Lets talk first about How Do I Get The Employee Retention Credit :
Our group here what do these people doing everyone in this space is assisting teach individuals about ERC and uh always provide a beautiful breakfast and have individuals truly learn about the program we ought to head to the room where we have the ability to display some of the checks that we are getting for business and I want to see that what is this this is uh numerous countless dollars actually Kevin hundreds of countless dollars so these are replicate copies of the letters that go to clients verifying that the check is on the method I mean you know if you just start to take a look at some 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 simply I suggest consider how many real clients 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 don’t pay anything till they actually get the cash 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 genuinely rely on Wonder trust that the process has been ended up and the number of you think you have actually processed because you started this we have to do with 35 000 of these for
about six billion dollars wow so clearly they know what they’re doing which’s what you require you need 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 talking about something really crucial today the staff member retention credit which most of you have actually never ever become aware of I certainly hadn’t become aware of it until extremely just recently and found out a lot about it because this is probably the most affordable expense of capital for any small business anywhere
anytime if you have workers between five and five hundred so I’ve got the expert with me this is Josh Fox he’s the founder and CEO of bottom line Concepts 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 contact your bank supervisor and say give me a loan it does not 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’ve become yes the Ambassador and paid representative for this I like this program it’s going away soon you got to learn everything about it let’s talk worker retention credit Josh Fox what is an ERC let’s simply start there so throughout the Trump Administration when President Trump was enacted they developed the cares Act and the cares act provided companies three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everyone it makes a huge difference right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
fix the cash cash payroll tax refund alright go on sorry I just need to make sure we got that point I indicate that’s a big difference a loan versus cash 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 lovely hard check in the mail where you get actual money 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 individual needed to be a staff member so I’m going to make the Assumption this money is not for the owner not for people on the cap table not for investors it’s for workers right you had to have owned a business however it’s based upon you having W-2 workers in America not 10.99. so as long as you had W-2 employees 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 six months of 2021 on the W-2 right so there were 6 quarters the program was open well walk us through the 6 quarters so you had quarters 2 3 and four of 2020 and you had quarters one 2 and 3 of 2021. alright so that’s how it’s measured you have to be on the W-2 during that period now let’s talk my favorite part money just how much can you get back per worker that was on a W-2 in those six quarters so the calculation in 2020 to be exact Kevin is 50 of the employee’s wage to a maximum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s wage to a maximum of 7 thousand per quarter how did that happen um they just altered the rules in.
2021 versus since 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 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 five thousand in twenty twenty that’s twenty six thousand dollars per worker that is because that’s a great deal of cash it is now there’s a caveat here the PPP cash would have to be minimized 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 cash someplace around 10 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 workers and you took PPP money you would still get a million dollar in the mail from the internal revenue service so it’s huge undoubtedly now the big concern is why does nobody know about this due to the fact that appearance when I first found out about this when I initially met Josh you understand I’ve got great deals of investments in great deals of companies I’m a major advocate for entrepreneurship in America and make lots of lots of financial investments in business owners of which lots of suffered through the pandemic when I first found out about this I called BS I don’t think it due to the fact that I utilize the PPP we went through the money center Banks to get it it was very easy to do we had our CEOs call the banks they got their loans which were well should have and we used them carefully to stay alive throughout the pandemic so when I found out about this I said nah it can’t hold true however when I dug around I even contacted us to my politician pals Governor Senators they didn’t learn about it I suggest that’s how you know 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 likewise not true so let’s ask Josh why does nobody learn 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 big banks in our nation and they would process process 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 turmoil due to the fact that keep in mind in the original cares act you could not do 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 due to the fact that it’s not alone so you’re getting a tax refund so the government never ever made it clear to anyone about how to.
do this does your CFO understand how to do this not truly he or she’s never ever done it before do the banks do it nope the banks do not do it the payroll business yeah a few of them are doing it as a payroll business your accounting professional no your accounting professional’s never done this prior to unless you have an account that went into this company and bottom line my firm Kevin has been in business given that 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 huge big corporate customers have actually worked with bottom line to recover 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 created to encourage.
companies to keep staff members on their payroll. The credit is 50% of up to $10,000 in incomes paid by an.
Due to the fact that of COVID-19 or whose gross invoices, company whose organization is totally or partly suspended.
decline by more than 50%.
Schedule.
1. The credit is available to all employers despite size including tax exempt organizations. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) little.
companies who take Small Business Loans.
2. To certify, the company has to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s service is fully or partly suspended by government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross receipts are below 50% of the equivalent quarter in 2019. Once the.
employer’s gross receipts go above 80% of a similar quarter in 2019 they no longer certify.
after the end of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the certifying incomes paid up to $10,000 in overall.
It is effective for salaries paid after March 13th and before December 31, 2020.
The definition of certifying wages differs by whether a company had, on average, basically than.
100 staff members in 2019.
Companies that specialize in ERC filing help typically supply knowledge and assistance to help services navigate the complex procedure of claiming the credit. They can use numerous services, consisting of:.
How is the employee retention credit calculated? How Do I Get The Employee Retention Credit
Eligibility Evaluation: These business will examine your business’s eligibility for the ERC based on aspects such as your market, revenue, and operations. If you satisfy the requirements for the credit and recognize the maximum credit quantity you can claim, they can assist identify.
Documents and Estimation: ERC filing services will help in collecting the necessary documents, such as payroll records and monetary declarations, to support your claim. They will also help compute the credit amount based upon eligible earnings and other qualifying expenses.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for prior quarters, these business can evaluate your past payroll records and financials to recognize prospective opportunities for retroactive credits. They can help you modify previous income tax return to declare these refunds.
Filing Assistance: Business focusing on ERC filings will prepare and send the essential kinds and documents in your place. This consists of completing Kind 941 or any other required tax return.
Compliance and Updates: ERC guidelines and assistance have actually developed over time. These business stay updated with the current modifications and guarantee that your filings abide by the most existing guidelines. If the IRS demands extra info or conducts an audit associated to your ERC claim, they can likewise supply ongoing support.
It’s important to research study and veterinarian any company using ERC filing help to ensure their reliability and know-how. Search for recognized companies with experience in tax and payroll services, or consider connecting to trusted accounting firms or tax specialists who use ERC submitting assistance.
Remember that while these companies can offer valuable help, it’s constantly an excellent concept to have a basic understanding of the ERC requirements and procedure yourself. This will assist you make informed decisions and make sure accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief steps. The goal of the ERC is to encourage businesses to retain and pay their workers throughout the pandemic, even if their operations have actually been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to eligible companies, consisting of for-profit businesses, tax-exempt companies, and certain governmental entities. To qualify, companies must meet one of two requirements:.
Business operations were completely or partially suspended due to a government order related to COVID-19.
Business experienced a significant decrease in gross receipts. As mentioned earlier, for 2021, a substantial decrease is defined as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the instantly preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount amounts to a percentage (as much as 70%) of qualified salaries paid to staff members, including certain health plan costs. The optimum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, businesses that got a Paycheck Defense Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 enables companies to claim the ERC even if they got a PPP loan. Nevertheless, the exact same incomes can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and enhanced, permitting eligible companies to claim the credit for qualified earnings paid as far back as March 13, 2020. This retroactive provision offers an opportunity for companies to change prior-year tax returns and get refunds.
Declaring the Credit: Employers can declare the ERC by reporting it on their work tax returns, normally Form 941. If the credit goes beyond the quantity of employment taxes owed, the excess can be refunded to the employer.
It is very important to keep in mind that the ERC arrangements and eligibility requirements have actually developed gradually. The best strategy is to speak with a tax professional or visit the official IRS website for the most detailed and current information concerning the ERC, including any current legislative changes or updates.
To get approved for the ERC, a company must meet among the following criteria:.
The business operations were fully or partly suspended due to a federal government order related to COVID-19.
The business experienced a substantial decrease in gross receipts. For 2021, a significant decline is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decrease is specified as a 20% decline in gross invoices compared to the very same quarter in 2019, or a 20% decrease in gross receipts compared to the immediately preceding quarter.
The ERC is offered to businesses of all sizes, consisting of tax-exempt organizations, however there are some exceptions. Federal government entities and businesses that received a PPP loan may have limitations on declaring the credit.
The process for claiming the ERC involves completing the needed kinds and consisting of the credit on your employment tax return (usually Form 941). The exact time it requires to process the credit can differ based on numerous elements, including the intricacy of your organization and the work of the internal revenue service. It’s recommended to seek advice from a tax expert for guidance particular to your scenario.
There are numerous business that can aid with the procedure of declaring the ERC. These consist of accounting companies, tax advisory services, and payroll company. Some popular business that use assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research and call these companies directly to inquire about their charges and services.
Please note that the information provided here is based on basic understanding and might not reflect the most current updates or modifications to the ERC. It is necessary to talk to a tax expert or check out the official IRS website for the most precise and updated information relating to eligibility, declaring procedures, and offered support.
Less than 100. The credit is based if the employer had 100 or less workers on average in 2019.
on salaries paid to all employees whether they actually worked or not. To put it simply, even if the.
workers worked full time and made money for full time work, the employer still gets the credit.
Greater than 100. If the company had more than 100 staff members usually in 2019, then the credit is.
enabled just for salaries paid to staff members who did not work throughout the calendar quarter.
In both cases, “incomes” consists of not just cash payments however likewise a portion of the cost of employer.
provided health care. How Do I Get The Employee Retention Credit
Payment.
Employers can be immediately reimbursed for the credit by lowering the amount of payroll taxes they.