Lets talk first about Employee Retention Credit Questions :
Our team here what do these people doing everyone in this room is assisting teach people about ERC and uh always offer a lovely breakfast and have individuals truly learn more about the program we need to head to the space where we have the ability to display some of the checks that we are getting for companies and I wish to see that what is this this is uh numerous millions of dollars literally Kevin numerous millions of dollars so these are replicate copies of the letters that go to customers verifying that the check is on the method I indicate you understand if you just begin to look at a few of these here I imply 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 how many actual customers 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 confirmed and the check is on the mail in the mail from the internal revenue service heading to the consumer so that’s how you have the ability to track it you know when you
receive this you understand the check is gone for 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 till this letter is confirmed the check is on the way they deposit it into their checking account and they can truly rely on Wonder trust that the procedure has been completed and the number of you think you’ve processed since you started this we’re about 35 000 of these for
about six billion dollars wow so plainly they understand what they’re doing which’s what you need you require experts 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 really essential today the worker retention credit which the majority of you have actually never become aware of I definitely hadn’t heard of it until extremely recently and found out a lot about it since this is probably the most affordable cost of capital for any small company anywhere
anytime if you have workers between five 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 Ideas they’re the largest processor of these ERC credits this is a 170 page program so it’s hard this isn’t like PPP we simply phone 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 inform us all about it and how to get it and why I’ve ended up being yes the Ambassador and paid spokesperson for this I like 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 simply start there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act used organizations 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 distinction right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the money money payroll tax refund all right go on sorry I simply have to make sure we got that point I imply that’s a big distinction a loan versus money money I like money money that’s what we’re speaking about all right 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 stunning tough check in the mail where you get real money from the internal revenue service all right so let’s speak about how it works since it seems like to me if it’s a if it’s worker retention credit that person needed to be a staff member so I’m going to make the Presumption this cash is not for the owner not for people on the cap table not for investors it’s for workers right you had to have owned a service however 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 very first six 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 four of 2020 and you had quarters one two and 3 of 2021. fine so that’s how it’s determined you have to be on the W-2 throughout that duration now let’s talk my preferred part cash how much can you get back per staff member that was on a W-2 in those 6 quarters so the estimation in 2020 to be precise Kevin is 50 of the employee’s income to an optimum of 5 thousand dollars per staff member for the year of 2020 and in 2021 the numbers escalated to 70 of the worker’s salary to a maximum of 7 thousand per quarter how did that happen um they just altered the rules in.
2021 versus since the chaos of the pandemic so they wanted 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 happens 21 000 Max in 2021 oh that’s how you come up with 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 lot of money it is now there’s a caution here the PPP cash would need to be lowered from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would minimize the 26 000 so what we’re seeing on average Kevin is if you took PPP cash someplace around 10 thousand dollars an individual so let’s say hypothetically you owned a restaurant in New york city City where I’m from and you had a hundred workers and you took PPP money you would still get a million dollar in the mail from the IRS so it’s substantial obviously now the big question is why does nobody understand about this due to the fact that appearance when I initially heard about this when I first fulfilled Josh you understand I’ve got great deals of investments in great deals of companies I’m a significant supporter for entrepreneurship in America and make many lots of investments in business owners of which many suffered through the pandemic when I initially 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 really easy to do we had our CEOs call the banks they got their loans which were well deserved and we utilized them carefully to stay alive throughout the pandemic so when I heard about this I stated nah it can’t hold true however when I dug around I even contacted us to my political leader friends Governor Senators they didn’t know about it I imply that’s how you know that’s how false information is that there’s no information out there then a bunch of people informed me well you can’t get it since you took the PPP likewise not real so let’s ask Josh why does nobody learn about the employee retention credit you understand what’s fascinating you’re talking about the banks Kevin since in the PPP loan procedure 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 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 just procedure procedure that’s all um and here there was mayhem due to the fact that remember in the initial 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 refraining from 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 he or she’s never done it in the past 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 business your accounting professional no your accounting professional’s never ever done this prior to unless you have an account that entered into this company and bottom line my firm Kevin has been in business since 2009 and we have actually been working with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 companies so a lot of our big big business clients have actually dealt 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 real estate tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit developed to encourage.
companies to keep employees 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 company is fully or partially suspended.
decrease by more than 50%.
1. The credit is readily available to all companies regardless of size including tax exempt organizations. There are.
just 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
organizations who take Small company Loans.
2. To certify, the company needs to fulfill one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s company is totally or partly 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. Once 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 certifying earnings paid up to $10,000 in overall.
It is effective for earnings paid after March 13th and prior to December 31, 2020.
The meaning of certifying incomes differs by whether a company had, typically, more or less than.
100 workers in 2019.
Business that specialize in ERC filing assistance generally provide expertise and support to help organizations browse the complex process of declaring the credit. They can use different services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Questions
Eligibility Assessment: These business will evaluate your service’s eligibility for the ERC based on factors such as your market, earnings, and operations. If you fulfill the requirements for the credit and identify the maximum credit quantity you can declare, they can help identify.
Documentation and Computation: ERC filing services will assist in gathering the essential paperwork, such as payroll records and financial statements, to support your claim. They will also help calculate the credit quantity based on qualified earnings and other qualifying expenses.
Retroactive Claim Review: If you are qualified to declare the ERC for prior quarters, these companies can review your previous payroll records and financials to recognize possible chances for retroactive credits. They can assist you change previous income tax return to declare these refunds.
Filing Assistance: Companies specializing in ERC filings will prepare and send the essential kinds and paperwork on your behalf. This consists of finishing Type 941 or any other necessary tax return.
Compliance and Updates: ERC regulations and guidance have actually developed over time. These business remain updated with the most recent modifications and make sure that your filings comply with the most present standards. They can also supply ongoing assistance if the internal revenue service requests additional information or carries out an audit related to your ERC claim.
It is essential to research and veterinarian any business providing ERC filing help to ensure their credibility and competence. Try to find established companies with experience in tax and payroll services, or consider connecting to trusted accounting firms or tax experts who use ERC submitting assistance.
Keep in mind that while these business can provide important support, it’s constantly a good idea to have a fundamental understanding of the ERC requirements and procedure yourself. This will assist you make informed choices and make sure precise filings.
The Worker Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief measures. The objective of the ERC is to encourage businesses to retain and pay their workers throughout the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to eligible companies, including for-profit companies, tax-exempt organizations, and specific governmental entities. To certify, employers should fulfill one of two requirements:.
The business operations were completely or partly suspended due to a federal government order related to COVID-19.
Business experienced a significant decline in gross receipts. As discussed earlier, for 2021, a considerable decrease is specified as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decrease in gross invoices compared to the 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 quantity amounts to a percentage (up to 70%) of certified salaries paid to staff members, consisting of certain health insurance 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: At first, companies that received a Paycheck Defense Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 allows companies to claim the ERC even if they got a PPP loan. The very same salaries can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and boosted, allowing eligible companies to claim the credit for qualified salaries paid as far back as March 13, 2020. This retroactive arrangement offers a chance for organizations to modify prior-year tax returns and receive refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their work income tax return, generally Type 941. If the credit goes beyond the amount of employment taxes owed, the excess can be reimbursed to the employer.
It is very important to keep in mind that the ERC arrangements and eligibility criteria have actually progressed in time. The best strategy is to speak with a tax expert or visit the official internal revenue service website for the most detailed and current information concerning the ERC, including any current legislative modifications or updates.
To get approved for the ERC, a company needs to fulfill one of the following requirements:.
Business operations were completely or partially suspended due to a government order related to COVID-19.
Business experienced a considerable decrease in gross receipts. For 2021, a significant decrease is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019, or a 20% decline in gross invoices compared to the instantly preceding quarter.
The ERC is available to services of all sizes, including tax-exempt companies, however there are some exceptions. For instance, federal government entities and companies that got a PPP loan might have restrictions on declaring the credit.
The process for declaring the ERC involves completing the required forms and including the credit on your employment tax return (normally Type 941). The exact time it requires to process the credit can vary based on numerous elements, including the complexity of your company and the work of the IRS. It’s suggested to speak with a tax professional for guidance specific to your situation.
There are a number of business that can help with the procedure of declaring the ERC. Some widely known business that provide help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the info offered here is based on basic knowledge and may not show the most current updates or modifications to the ERC. It’s important to talk to a tax expert or go to the main IRS site for the most updated and accurate details relating to eligibility, claiming treatments, and available assistance.
Less than 100. The credit is based if the company had 100 or fewer employees on average in 2019.
on salaries paid to all staff members whether they in fact worked or not. In other words, even if the.
workers 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.
enabled only for earnings paid to staff members who did not work throughout the calendar quarter.
In both cases, “incomes” consists of not simply cash payments however likewise a part of the cost of employer.
supplied health care. Employee Retention Credit Questions
Companies can be instantly reimbursed for the credit by minimizing the quantity of payroll taxes they.