Lets talk first about Fourth Quarter Employee Retention Credit :
Our team here what do these people doing everyone in this space is helping teach individuals about ERC and uh always offer a gorgeous breakfast and have individuals really learn more about the program we must head to the space where we are able to display 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 numerous millions of dollars so these are duplicate copies of the letters that go to customers confirming that the check is on the way I suggest you know if you just start to take a look at a few of these here I suggest this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I imply it’s just I mean think about how many 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 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 have the ability to track it you know when you
get this you know the check is gone for sure which’s when they pay so they do not pay anything until they actually receive the cash they do not pay bottom line Wonder trust anything up until this letter is verified 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 actually been ended up and the number of you think you’ve processed since you began this we have to do with 35 000 of these for
about six billion dollars wow so clearly they understand what they’re doing and that’s what you need you need 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 talking about something really important today the staff member retention credit which the majority of you have never heard of I certainly hadn’t heard of it up until very just recently and found out a lot about it due to the fact that this is most likely 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 professional with me this is Josh Fox he’s the creator and CEO of bottom line Principles they’re the biggest processor of these ERC credits this is a 170 page program so it’s not easy this isn’t like PPP we simply phone your bank supervisor and say give me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to tell 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 love this program it’s going away very soon you got to find out all about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply begin there so during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act used businesses three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody it makes a big 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 money payroll tax refund fine go on sorry I simply have to make certain we got that point I indicate that’s a big difference a loan versus cash money I like money 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 original cares Act is the ERC and yes Kevin it is a lovely hard check in the mail where you get actual money from the IRS all right so let’s speak about how it works since it sounds like to me if it’s a if it’s staff member retention credit that person had to be an employee so I’m going to make the Assumption this money is not for the owner not for individuals on the cap table not for shareholders it’s for workers right you had to have owned an organization however it’s based upon 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 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 6 months of 2021 on the W-2 proper so there were six quarters the program was open well stroll us through the 6 quarters so you had quarters two three and four of 2020 and you had quarters one 2 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 money 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 exact Kevin is 50 of the staff member’s salary to a maximum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers escalated to 70 of the employee’s wage to a maximum of seven thousand per quarter how did that take place um they simply changed the rules in.
2021 versus since the chaos 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 after that what takes place 21 000 Max in 2021 oh that’s how you develop twenty six 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 caution 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 decrease the 26 000 so what we’re seeing on average Kevin is if you took PPP money somewhere around ten thousand dollars an individual 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 cash you would still get a million dollar in the mail from the internal revenue service so it’s huge obviously now the huge concern is why does no one learn about this since look when I first became aware of this when I initially met Josh you understand I have actually got lots of financial investments in lots of companies I’m a major supporter for entrepreneurship in America and make numerous 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 due to the fact that 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 utilized them sensibly to stay alive during 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 pals Guv Senators they didn’t know about it I indicate that’s how you know that’s how misinformation is that there’s no information out there then a lot of individuals told me well you can’t get it due to the fact that you took the PPP also not real so let’s ask Josh why does nobody understand about the employee retention credit you understand what’s interesting you’re speaking about the banks Kevin since in the PPP loan process the federal government made it extremely clear that if you desired 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 just procedure process that’s all um and here there was mayhem due to the fact that keep in mind 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 original program and when they altered the law in 2021 the banks were not doing ERC since 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 know how to do this not actually she or he’s never done it in the past do the banks do it nope the banks do not do it the payroll companies yeah a few of them are doing it as a payroll business your accounting professional no your accounting professional’s never done this before unless you have an account that went into this company and bottom line my firm Kevin has actually been in business because 2009 and we have actually been dealing with the federal government and the state federal government to recuperate money for Fortune 500 Fortune 1000 business so a lot of our big huge corporate clients have actually dealt with bottom line to recuperate other federal government programs we have actually done sales tax and use tax joblessness tax work chance tax credits research and development tax credits unclaimed property property tax all of these other federal government programs.
The worker retention tax credit is a broad based refundable tax credit developed to motivate.
companies to keep employees on their payroll. The credit is 50% of as much as $10,000 in earnings paid by an.
company whose organization is completely or partially suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
1. The credit is offered to all employers despite size including tax exempt companies. There are.
just 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
businesses who take Small company Loans.
2. To certify, the company has to satisfy one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s organization is fully or partially suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross invoices are listed below 50% of the equivalent quarter in 2019. As soon as the.
employer’s gross receipts go above 80% of an equivalent quarter in 2019 they no longer certify.
after the end of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the certifying salaries paid up to $10,000 in overall.
It works for incomes paid after March 13th and before December 31, 2020.
The definition of certifying wages differs by whether an employer had, on average, basically than.
100 workers in 2019.
Companies that concentrate on ERC filing help normally supply proficiency and assistance to assist services navigate the intricate procedure of declaring the credit. They can offer different services, consisting of:.
How is the employee retention credit calculated? Fourth Quarter Employee Retention Credit
Eligibility Assessment: These companies will assess your organization’s eligibility for the ERC based upon aspects such as your industry, income, and operations. If you fulfill the requirements for the credit and recognize the maximum credit amount you can claim, they can assist figure out.
Documents and Computation: ERC filing services will assist in gathering the required documentation, such as payroll records and financial declarations, to support your claim. They will likewise help compute the credit quantity based upon eligible incomes and other qualifying expenditures.
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 identify potential opportunities for retroactive credits. They can assist you change prior income tax return to declare these refunds.
Filing Support: Business specializing in ERC filings will prepare and send the essential forms and paperwork on your behalf. This consists of finishing Form 941 or any other necessary tax forms.
Compliance and Updates: ERC policies and assistance have actually evolved with time. These business remain upgraded with the current modifications and make sure that your filings abide by the most existing guidelines. They can likewise offer ongoing support if the IRS requests additional details or performs an audit related to your ERC claim.
It is essential to research and veterinarian any business providing ERC filing help to guarantee their trustworthiness and expertise. Look for established firms with experience in tax and payroll services, or think about reaching out to relied on accounting firms or tax specialists who use ERC filing support.
Bear in mind that while these companies can supply valuable assistance, it’s always an excellent idea to have a standard understanding of the ERC requirements and procedure yourself. This will assist you make notified decisions and ensure precise filings.
The Worker Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief procedures. The goal of the ERC is to motivate organizations to maintain and pay their employees throughout the pandemic, even if their operations have actually been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to qualified companies, consisting of for-profit companies, tax-exempt companies, and specific governmental entities. To certify, companies must satisfy one of two requirements:.
The business operations were totally or partly suspended due to a government order related to COVID-19.
The business experienced a considerable decrease in gross receipts. As discussed earlier, for 2021, a substantial decrease is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decline is defined as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decrease in gross receipts 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 amounts to a percentage (as much as 70%) of qualified salaries paid to staff members, consisting of particular health insurance expenses. The maximum credit per staff member is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, businesses that got an Income Defense Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 permits businesses to declare the ERC even if they received a PPP loan. The exact same salaries can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and enhanced, permitting qualified companies to claim the credit for qualified incomes paid as far back as March 13, 2020. This retroactive arrangement provides an opportunity for companies to modify prior-year income tax return and get refunds.
Claiming the Credit: Companies can declare the ERC by reporting it on their employment income tax return, normally Kind 941. The excess can be reimbursed to the company if the credit exceeds the amount of employment taxes owed.
It’s important to keep in mind that the ERC provisions and eligibility criteria have actually developed over time. The very best strategy is to seek advice from a tax expert or go to the official internal revenue service site for the most up-to-date and detailed info regarding the ERC, consisting of any current legal modifications or updates.
To qualify for the ERC, an organization needs to meet among the following criteria:.
The business operations were completely or partly suspended due to a federal government order related to COVID-19.
Business experienced a substantial decline in gross receipts. For 2021, a significant decline is specified as a 20% decline 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 exact same quarter in 2019, or a 20% decline in gross receipts compared to the right away preceding quarter.
The ERC is readily available to companies of all sizes, including tax-exempt companies, but there are some exceptions. Government entities and companies that got a PPP loan may have limitations on declaring the credit.
The procedure for claiming the ERC involves completing the essential types and including the credit on your employment tax return (usually Form 941). The exact time it requires to process the credit can differ based on a number of aspects, consisting of the complexity of your company and the work of the IRS. It’s recommended to seek advice from a tax expert for guidance particular to your scenario.
There are numerous companies that can aid with the procedure of claiming the ERC. These include accounting companies, tax advisory services, and payroll company. Some widely known business that offer support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research study and contact these business straight to inquire about their charges and services.
Please note that the information offered here is based upon general knowledge and might not reflect the most recent updates or changes to the ERC. It is very important to speak with a tax professional or visit the official IRS site for the most current and precise information relating to eligibility, claiming treatments, and available help.
Less than 100. The credit is based if the employer had 100 or fewer employees on average in 2019.
on incomes paid to all staff members whether they in fact worked or not. Simply put, even if the.
workers worked full time and earned money for full-time work, the company still gets the credit.
Greater than 100. If the company had more than 100 workers typically in 2019, then the credit is.
allowed just for wages paid to workers who did not work throughout the calendar quarter.
In both cases, “salaries” includes not simply cash payments however likewise a portion of the cost of employer.
provided health care. Fourth Quarter Employee Retention Credit
Employers can be instantly repaid for the credit by lowering the quantity of payroll taxes they.