC arrangements and eligibility requirements have developed in time. The very best course of action is to seek advice from a tax expert or visit the main internal revenue service website for the most current and in-depth information concerning the ERC, including any current legal changes or updates.
To get approved for the ERC, a service must satisfy one of the following requirements:.
The business operations were fully or partially suspended due to a federal government order related to COVID-19.
Business experienced a considerable decrease in gross invoices. 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 substantial decrease is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decline in gross invoices compared to the right away preceding quarter.
The ERC is offered to companies of all sizes, consisting of tax-exempt companies, however there are some exceptions. Government entities and businesses that received a PPP loan might have restrictions on declaring the credit.
The process for declaring the ERC involves completing the necessary kinds and consisting of the credit on your work tax return (generally Type 941). The exact time it requires to process the credit can differ based upon numerous factors, consisting of the intricacy of your service and the work of the IRS. It’s recommended to seek advice from a tax expert for guidance particular to your situation.
There are numerous companies that can assist with the process of declaring the ERC. Some popular business that provide help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the info supplied here is based on basic knowledge and may not show the most current updates or changes to the ERC. It is very important to seek advice from a tax expert or visit the official IRS site for the most current and accurate info regarding eligibility, declaring procedures, and readily available help.
Less than 100. If the company had 100 or less employees usually in 2019, then the credit is based.
on salaries paid to all staff members whether they in fact worked or not. In other words, even if the.
employees 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 just for salaries paid to workers who did not work during the calendar quarter.
In both cases, “wages” consists of not simply cash payments however likewise a part of the cost of employer.
provided health care. Employee Retention Credit Qualified Wages Definition
Employers can be instantly compensated for the credit by decreasing the amount of payroll taxes they.