Lets talk first about Employee Retention Credits Taxable :
Our group here what do these people doing everybody in this room is helping teach people about ERC and uh always offer a stunning breakfast and have individuals actually learn about the program we must head to the room where we have the ability to display a few 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 actually Kevin numerous countless dollars so these are duplicate copies of the letters that go to customers verifying that the check is on the way 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 imply it’s simply I suggest consider the number of real 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 customer so that’s how you have the ability to track it you understand when you
get this you know the check is opted for sure and that’s when they pay so they don’t pay anything up until they actually get the cash they don’t pay bottom line Wonder trust anything till this letter is confirmed the check is on the way they transfer it into their bank account and they can truly rely on Wonder trust that the process has actually been ended up and the number of you believe you’ve processed given that you began this we’re about 35 000 of these for
about six billion dollars wow so clearly they know what they’re doing which’s what you require you require specialists 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 Wonderful here you’re at my YouTube channel we’re speaking about something actually crucial today the worker retention credit which most of you have actually never become aware of I certainly hadn’t become aware of it up until extremely recently and found out a lot about it since this is probably the lowest expense of capital for any small business 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 Concepts they’re the biggest processor of these ERC credits this is a 170 page program so it’s challenging this isn’t like PPP we just phone your bank manager and state offer me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to inform all of us about it and how to get it and why I’ve become yes the Ambassador and paid spokesperson for this I love this program it’s going away soon you got to learn all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just start there so during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act offered organizations 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everybody it makes a huge distinction right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
remedy the cash money payroll tax refund all right go on sorry I simply have to make certain we got that point I mean that’s a big distinction a loan versus money cash I like cash money that’s what we’re discussing 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 gorgeous difficult check in the mail where you get real cash from the IRS all right so let’s discuss how it works because it seems like to me if it’s a if it’s staff member retention credit that person needed to be a staff member so I’m going to make the Presumption this money is not for the owner not for people on the cap table not for shareholders it’s for employees right you needed to have owned a service however it’s based upon you having W-2 staff members in America not 10.99. As long as you had W-2 workers 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 6 months of 2021 on the W-2 appropriate so there were 6 quarters the program was open well stroll us through the 6 quarters so you had quarters 2 3 and 4 of 2020 and you had quarters one two and 3 of 2021. alright so that’s how it’s determined you need to be on the W-2 throughout that period now let’s talk my preferred part cash just how much can you get back per staff member that was on a W-2 in those 6 quarters so the computation in 2020 to be exact Kevin is 50 of the employee’s wage to a maximum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers increased to 70 of the staff member’s wage to a maximum of seven thousand per quarter how did that happen um they just changed the rules in.
2021 versus due to the fact that the turmoil 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 after that what occurs 21 000 Max in 2021 oh that’s how you come up with twenty 6 thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty 6 thousand dollars per employee that is since that’s a great deal of money it is now there’s a caveat here the PPP money would have to be reduced from the twenty 6 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 money someplace around 10 thousand dollars an individual so let’s state hypothetically you owned a restaurant in New york city City where I’m from and you had a hundred staff members and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s substantial clearly now the huge question is why does nobody understand about this because look when I initially became aware of this when I first satisfied Josh you know I’ve got lots of financial investments in great deals of business I’m a major supporter for entrepreneurship in America and make many lots of investments in entrepreneurs of which numerous suffered through the pandemic when I first became aware of this I called BS I don’t believe it because I utilize 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 used them wisely to survive during the pandemic so when I became aware of this I stated nah it can’t be true however when I dug around I even called to my political leader pals Governor Senators they didn’t understand about it I mean that’s how you know that’s how false information is that there’s no information out there then a bunch of people told me well you can’t get it because you took the PPP also not true so let’s ask Josh why does no one learn about the worker retention credit you know what’s fascinating you’re speaking about the banks Kevin due to the fact that 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 big 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 just process process that’s all um and here there was mayhem since keep in mind in the initial cares act you could refrain from doing both programs so if you had done PPP you might refrain from doing ERC in the initial program and when they altered the law in 2021 the banks were not doing ERC because it’s not alone so you’re getting a tax refund so the federal government never made it clear to any person about how to.
do this does your CFO understand how to do this not actually she or he’s never ever done it previously do the banks do it nope the banks do not do it the payroll companies 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 went into this organization and bottom line my firm Kevin has stayed in business since 2009 and we’ve been working with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 business so a lot of our huge big business customers have worked with bottom line to recuperate other federal government programs we have actually done sales tax and use tax unemployment tax work chance tax credits research and development tax credits unclaimed home real estate tax all of these other government programs.
The worker retention tax credit is a broad based refundable tax credit developed to encourage.
companies to keep staff members on their payroll. The credit is 50% of as much as $10,000 in earnings paid by an.
company whose business is fully or partly suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
1. The credit is offered to all companies despite size including tax exempt companies. There are.
just two exceptions: (1) state and city governments and their instrumentalities and (2) small.
organizations who take Small company Loans.
2. To certify, the employer needs to satisfy one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s business is completely or partially suspended by federal 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. When the.
company’s gross invoices go above 80% of a similar quarter in 2019 they no longer certify.
after completion of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the qualifying wages paid up to $10,000 in overall.
It is effective for wages paid after March 13th and before December 31, 2020.
The definition of qualifying earnings differs by whether an employer had, on average, basically than.
100 employees in 2019.
Business that focus on ERC filing support generally supply proficiency and assistance to help companies navigate the complex procedure of declaring the credit. They can offer different services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credits Taxable
Eligibility Evaluation: These companies will evaluate your company’s eligibility for the ERC based upon aspects such as your market, revenue, and operations. They can assist identify if you satisfy the requirements for the credit and determine the optimum credit amount you can declare.
Documents and Computation: ERC filing services will assist in gathering the required documents, such as payroll records and monetary statements, to support your claim. They will likewise assist calculate the credit quantity based upon eligible incomes and other qualifying costs.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for previous quarters, these companies can review your past payroll records and financials to recognize potential opportunities for retroactive credits. They can help you amend previous income tax return to claim these refunds.
Filing Assistance: Business concentrating on ERC filings will prepare and submit the necessary kinds and documents on your behalf. This includes finishing Type 941 or any other required tax forms.
Compliance and Updates: ERC guidelines and guidance have actually evolved in time. These companies stay updated with the latest changes and make sure that your filings adhere to the most existing guidelines. They can likewise offer ongoing assistance if the IRS demands extra info or performs an audit related to your ERC claim.
It is essential to research and veterinarian any company offering ERC filing support to guarantee their reliability and knowledge. Try to find recognized companies with experience in tax and payroll services, or consider reaching out to trusted accounting companies or tax professionals who provide ERC submitting assistance.
Keep in mind that while these business can offer valuable help, it’s always a good idea to have a basic understanding of the ERC requirements and procedure yourself. This will help you make informed decisions and guarantee precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief steps. The goal of the ERC is to motivate businesses to keep and pay their staff members throughout the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to qualified companies, including for-profit services, tax-exempt companies, and particular governmental entities. To qualify, employers should meet one of two criteria:.
The business operations were completely or partially suspended due to a federal government order related to COVID-19.
The business experienced a substantial decrease in gross receipts. As pointed out previously, for 2021, a significant decrease is defined as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019, or a 20% decline in gross invoices compared to the right away 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 portion (as much as 70%) of qualified earnings paid to employees, including particular health insurance expenditures. The maximum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, organizations that got an Income Protection Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 allows organizations to declare the ERC even if they got a PPP loan. However, the very same wages can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and enhanced, allowing eligible companies to claim the credit for qualified earnings paid as far back as March 13, 2020. This retroactive provision offers a chance for companies to modify prior-year income tax return and get refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their employment tax returns, usually Kind 941. If the credit goes beyond the amount of work taxes owed, the excess can be reimbursed to the employer.
It is essential to keep in mind that the ERC arrangements and eligibility criteria have actually progressed with time. The best strategy is to seek advice from a tax professional or check out the official internal revenue service site for the most updated and comprehensive info regarding the ERC, including any recent legislative modifications or updates.
To receive the ERC, an organization must fulfill among the following requirements:.
The business operations were totally or partially suspended due to a federal government order related to COVID-19.
The business experienced a significant decrease in gross receipts. For 2021, a considerable decline is specified as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decline in gross invoices compared to the right away preceding quarter.
The ERC is available to organizations of all sizes, consisting of tax-exempt companies, however there are some exceptions. Federal government entities and companies that received a PPP loan may have limitations on declaring the credit.
The process for claiming the ERC involves finishing the essential forms and consisting of the credit on your employment income tax return (usually Type 941). The exact time it requires to process the credit can vary based on a number of elements, consisting of the intricacy of your service and the work of the IRS. It’s suggested to talk to a tax expert for assistance specific to your circumstance.
There are a number of companies that can assist with the procedure of claiming the ERC. Some well-known business that provide support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the info supplied here is based on general understanding and might not reflect the most current updates or changes to the ERC. It’s important to speak with a tax expert or visit the main internal revenue service website for the most updated and precise details relating to eligibility, claiming procedures, and offered help.
Less than 100. If the employer had 100 or less workers typically in 2019, then the credit is based.
on salaries paid to all workers whether they in fact worked or not. To put it simply, 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 workers on average in 2019.
permitted only for wages paid to workers who did not work during the calendar quarter.
In both cases, “wages” includes not just cash payments however likewise a part of the expense of employer.
supplied health care. Employee Retention Credits Taxable
Companies can be immediately compensated for the credit by decreasing the quantity of payroll taxes they.