Lets talk first about Employee Retention Credit Rsm :
Our group here what do these guys doing everybody in this space is helping teach people about ERC and uh constantly offer a beautiful breakfast and have people actually learn about the program we need to head to the room where we are able to show a few of the checks that we are getting for companies and I ‘d like to see that what is this this is uh hundreds of millions of dollars literally Kevin hundreds of millions of dollars so these are duplicate copies of the letters that go to clients confirming that the check is on the method I indicate you understand if you simply begin to take a 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 suggest it’s simply I suggest think about 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 verified and the check is on the mail in the mail from the IRS heading to the consumer so that’s how you have the ability to track it you understand when you
receive this you understand the check is opted 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 up until this letter is confirmed the check is on the method they deposit it into their bank account and they can really trust Wonder trust that the process has actually been ended up and how many you think you’ve processed because 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 require you require professionals 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 speaking about something actually essential today the employee retention credit which most of you have never ever become aware of I definitely hadn’t heard of it until very 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 staff members in between five and five hundred so I’ve got the professional with me this is Josh Fox he’s the founder 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 contact your bank supervisor and say offer 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 have actually become yes the Ambassador and paid representative for this I love this program it’s going away soon you got to discover all about it let’s talk worker 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 provided organizations three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone it makes a huge difference right there 2 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 alright go on sorry I just have to ensure we got that point I suggest that’s a huge difference a loan versus cash cash I like cash cash 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 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 individual had to be an employee so I’m going to make the Assumption this cash is not for the owner not for people on the cap table not for shareholders it’s for employees right you needed to have actually owned an organization however it’s based on 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 6 months of 2021 on the W-2 proper so there were six quarters the program was open well stroll us through the six quarters so you had quarters two three and four of 2020 and you had quarters one two and 3 of 2021. okay so that’s how it’s measured you have to be on the W-2 during that duration now let’s talk my favorite part cash just how much can you return per staff member 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 salary to a maximum of five thousand dollars per worker 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 occur um they just changed the rules in.
2021 versus because the mayhem of the pandemic so they wanted 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 up to five thousand Max and then what happens 21 000 Max in 2021 oh that’s how you come up with twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty six thousand dollars per employee that is since that’s a lot of money it is now there’s a caution here the PPP money would have to be reduced from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would lower the 26 000 so what we’re seeing typically Kevin is if you took PPP money somewhere around ten thousand dollars a person so let’s say hypothetically you owned a dining establishment in New York 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 big undoubtedly now the big concern is why does nobody learn about this since look when I initially heard about this when I first met Josh you understand I have actually got great deals of investments in lots of companies I’m a significant supporter for entrepreneurship in America and make numerous numerous financial investments in business owners of which numerous suffered through the pandemic when I first became aware of this I called BS I don’t think it due to the fact that I utilize the PPP we went through the cash center Banks to get it it was extremely easy to do we had our CEOs call the banks they got their loans and that were well should have and we used them sensibly to survive during the pandemic so when I heard about this I said nah it can’t be true but when I dug around I even called to my political leader good friends Governor Senators they didn’t know about it I suggest that’s how you know that’s how false information is that there’s no details out there then a bunch of people told me well you can’t get it since you took the PPP likewise not real so let’s ask Josh why does nobody understand about the staff member retention credit you know what’s intriguing you’re discussing the banks Kevin because in the PPP loan process the federal government made it extremely clear that if you wanted a PPP loan you would call Wells Fargo Citibank Bank of America any of the big banks in our country 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 chaos because remember in the original cares act you could refrain from doing both programs so if you had actually done PPP you might refrain from doing ERC in the initial 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 federal government never made it clear to anybody about how to.
do this does your CFO understand how to do this not truly she or he’s never done it previously do the banks do it nope the banks don’t do it the payroll business yeah some of them are doing it as a payroll business your accounting professional no your accounting professional’s never ever done this before unless you have an account that entered into this service and bottom line my company Kevin has been in business because 2009 and we’ve been working with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 companies so a lot of our huge big corporate clients have dealt with bottom line to recuperate other federal government programs we have actually 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 federal government programs.
The staff member 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 salaries paid by an.
company whose organization is totally or partly suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
1. The credit is available to all employers no matter size including tax exempt organizations. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) little.
businesses who take Small company Loans.
2. To qualify, the employer needs to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s organization is totally or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross receipts are below 50% of the comparable quarter in 2019. As soon as the.
company’s gross invoices exceed 80% of a comparable quarter in 2019 they no longer certify.
after the end of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the certifying earnings paid up to $10,000 in overall.
It works for earnings paid after March 13th and before December 31, 2020.
The meaning of certifying wages differs by whether a company had, on average, basically than.
100 workers in 2019.
Companies that specialize in ERC filing assistance generally supply competence and support to help companies browse the complex process of claiming the credit. They can provide different services, including:.
How is the employee retention credit calculated? Employee Retention Credit Rsm
Eligibility Assessment: These business will evaluate your company’s eligibility for the ERC based on elements such as your industry, profits, and operations. If you fulfill the requirements for the credit and identify the optimum credit amount you can declare, they can assist identify.
Documentation and Calculation: ERC filing services will assist in gathering the required documents, such as payroll records and financial statements, to support your claim. They will also assist determine the credit amount based upon eligible salaries and other qualifying costs.
Retroactive Claim Review: If you are eligible to claim the ERC for prior quarters, these business can examine your previous payroll records and financials to identify possible chances for retroactive credits. They can assist you modify prior tax returns to declare these refunds.
Filing Help: Companies concentrating on ERC filings will prepare and submit the essential kinds and documentation in your place. This includes finishing Type 941 or any other necessary tax forms.
Compliance and Updates: ERC guidelines and assistance have developed with time. These business remain upgraded with the latest modifications and make sure that your filings abide by the most current standards. If the IRS requests additional details or carries out an audit associated to your ERC claim, they can likewise offer continuous support.
It is necessary to research and vet any company offering ERC filing help to ensure their credibility and knowledge. Try to find established firms with experience in tax and payroll services, or think about connecting to trusted accounting companies or tax experts who offer ERC filing support.
Bear in mind that while these companies can supply important assistance, it’s constantly a good concept to have a basic understanding of the ERC requirements and procedure yourself. This will help you make informed decisions and ensure 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 objective of the ERC is to encourage organizations to retain and pay their staff members during the pandemic, even if their operations have actually been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to qualified companies, consisting of for-profit businesses, tax-exempt companies, and particular governmental entities. To certify, employers must meet one of two requirements:.
The business operations were totally or partially suspended due to a federal government order related to COVID-19.
The business experienced a considerable decline in gross receipts. As discussed previously, for 2021, a substantial decrease is specified as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount is equal to a percentage (up to 70%) of certified salaries paid to employees, including particular health insurance costs. 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 an Income Protection Program (PPP) loan were not qualified for the ERC. However, 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 salaries can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively expanded and boosted, permitting eligible employers to claim the credit for qualified incomes paid as far back as March 13, 2020. This retroactive provision supplies an opportunity for companies to modify prior-year tax returns and get refunds.
Claiming the Credit: Companies can declare the ERC by reporting it on their employment income tax return, typically Form 941. The excess can be refunded to the company if the credit surpasses the quantity of work taxes owed.
It is very important to note that the ERC provisions and eligibility criteria have evolved over time. The best course of action is to speak with a tax professional or check out the main internal revenue service site for the most detailed and updated info regarding the ERC, including any recent legal modifications or updates.
To qualify for the ERC, a business must meet among the following criteria:.
Business operations were completely or partly suspended due to a federal government order related to COVID-19.
The business experienced a significant decrease in gross invoices. For 2021, a substantial decrease is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decrease is specified as a 20% decline in gross receipts compared to the exact same quarter in 2019, or a 20% decline in gross receipts compared to the right away preceding quarter.
The ERC is available to services of all sizes, consisting of tax-exempt companies, but there are some exceptions. For example, federal government entities and businesses that got a PPP loan might have restrictions on claiming the credit.
The procedure for declaring the ERC involves finishing the required kinds and consisting of the credit on your work income tax return (usually Type 941). The exact time it takes to process the credit can vary based on a number of aspects, including the complexity of your business and the workload of the internal revenue service. It’s advised to speak with a tax expert for guidance particular to your situation.
There are a number of companies that can help with the procedure of declaring the ERC. Some widely known companies that use assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the information offered here is based upon general understanding and may not show the most recent updates or changes to the ERC. It is necessary to consult with a tax expert or go to the official internal revenue service website for the most updated and accurate details regarding eligibility, declaring treatments, and offered support.
Less than 100. The credit is based if the company had 100 or fewer employees on average in 2019.
on incomes paid to all workers whether they really worked or not. In other words, even if the.
staff members worked full time and earned money for full-time work, the company still gets the credit.
Greater than 100. The credit is if the employer had more than 100 workers on average in 2019.
enabled just for salaries paid to staff members who did not work throughout the calendar quarter.
In both cases, “earnings” consists of not just money payments but also a portion of the expense of company.
offered healthcare. Employee Retention Credit Rsm
Employers can be instantly reimbursed for the credit by decreasing the quantity of payroll taxes they.