Lets talk first about How To Determine Eligibility For Employee Retention Credit :
Our group here what do these guys doing everybody in this room is assisting teach people about ERC and uh constantly supply a stunning breakfast and have people really learn more about the program we ought to head to the space where we have the ability to show a few of the checks that we are getting for business and I ‘d like to see that what is this this is uh numerous countless dollars actually Kevin numerous millions of dollars so these are replicate copies of the letters that go to customers validating that the check is on the way I suggest you know if you just begin to 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 indicate it’s just I mean consider the number of 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
get this you know the check is opted for sure which’s when they pay so they don’t pay anything until they really receive the money they don’t pay bottom line Wonder trust anything up until this letter is validated the check is on the way they deposit it into their savings account and they can truly trust Wonder trust that the process has actually been ended up and the number of you believe you’ve processed since you started this we’re about 35 000 of these for
about 6 billion dollars wow so clearly they understand what they’re doing which’s what you need 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 essential today the employee retention credit which the majority of you have actually never ever heard of I certainly hadn’t become aware of it till very just recently and learned a lot about it since this is probably the most affordable expense of capital for any small company anywhere
anytime if you have workers in between 5 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 biggest processor of these ERC credits this is a 170 page program so it’s challenging this isn’t like PPP we just call up your bank supervisor and say provide 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 representative for this I love this program it’s disappearing soon you got to discover everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply start there so throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act provided services 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everybody it makes a huge distinction right there two 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 need to make certain we got that point I suggest that’s a huge difference a loan versus money cash I like money money that’s what we’re discussing alright 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 cash from the internal revenue service all right so let’s speak about how it works since it seems like to me if it’s a if it’s employee retention credit that individual needed to be an employee so I’m going to make the Presumption this cash is not for the owner not for individuals on the cap table not for shareholders it’s for employees right you had to have owned a company but it’s based upon you having W-2 employees 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 very first 6 months of 2021 on the W-2 right 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. all right so that’s how it’s determined you have to be on the W-2 throughout that period now let’s talk my preferred part money just how much can you get back per worker that was on a W-2 in those six quarters so the computation in 2020 to be exact Kevin is 50 of the worker’s salary to an optimum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers escalated to 70 of the worker’s income to an optimum of seven thousand per quarter how did that occur um they just altered the rules in.
2021 versus because the turmoil of the pandemic so they wanted 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 approximately five thousand Max and after that what takes place 21 000 Max in 2021 oh that’s how you create twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty six thousand dollars per worker that is since that’s a great deal of money it is now there’s a caveat here the PPP cash would need to be minimized from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would decrease the 26 000 so what we’re seeing on average Kevin is if you took PPP money someplace around 10 thousand dollars a person so let’s say hypothetically you owned a dining establishment in New york city 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 internal revenue service so it’s big obviously now the big question is why does no one know about this because look when I first found out about this when I initially satisfied Josh you know I’ve got lots of investments in great deals of companies I’m a significant advocate for entrepreneurship in America and make numerous lots of investments in entrepreneurs of which numerous suffered through the pandemic when I first found out about this I called BS I don’t believe 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 and that were well deserved and we used them carefully to stay alive throughout the pandemic so when I found out about this I stated nah it can’t hold true but when I dug around I even contacted us to my political leader friends Governor Senators they didn’t understand about it I suggest that’s how you know that’s how misinformation is that there’s no info out there then a lot of individuals informed me well you can’t get it because you took the PPP also not real so let’s ask Josh why does nobody know about the employee retention credit you know what’s fascinating you’re talking about the banks Kevin since in the PPP loan process the federal government made it very clear that if you wanted a PPP loan you would call Wells Fargo Citibank Bank of America any of the huge 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 mayhem since remember in the initial cares act you could not do both programs so if you had done PPP you might not do ERC in the original program and when they altered 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 federal government never ever made it clear to any person about how to.
do this does your CFO understand how to do this not really he or she’s never done it in the past do the banks do it nope the banks don’t do it the payroll companies yeah a few of them are doing it as a payroll business your accountant no your accountant’s never done this prior to unless you have an account that went into this business and bottom line my firm Kevin has actually stayed in business considering that 2009 and we have actually been working with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 companies so a great deal of our big big business clients have worked with bottom line to recover other federal government programs we’ve done sales tax and utilize 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 employee retention tax credit is a broad based refundable tax credit developed to encourage.
employers to keep workers on their payroll. The credit is 50% of approximately $10,000 in salaries paid by an.
company whose company is totally or partly suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
1. The credit is offered to all employers regardless of size including tax exempt companies. There are.
just 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
companies who take Small company Loans.
2. To qualify, the company has to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s organization is totally or partially suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the equivalent quarter in 2019. When the.
company’s gross receipts go above 80% of a comparable quarter in 2019 they no longer certify.
after completion of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the certifying earnings paid up to $10,000 in total.
It is effective for earnings paid after March 13th and before December 31, 2020.
The meaning of qualifying salaries varies by whether an employer had, usually, more or less than.
100 workers in 2019.
Companies that specialize in ERC filing help usually offer know-how and support to help services navigate the complex process of claiming the credit. They can use various services, including:.
How is the employee retention credit calculated? How To Determine Eligibility For Employee Retention Credit
Eligibility Evaluation: These companies will examine your business’s eligibility for the ERC based upon aspects such as your market, profits, and operations. They can help determine if you meet the requirements for the credit and determine the maximum credit amount you can claim.
Paperwork and Calculation: ERC filing services will assist in gathering the needed paperwork, such as payroll records and monetary declarations, to support your claim. They will likewise help calculate the credit amount based on qualified salaries and other certifying expenses.
Retroactive Claim Review: If you are qualified to claim the ERC for prior quarters, these companies can examine your past payroll records and financials to identify prospective opportunities for retroactive credits. They can assist you change prior income tax return to claim these refunds.
Filing Assistance: Business concentrating on ERC filings will prepare and send the necessary kinds and documents on your behalf. This consists of completing Kind 941 or any other necessary tax return.
Compliance and Updates: ERC regulations and assistance have evolved in time. These business stay updated with the current changes and guarantee that your filings adhere to the most current standards. They can also supply ongoing assistance if the IRS demands additional info or conducts an audit related to your ERC claim.
It is necessary to research and vet any business providing ERC filing support to guarantee their trustworthiness and proficiency. Search for established firms with experience in tax and payroll services, or consider connecting to relied on accounting firms or tax professionals who offer ERC submitting support.
Bear in mind that while these companies can supply valuable support, it’s always a good concept to have a standard understanding of the ERC requirements and process yourself. This will help you make informed choices and ensure accurate filings.
The Staff Member 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 companies to retain and pay their staff members throughout the pandemic, even if their operations have actually been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to qualified companies, including for-profit organizations, tax-exempt companies, and certain governmental entities. To certify, employers need to fulfill one of two requirements:.
The business operations were totally or partially suspended due to a government order related to COVID-19.
The business experienced a substantial decrease in gross invoices. As mentioned earlier, for 2021, a substantial decline is specified as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the right away preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity amounts to a percentage (up to 70%) of certified earnings paid to employees, consisting of particular health plan expenditures. 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 received an Income Security Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 enables services to declare the ERC even if they got a PPP loan. However, the exact same wages can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and enhanced, enabling eligible companies to declare the credit for qualified salaries paid as far back as March 13, 2020. This retroactive provision provides an opportunity for companies to amend prior-year income tax return and receive refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their work income tax return, generally Type 941. The excess can be reimbursed to the company if the credit goes beyond the quantity of employment taxes owed.
It is very important to keep in mind that the ERC arrangements and eligibility criteria have actually progressed gradually. The very best strategy is to talk to a tax professional or visit the main internal revenue service site for the most in-depth and updated information relating to the ERC, consisting of any current legal changes or updates.
To qualify for the ERC, a service should satisfy one of the following criteria:.
The business operations were fully or partially suspended due to a federal government order related to COVID-19.
Business experienced a substantial decline in gross invoices. 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 significant decrease is specified 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 organizations of all sizes, consisting of tax-exempt companies, however there are some exceptions. For example, federal government entities and businesses that got a PPP loan may have constraints on claiming the credit.
The process for claiming the ERC includes completing the essential forms and including the credit on your employment tax return (usually Kind 941). The exact time it takes to process the credit can vary based on a number of aspects, including the complexity of your organization and the work of the internal revenue service. It’s recommended to consult with a tax expert for guidance particular to your circumstance.
There are a number of business that can assist with the procedure of declaring the ERC. Some well-known companies that offer assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the info offered here is based upon basic knowledge and might not reflect the most recent updates or modifications to the ERC. It’s important to talk to a tax professional or check out the main internal revenue service site for the most up-to-date and accurate info regarding eligibility, declaring procedures, and offered help.
Less than 100. The credit is based if the company had 100 or less staff members on average in 2019.
on earnings paid to all workers whether they actually worked or not. In other words, even if the.
employees worked full time and got paid for full-time work, the employer still gets the credit.
Greater than 100. The credit is if the employer had more than 100 employees on average in 2019.
enabled only for earnings paid to staff members who did not work throughout the calendar quarter.
In both cases, “incomes” consists of not simply cash payments but likewise a part of the expense of employer.
supplied health care. How To Determine Eligibility For Employee Retention Credit
Companies can be immediately compensated for the credit by minimizing the amount of payroll taxes they.