Lets talk first about Employee Retention Credit Requirement :
Our team here what do these men doing everybody in this room is helping teach individuals about ERC and uh constantly provide a stunning breakfast and have people actually learn more about the program we need to head to the room where we have the ability to show some of the checks that we are getting for companies and I wish to see that what is this this is uh hundreds of countless dollars literally Kevin hundreds of millions of dollars so these are duplicate copies of the letters that go to customers confirming that the check is on the method I imply you understand if you simply start to take a 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 indicate it’s just I suggest think of how many actual customers that went through the program yeah this is the very end this is the celebration at the end when the check is validated the numbers are validated and the check is on the mail in the mail from the internal revenue service heading to the client so that’s how you’re able to track it you understand when you
receive this you understand the check is chosen sure which’s when they pay so they don’t pay anything up until they really get the money they do not pay bottom line Wonder trust anything until this letter is confirmed the check is on the method they transfer it into their checking account and they can really trust Wonder trust that the procedure has been completed and how many you believe you have actually processed since you started this we have to do with 35 000 of these for
about 6 billion dollars wow so plainly they understand what they’re doing which’s what you need you need experts 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 Terrific here you’re at my YouTube channel we’re talking about something actually important today the staff member retention credit which most of you have actually never ever heard of I certainly had not heard of it until really just recently and found out a lot about it because this is probably the lowest expense of capital for any small company anywhere
anytime if you have staff members between five and five hundred so I’ve got the expert 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 call your bank manager 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 have actually become yes the Ambassador and paid representative for this I enjoy this program it’s going away soon you got to discover 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 came up with the cares Act and the cares act used services three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everybody it makes a big difference right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the money cash payroll tax refund all right go on sorry I simply have to ensure we got that point I indicate that’s a huge distinction a loan versus cash cash I like cash money that’s what we’re talking 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 initial cares Act is the ERC and yes Kevin it is a lovely difficult check in the mail where you get actual cash from the IRS all right so let’s discuss how it works since it sounds like to me if it’s a if it’s employee retention credit that individual had to be a staff member 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 staff members right you needed to have actually owned a business but it’s based on you having W-2 workers 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 first six months of 2021 on the W-2 right so there were 6 quarters the program was open well walk us through the six quarters so you had quarters 2 three and 4 of 2020 and you had quarters one two and three of 2021. fine so that’s how it’s measured you have to be on the W-2 throughout that period now let’s talk my favorite part cash just how much can you get back per employee that was on a W-2 in those 6 quarters so the calculation in 2020 to be specific Kevin is 50 of the staff member’s wage to an optimum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers increased to 70 of the employee’s wage to a maximum of seven thousand per quarter how did that occur um they just changed 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 employees on payroll 100 so if you can get 5 000 per person Max in twenty that was 50 in 2020 approximately five thousand Max and after that 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 money 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 lower the 26 000 so what we’re seeing on average Kevin is if you took PPP money somewhere 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 money you would still get a million dollar in the mail from the internal revenue service so it’s huge clearly now the big concern is why does nobody learn about this due to the fact that look when I initially heard about this when I initially met Josh you know I have actually got great deals of investments in lots of companies I’m a major supporter for entrepreneurship in America and make lots of numerous investments in entrepreneurs of which lots of suffered through the pandemic when I initially became aware of this I called BS I do not believe it due to the fact that 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 and that were well should have and we utilized them sensibly to survive throughout the pandemic so when I became aware of this I stated nah it can’t hold true however when I dug around I even contacted us to my political leader buddies Guv Senators they didn’t understand about it I suggest that’s how you understand that’s how misinformation is that there’s no info out there then a bunch of people informed me well you can’t get it due to the fact that you took the PPP also not true so let’s ask Josh why does no one understand about the worker 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 huge banks in our nation and they would process procedure 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 turmoil because 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 due to the fact that it’s not alone so you’re getting a tax refund so the federal government never made it clear to anyone about how to.
do this does your CFO know 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 business yeah a few of them are doing it as a payroll company your accountant no your accountant’s never ever done this prior to unless you have an account that went into this company and bottom line my company Kevin has stayed in business given that 2009 and we have actually been dealing with the federal government and the state government to recover money for Fortune 500 Fortune 1000 business so a lot of our big big business clients have dealt with bottom line to recuperate other government programs we’ve 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 federal government programs.
The employee retention tax credit is a broad based refundable tax credit developed to motivate.
companies to keep staff members on their payroll. The credit is 50% of approximately $10,000 in salaries paid by an.
company whose business is fully or partially suspended because of COVID-19 or whose gross invoices.
decrease by more than 50%.
1. The credit is offered to all companies despite size consisting of tax exempt organizations. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) small.
services who take Small company Loans.
2. To qualify, the company needs to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s service is completely or partially suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross receipts are below 50% of the comparable quarter in 2019. As soon as the.
employer’s gross invoices 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 qualifying salaries paid up to $10,000 in overall.
It is effective for salaries paid after March 13th and prior to December 31, 2020.
The definition of qualifying wages differs by whether an employer had, usually, basically than.
100 employees in 2019.
Business that focus on ERC filing help typically supply proficiency and assistance to help companies browse the complicated process of declaring the credit. They can use different services, including:.
How is the employee retention credit calculated? Employee Retention Credit Requirement
Eligibility Assessment: These companies will examine your service’s eligibility for the ERC based on elements such as your industry, earnings, and operations. If you fulfill the requirements for the credit and identify the maximum credit amount you can claim, they can assist determine.
Documentation and Calculation: ERC filing services will help in collecting the essential documentation, such as payroll records and financial declarations, to support your claim. They will also help compute the credit quantity based upon qualified incomes and other qualifying expenses.
Retroactive Claim Evaluation: If you are eligible to claim the ERC for previous quarters, these companies can evaluate your previous payroll records and financials to identify potential opportunities for retroactive credits. They can assist you modify prior tax returns to declare these refunds.
Filing Help: Companies focusing on ERC filings will prepare and send the essential types and documents in your place. This consists of finishing Kind 941 or any other required tax return.
Compliance and Updates: ERC guidelines and assistance have actually evolved gradually. These business remain updated with the most recent changes and make sure that your filings comply with the most current guidelines. They can likewise offer ongoing support if the internal revenue service requests extra details or carries out an audit related to your ERC claim.
It is very important to research study and veterinarian any company using ERC filing support to guarantee their trustworthiness and proficiency. Try to find established companies with experience in tax and payroll services, or think about reaching out to relied on accounting firms or tax experts who offer ERC filing assistance.
Remember that while these business can provide important help, it’s always a great concept to have a basic understanding of the ERC requirements and process yourself. This will assist you make informed choices and guarantee precise filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief steps. The goal of the ERC is to motivate companies to maintain 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 available to eligible companies, including for-profit services, tax-exempt organizations, and particular governmental entities. To certify, companies must fulfill one of two criteria:.
The business operations were completely or partly suspended due to a government order related to COVID-19.
Business experienced a considerable decrease in gross invoices. As mentioned earlier, for 2021, a significant decrease is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decrease 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 is equal to a portion (as much as 70%) of qualified incomes paid to employees, including specific health insurance expenses. The optimum credit per staff member 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. Legislation passed in late 2020 and extended in 2021 allows businesses to claim the ERC even if they received a PPP loan. Nevertheless, the same wages can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and boosted, permitting eligible employers to claim the credit for qualified salaries paid as far back as March 13, 2020. This retroactive provision supplies an opportunity for companies to modify prior-year income tax return and receive refunds.
Declaring the Credit: Employers can declare the ERC by reporting it on their work income tax return, typically Form 941. If the credit exceeds the amount of work taxes owed, the excess can be reimbursed to the employer.
It is necessary to note that the ERC arrangements and eligibility criteria have actually developed with time. The best course of action is to seek advice from a tax professional or go to the official internal revenue service website for the most up-to-date and comprehensive info concerning the ERC, including any recent legislative modifications or updates.
To receive the ERC, a service should satisfy one of the following criteria:.
The business operations were completely or partly suspended due to a federal government order related to COVID-19.
The business experienced a significant decline in gross invoices. For 2021, a considerable decrease is defined as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a considerable decline 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 immediately preceding quarter.
The ERC is readily available to services of all sizes, including tax-exempt organizations, but there are some exceptions. Government entities and services that got a PPP loan might have constraints on declaring the credit.
The process for claiming the ERC involves completing the essential kinds and including the credit on your employment income tax return (usually Type 941). The exact time it takes to process the credit can differ based on several elements, consisting of the complexity of your company and the work of the internal revenue service. It’s recommended to talk to a tax expert for guidance specific to your circumstance.
There are a number of business that can help with the procedure of claiming the ERC. Some popular companies that provide support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the details offered here is based on general understanding and might not show the most recent updates or changes to the ERC. It is essential to speak with a tax professional or check out the official IRS website for the most accurate and up-to-date information regarding eligibility, declaring treatments, and offered support.
Less than 100. The credit is based if the employer had 100 or less workers on average in 2019.
on incomes paid to all employees whether they actually 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.
allowed just for wages paid to staff members who did not work throughout the calendar quarter.
In both cases, “salaries” consists of not just cash payments however also a part of the expense of employer.
supplied health care. Employee Retention Credit Requirement
Companies can be instantly compensated for the credit by minimizing the quantity of payroll taxes they.