Lets talk first about How To Take Employee Retention Credit :
Our group here what do these men doing everyone in this room is assisting teach individuals about ERC and uh constantly provide a beautiful breakfast and have people actually discover the program we must head to the room where we have the ability to show some 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 literally 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 indicate you know if you simply start to 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 just I suggest think about the number of real clients 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 confirmed and the check is on the mail in the mail from the IRS heading to the client so that’s how you’re able to track it you understand when you
receive this you know the check is gone for sure and that’s when they pay so they don’t pay anything up until they actually get the money they do not pay bottom line Wonder trust anything up until this letter is validated 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 finished and how many you believe you’ve processed because you started this we’re about 35 000 of these for
about six billion dollars wow so clearly they know 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 Fantastic here you’re at my YouTube channel we’re speaking about something actually essential today the employee retention credit which most of you have never ever become aware of I certainly hadn’t become aware of it till really 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 staff members between 5 and five hundred so I have actually got the specialist with me this is Josh Fox he’s the creator and CEO of bottom line Concepts they’re the largest processor of these ERC credits this is a 170 page program so it’s challenging this isn’t like PPP we just contact your bank manager and state provide 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 have actually ended up being yes the Ambassador and paid spokesperson for this I enjoy this program it’s disappearing soon you got to find out everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply begin there so throughout the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act offered organizations three opportunities 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 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 fine go on sorry I just need to make certain we got that point I suggest that’s a big difference a loan versus cash money I like cash money that’s what we’re discussing 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 lovely tough check in the mail where you get real money from the IRS all right so let’s speak 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 individual 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 workers right you had to have owned a company however it’s based upon you having W-2 employees 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 need 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 walk us through the six quarters so you had quarters 2 3 and 4 of 2020 and you had quarters one two and three of 2021. fine so that’s how it’s determined you have to be on the W-2 throughout that period now let’s talk my favorite part cash 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 precise Kevin is 50 of the employee’s wage to an optimum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers increased to 70 of the staff member’s wage to an optimum of seven thousand per quarter how did that happen um they simply altered the rules in.
2021 versus because the mayhem of the pandemic so they wished 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 approximately 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 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 two you would decrease the 26 000 so what we’re seeing typically Kevin is if you took PPP cash someplace around 10 thousand dollars an individual so let’s state hypothetically you owned a dining establishment 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 internal revenue service so it’s big clearly now the huge concern is why does nobody understand about this due to the fact that appearance when I initially found out about this when I first met Josh you know I have actually got lots of financial investments in lots of companies I’m a significant advocate for entrepreneurship in America and make numerous lots of investments in entrepreneurs of which many suffered through the pandemic when I initially heard about this I called BS I don’t believe 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 and that were well deserved and we used them wisely to stay alive throughout the pandemic so when I heard about this I stated nah it can’t hold true but when I dug around I even called to my political leader pals Guv Senators they didn’t understand about it I imply that’s how you know that’s how misinformation is that there’s no details out there then a bunch of individuals informed me well you can’t get it since you took the PPP also not real so let’s ask Josh why does no one understand about the employee retention credit you understand what’s fascinating you’re talking about the banks Kevin due to the fact that in the PPP loan process the federal government made it very 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 process in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply process procedure that’s all um and here there was turmoil because keep in mind in the initial cares act you might refrain from doing both programs so if you had actually done PPP you could not do ERC in the original program and when they altered the law in 2021 the banks were refraining from doing ERC since it’s not alone so you’re getting a tax refund so the government never made it clear to anyone about how to.
do this does your CFO understand how to do this not really she or he’s never ever 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 accountant’s never done this prior to unless you have an account that entered into this organization and bottom line my firm Kevin has stayed in business because 2009 and we’ve been dealing with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 business so a great deal of our big huge business customers have dealt with bottom line to recover other federal government programs we have actually done sales tax and utilize tax joblessness tax work chance tax credits research and development tax credits unclaimed home property tax all of these other federal government programs.
The staff member retention tax credit is a broad based refundable tax credit developed to encourage.
employers to keep staff members on their payroll. The credit is 50% of approximately $10,000 in wages paid by an.
employer whose service is totally or partly suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is readily available to all companies no matter size consisting of tax exempt organizations. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) small.
organizations who take Small Business Loans.
2. To certify, the company has to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s company is completely 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 similar quarter in 2019. When the.
company’s gross invoices exceed 80% of an equivalent quarter in 2019 they no longer qualify.
after the end of that quarter.
Computation of the Credit.
The quantity of the credit is 50% of the qualifying salaries paid up to $10,000 in total.
It works for wages paid after March 13th and before December 31, 2020.
The meaning of qualifying salaries differs by whether an employer had, usually, more or less than.
100 staff members in 2019.
Business that concentrate on ERC filing assistance normally offer know-how and assistance to help companies navigate the complicated process of claiming the credit. They can provide various services, including:.
How is the employee retention credit calculated? How To Take Employee Retention Credit
Eligibility Evaluation: These companies will examine your organization’s eligibility for the ERC based upon elements such as your industry, profits, and operations. They can help identify if you meet the requirements for the credit and recognize the maximum credit amount you can claim.
Paperwork and Calculation: ERC filing services will help in gathering the required paperwork, such as payroll records and monetary statements, to support your claim. They will also assist calculate the credit amount based upon eligible earnings and other qualifying costs.
Retroactive Claim Review: If you are eligible to declare the ERC for prior quarters, these business can evaluate your past payroll records and financials to determine prospective chances for retroactive credits. They can assist you change previous tax returns to claim these refunds.
Filing Support: Companies concentrating on ERC filings will prepare and send the needed forms and paperwork on your behalf. This includes finishing Kind 941 or any other necessary tax return.
Compliance and Updates: ERC guidelines and assistance have actually evolved gradually. These companies stay upgraded with the current modifications and ensure that your filings comply with the most present standards. If the Internal revenue service requests extra information or carries out an audit associated to your ERC claim, they can likewise provide continuous support.
It is very important to research study and vet any business providing ERC filing help to guarantee their credibility and knowledge. Try to find recognized firms with experience in tax and payroll services, or consider reaching out to relied on accounting companies or tax experts who provide ERC filing support.
Keep in mind that while these business can supply valuable help, it’s always an excellent concept to have a standard understanding of the ERC requirements and procedure 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. government as part of COVID-19 relief procedures. The goal of the ERC is to encourage companies to keep and pay their employees throughout the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to eligible companies, including for-profit organizations, tax-exempt companies, and specific governmental entities. To qualify, employers should fulfill one of two requirements:.
The business operations were fully or partially suspended due to a government order related to COVID-19.
The business experienced a substantial decrease in gross invoices. As discussed previously, for 2021, a substantial decrease is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019, or a 20% decline in gross invoices compared to the instantly preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount amounts to a portion (approximately 70%) of qualified incomes paid to employees, consisting of specific health insurance expenses. The optimum credit per staff member is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, companies that received an Income Defense Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 enables businesses to claim the ERC even if they received a PPP loan. The same incomes can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and enhanced, allowing eligible companies to declare the credit for certified earnings paid as far back as March 13, 2020. This retroactive arrangement offers a chance for businesses to change prior-year income tax return and receive refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their work income tax return, usually Type 941. The excess can be refunded to the employer if the credit exceeds the amount of work taxes owed.
It is necessary to keep in mind that the ERC provisions and eligibility requirements have developed with time. The best strategy is to talk to a tax professional or go to the main internal revenue service site for the most comprehensive and up-to-date details relating to the ERC, consisting of any recent legal changes or updates.
To qualify for the ERC, an organization must satisfy one of 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 decrease in gross receipts. For 2021, a substantial decline is defined as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decline in gross invoices compared to the instantly preceding quarter.
The ERC is readily available to companies of all sizes, including tax-exempt organizations, but there are some exceptions. Government entities and companies that got a PPP loan might have restrictions on declaring the credit.
The process for claiming the ERC involves finishing the needed kinds and including the credit on your employment income tax return (typically Kind 941). The exact time it requires to process the credit can differ based upon numerous elements, including the complexity of your company and the work of the internal revenue service. It’s suggested to consult with a tax expert for assistance specific to your situation.
There are numerous companies that can assist with the procedure of declaring the ERC. Some well-known companies that provide help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the info provided here is based on general knowledge and may not show the most recent updates or modifications to the ERC. It’s important to consult with a tax expert or visit the official internal revenue service website for the most current and accurate details regarding eligibility, declaring treatments, and available support.
Less than 100. If the employer had 100 or fewer workers usually in 2019, then the credit is based.
on wages 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 company still gets the credit.
Greater than 100. The credit is if the company had more than 100 employees on average in 2019.
enabled just for salaries paid to staff members who did not work throughout the calendar quarter.
In both cases, “salaries” includes not simply money payments but also a part of the expense of employer.
offered healthcare. How To Take Employee Retention Credit
Employers can be right away reimbursed for the credit by minimizing the amount of payroll taxes they.