Lets talk first about Irs Warning Employee Retention Credit :
Our team here what do these men doing everyone in this room is assisting teach individuals about ERC and uh constantly offer a lovely breakfast and have people truly learn more about the program we ought to head to the space where we are able to display some of the checks that we are getting for business and I wish to see that what is this this is uh hundreds of countless dollars literally Kevin numerous countless dollars so these are replicate copies of the letters that go to customers confirming that the check is on the way I suggest you understand 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 mean it’s simply I indicate consider the number of real clients that went through the program yeah this is the very end this is the celebration at the end when the check is confirmed 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 have the ability to track it you understand when you
get this you know the check is chosen sure and that’s when they pay so they don’t pay anything up until they actually receive the cash they do not pay bottom line Wonder trust anything up until this letter is confirmed the check is on the method they transfer it into their checking account and they can genuinely trust Wonder trust that the procedure has actually been ended up and how many you think you have actually processed because you began this we have to do with 35 000 of these for
about 6 billion dollars wow so plainly they understand 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 one of these that’s what matters all right Mr Wonderful here you’re at my YouTube channel we’re discussing something truly important today the employee retention credit which most of you have actually never heard of I definitely hadn’t heard of it till extremely recently and found out a lot about it since this is most likely the lowest cost of capital for any small company anywhere
anytime if you have employees in between five and five hundred so I have actually got the professional 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 challenging this isn’t like PPP we just contact your bank supervisor and say provide me a loan it does not work there’s not a loan it’s an application and Josh is going to inform us all about it and how to get it and why I’ve become yes the Ambassador and paid spokesperson for this I like this program it’s going away very soon you got to learn 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 developed the cares Act and the cares act used organizations 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody 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.
correct the money cash payroll tax refund all right go on sorry I just have to ensure we got that point I indicate that’s a huge difference a loan versus money money I like money cash 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 beautiful tough check in the mail where you get real cash 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 worker retention credit that individual needed 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 employees right you needed to have actually owned a service however it’s based upon you having W-2 workers in America not 10.99. so as long as you had W-2 workers and you paid federal payroll taxes that’s why you would be eligible so you need to be on payroll in 2020 on the W-2 and you need to be on payroll for the first six months of 2021 on the W-2 right so there were 6 quarters the program was open well walk us through the six quarters so you had quarters 2 three and four of 2020 and you had quarters one two and 3 of 2021. alright so that’s how it’s measured you need to be on the W-2 throughout that period now let’s talk my favorite part money how much can you get back per staff member that was on a W-2 in those 6 quarters so the computation in 2020 to be precise Kevin is 50 of the worker’s income to a maximum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers increased to 70 of the staff member’s salary to a maximum of 7 thousand per quarter how did that occur um they just altered the rules in.
2021 versus because the turmoil 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 up to 5 thousand Max and after that what happens 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 employee that is because that’s a great deal of cash 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 lower the 26 000 so what we’re seeing typically Kevin is if you took PPP cash someplace around ten thousand dollars an individual so let’s state hypothetically you owned a dining establishment in New york city City where I’m from and you had a hundred staff members and you took PPP money you would still get a million dollar in the mail from the IRS so it’s big clearly now the big question is why does nobody understand about this due to the fact that appearance when I initially heard about this when I initially met Josh you understand I’ve got lots of investments in great deals of business I’m a major supporter for entrepreneurship in America and make lots of numerous investments in entrepreneurs of which lots of suffered through the pandemic when I first heard about this I called BS I do not 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 which were well been worthy of and we utilized them wisely to survive throughout the pandemic so when I became aware of this I stated nah it can’t hold true however when I dug around I even called to my political leader pals Guv Senators they didn’t know about it I indicate that’s how you know that’s how false information is that there’s no info out there then a bunch of people told me well you can’t get it because you took the PPP also not true so let’s ask Josh why does no one know about the staff member retention credit you know what’s interesting you’re discussing 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 country and they would process procedure 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 due to the fact that remember in the original cares act you might refrain from doing both programs so if you had done PPP you might not do ERC in the initial program and when they changed 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 federal government never ever made it clear to anybody about how to.
do this does your CFO know how to do this not actually he or she’s never ever done it previously 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 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 been in business given that 2009 and we’ve been working with the federal government and the state federal government to recover cash for Fortune 500 Fortune 1000 companies so a great deal of our big big corporate clients have actually worked with bottom line to recover other government programs we’ve 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 government programs.
The staff member retention tax credit is a broad based refundable tax credit developed to motivate.
employers to keep employees on their payroll. The credit is 50% of approximately $10,000 in incomes paid by an.
employer whose organization is totally or partially suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is available to all employers despite size consisting of tax exempt companies. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
services who take Small company Loans.
2. To certify, the company needs to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s company is fully or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross receipts are listed below 50% of the equivalent quarter in 2019. As soon as the.
employer’s gross invoices go above 80% of a similar quarter in 2019 they no longer qualify.
after the end of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the qualifying earnings paid up to $10,000 in overall.
It works for earnings paid after March 13th and prior to December 31, 2020.
The definition of certifying salaries varies by whether a company had, on average, basically than.
100 employees in 2019.
Companies that specialize in ERC filing assistance normally provide proficiency and support to assist companies navigate the intricate procedure of claiming the credit. They can use numerous services, consisting of:.
How is the employee retention credit calculated? Irs Warning Employee Retention Credit
Eligibility Assessment: These companies will assess your business’s eligibility for the ERC based on factors such as your industry, revenue, and operations. They can assist identify if you satisfy the requirements for the credit and identify the maximum credit quantity you can declare.
Documentation and Estimation: ERC filing services will assist in collecting the needed paperwork, such as payroll records and financial statements, to support your claim. They will likewise help calculate the credit quantity based on qualified wages and other certifying expenditures.
Retroactive Claim Review: If you are eligible to claim the ERC for prior quarters, these companies can examine your past payroll records and financials to recognize potential chances for retroactive credits. They can help you change prior income tax return to claim these refunds.
Filing Help: Companies specializing in ERC filings will prepare and send the required kinds and paperwork in your place. This includes completing Form 941 or any other required tax forms.
Compliance and Updates: ERC policies and guidance have actually progressed in time. These business remain updated with the current modifications and ensure that your filings adhere to the most current guidelines. They can likewise provide ongoing support if the IRS demands additional information or performs an audit related to your ERC claim.
It’s important to research and vet any company providing ERC filing support to ensure their credibility and competence. Look for established companies with experience in tax and payroll services, or consider reaching out to trusted accounting companies or tax professionals who offer ERC filing assistance.
Keep in mind that while these business can offer important help, it’s always a good idea to have a standard understanding of the ERC requirements and process yourself. This will help you make notified decisions and guarantee accurate 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 companies to keep and pay their workers during the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to eligible employers, consisting of for-profit businesses, tax-exempt companies, and certain governmental entities. To certify, employers need to meet one of two requirements:.
The business operations were completely or partially suspended due to a federal government order related to COVID-19.
Business experienced a substantial decrease in gross receipts. 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 significant decline is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity is equal to a percentage (as much as 70%) of certified earnings paid to employees, including particular health insurance costs. The maximum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, services that got an Income Defense Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 allows companies to declare the ERC even if they got a PPP loan. The very same salaries can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and boosted, permitting qualified companies to declare the credit for certified earnings paid as far back as March 13, 2020. This retroactive provision supplies an opportunity for companies to modify prior-year income tax return and receive refunds.
Declaring the Credit: Employers can declare the ERC by reporting it on their employment income tax return, generally Type 941. If the credit exceeds the amount of employment taxes owed, the excess can be reimbursed to the company.
It is very important to note that the ERC provisions and eligibility criteria have actually progressed in time. The very best course of action is to talk to a tax professional or go to the official IRS site for the most in-depth and current details concerning the ERC, including any current legal changes or updates.
To get approved for the ERC, a business must fulfill among the following criteria:.
Business operations were fully or partly suspended due to a federal government order related to COVID-19.
The business experienced a considerable decline in gross receipts. For 2021, a substantial decline is specified as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the instantly preceding quarter.
The ERC is offered to companies of all sizes, consisting of tax-exempt companies, but there are some exceptions. For example, government entities and companies that received a PPP loan might have limitations on declaring the credit.
The process for declaring the ERC involves finishing the essential types and including the credit on your employment income tax return (usually Kind 941). The exact time it takes to process the credit can vary based on several elements, including the intricacy of your business and the work of the internal revenue service. It’s advised to talk to a tax professional for assistance particular to your circumstance.
There are several companies that can aid with the procedure of claiming the ERC. These consist of accounting firms, tax advisory services, and payroll company. Some well-known companies that use assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research and call these companies straight to inquire about their fees and services.
Please keep in mind that the information provided here is based on general knowledge and may not show the most recent updates or changes to the ERC. It is necessary to speak with a tax expert or visit the main IRS website for the most precise and current details regarding eligibility, declaring procedures, and offered help.
Less than 100. The credit is based if the company had 100 or less workers on average in 2019.
on earnings paid to all employees whether they actually worked or not. Simply put, even if the.
employees worked full-time and made money 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.
allowed just for earnings paid to staff members who did not work during the calendar quarter.
In both cases, “salaries” consists of not simply cash payments however likewise a part of the cost of employer.
supplied healthcare. Irs Warning Employee Retention Credit
Employers can be immediately repaid for the credit by reducing the amount of payroll taxes they.