Lets talk first about Federal Employee Retention Credit :
Our team here what do these people doing everyone in this room is assisting teach individuals about ERC and uh always supply a gorgeous breakfast and have individuals truly discover the program we must head to the room where we are able to show some 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 validating that the check is on the method I imply you know if you simply begin to take a look at some 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 just I suggest think about the number of real 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 validated 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 understand when you
receive this you know the check is chosen sure and that’s when they pay so they do not pay anything till they really receive the money they do not pay bottom line Wonder trust anything until this letter is validated the check is on the way they transfer it into their checking account and they can truly rely on Wonder trust that the procedure has been ended up and the number of you believe you’ve processed considering 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 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 speaking about something truly essential today the worker retention credit which the majority of you have never heard of I definitely hadn’t become aware of it till very recently and discovered a lot about it since this is probably the most affordable cost of capital for any small business anywhere
anytime if you have employees in between five and five hundred so I have actually got the specialist with me this is Josh Fox he’s the founder and CEO of bottom line Principles they’re the largest processor of these ERC credits this is a 170 page program so it’s not easy this isn’t like PPP we simply call your bank supervisor and state give me a loan it does not 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 have actually become yes the Ambassador and paid spokesperson for this I like this program it’s disappearing soon you got to learn everything 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 created the cares Act and the cares act provided organizations three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone it makes a big difference right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
remedy the cash cash payroll tax refund all right go on sorry I just need to make sure we got that point I mean that’s a big distinction a loan versus money cash I like cash cash that’s what we’re talking 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 initial cares Act is the ERC and yes Kevin it is a beautiful hard check in the mail where you get actual money from the internal revenue service all right so let’s talk about how it works due to the fact that it sounds like to me if it’s a if it’s staff member retention credit that person needed 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 investors it’s for employees right you had to have owned a company but 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 first 6 months of 2021 on the W-2 correct so there were 6 quarters the program was open well walk us through the six quarters so you had quarters 2 3 and four of 2020 and you had quarters one two and three of 2021. all right so that’s how it’s measured you have to be on the W-2 during that period now let’s talk my preferred part money just how much can you return per staff member that was on a W-2 in those six quarters so the calculation in 2020 to be specific Kevin is 50 of the worker’s income to an optimum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers escalated to 70 of the employee’s salary to an optimum of 7 thousand per quarter how did that occur um they just changed the rules in.
2021 versus since the mayhem of the pandemic so they wished 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 5 thousand Max and then what takes place 21 000 Max in 2021 oh that’s how you come up with twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per worker that is since that’s a great deal of cash it is now there’s a caution 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 lower the 26 000 so what we’re seeing on average Kevin is if you took PPP cash somewhere around ten thousand dollars a person so let’s state hypothetically you owned a restaurant in New York 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 IRS so it’s big undoubtedly now the big question is why does no one understand about this because appearance when I first found out about this when I first satisfied Josh you know I have actually got lots of financial investments in great deals of business I’m a major advocate for entrepreneurship in America and make numerous lots of financial investments in business owners of which lots of suffered through the pandemic when I initially found out about this I called BS I do not think it since 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 which were well should have and we utilized them carefully to survive throughout the pandemic so when I found out about this I said nah it can’t hold true but when I dug around I even contacted us to my politician good friends Governor Senators they didn’t know about it I imply that’s how you understand that’s how misinformation 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 true so let’s ask Josh why does no one know about the employee retention credit you know what’s fascinating you’re speaking about the banks Kevin due to the fact that in the PPP loan process the federal government made it really 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 procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s just process procedure 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 because it’s not alone so you’re getting a tax refund so the government never ever 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 done it before 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 accountant’s never ever done this prior to unless you have an account that entered into this service and bottom line my company Kevin has stayed in business given that 2009 and we’ve been dealing with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 companies so a great deal of our huge big business customers have worked with bottom line to recover other government programs we’ve done sales tax and use tax unemployment tax work opportunity tax credits research and development tax credits unclaimed home real estate tax all of these other federal government programs.
The staff member retention tax credit is a broad based refundable tax credit designed to motivate.
employers to keep staff members on their payroll. The credit is 50% of as much as $10,000 in salaries paid by an.
employer whose company is completely or partly suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is offered to all companies no matter size including tax exempt companies. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
services who take Small Business Loans.
2. To certify, the employer has to satisfy one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s company is fully or partly suspended by government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross invoices are below 50% of the equivalent quarter in 2019. Once the.
employer’s gross invoices go above 80% of a comparable quarter in 2019 they no longer qualify.
after completion of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the qualifying wages paid up to $10,000 in total.
It is effective for incomes paid after March 13th and before December 31, 2020.
The definition of qualifying wages varies by whether a company had, on average, more or less than.
100 staff members in 2019.
Business that specialize in ERC filing support typically supply proficiency and assistance to help organizations browse the complex process of declaring the credit. They can provide various services, including:.
How is the employee retention credit calculated? Federal Employee Retention Credit
Eligibility Evaluation: These companies will evaluate your service’s eligibility for the ERC based on elements such as your industry, earnings, and operations. If you meet the requirements for the credit and recognize the maximum credit quantity you can declare, they can assist figure out.
Documents and Calculation: 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 compute the credit quantity based upon eligible wages and other certifying expenses.
Retroactive Claim Review: If you are eligible to declare the ERC for prior quarters, these companies can evaluate your past payroll records and financials to recognize potential opportunities for retroactive credits. They can help you amend prior income tax return to declare these refunds.
Filing Assistance: Companies concentrating on ERC filings will prepare and submit the required kinds and documentation in your place. This consists of completing Kind 941 or any other necessary tax return.
Compliance and Updates: ERC guidelines and assistance have developed over time. These companies stay updated with the most recent changes and ensure that your filings adhere to the most current guidelines. They can likewise offer ongoing support if the internal revenue service demands additional info or conducts an audit related to your ERC claim.
It’s important to research and vet any company offering ERC filing support to guarantee their trustworthiness and expertise. Try to find recognized firms with experience in tax and payroll services, or consider reaching out to relied on accounting companies or tax professionals who use ERC submitting support.
Keep in mind that while these business can supply valuable support, it’s always an excellent concept to have a fundamental understanding of the ERC requirements and process yourself. This will assist you make notified decisions and guarantee accurate filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief procedures. The goal of the ERC is to encourage companies to maintain and pay their staff members throughout the pandemic, even if their operations have been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is available to eligible companies, consisting of for-profit services, tax-exempt companies, and specific governmental entities. To certify, employers must satisfy one of two requirements:.
Business operations were totally or partly suspended due to a government order related to COVID-19.
The business experienced a substantial decline in gross invoices. As mentioned earlier, 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 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 instantly preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity amounts to a portion (approximately 70%) of certified earnings paid to staff members, including specific 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, businesses that got an Income Defense Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 allows services to declare the ERC even if they got a PPP loan. However, the very same earnings can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively broadened and enhanced, allowing qualified companies to declare the credit for certified earnings paid as far back as March 13, 2020. This retroactive arrangement supplies a chance for services to amend prior-year tax returns and receive refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their work income tax return, normally Form 941. The excess can be reimbursed to the company if the credit surpasses the quantity of work taxes owed.
It is essential to keep in mind that the ERC provisions and eligibility requirements have actually evolved gradually. The best course of action is to seek advice from a tax expert or visit the main IRS website for the most detailed and updated details regarding the ERC, consisting of any recent legal modifications or updates.
To qualify for the ERC, an organization must meet among the following criteria:.
Business operations were fully or partially suspended due to a federal government order related to COVID-19.
The business experienced a significant decline in gross invoices. 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 instantly preceding quarter.
The ERC is offered to businesses of all sizes, consisting of tax-exempt organizations, but there are some exceptions. Federal government entities and services that received a PPP loan may have restrictions on declaring the credit.
The procedure for claiming the ERC involves finishing the essential types and consisting of the credit on your work tax return (typically Form 941). The exact time it requires to process the credit can differ based on several elements, including the intricacy of your organization and the workload of the internal revenue service. It’s suggested to seek advice from a tax professional for assistance particular to your circumstance.
There are numerous business that can help with the process of declaring the ERC. Some popular companies that offer support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the info provided here is based on basic understanding and might not show the most current updates or changes to the ERC. It is essential to consult with a tax professional or check out the main IRS site for the most accurate and up-to-date info regarding eligibility, declaring procedures, and readily available help.
Less than 100. The credit is based if the company had 100 or less employees on average in 2019.
on salaries paid to all staff members whether they really worked or not. Simply put, even if the.
workers worked full time and made money for full-time work, the company still gets the credit.
Greater than 100. If the company had more than 100 employees on average in 2019, then the credit is.
allowed only for earnings paid to workers who did not work throughout the calendar quarter.
In both cases, “earnings” consists of not just cash payments however likewise a portion of the cost of employer.
offered health care. Federal Employee Retention Credit
Employers can be right away repaid for the credit by decreasing the amount of payroll taxes they.