Lets talk first about Is Employee Retention Credit :
Our group here what do these guys doing everybody in this room is assisting teach people about ERC and uh constantly offer a beautiful breakfast and have individuals actually find out about the program we must head to the space 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 hundreds of millions of dollars actually Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to clients verifying that the check is on the way I imply you know if you just 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 suggest it’s just I imply consider the number of actual 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 IRS 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 opted for sure which’s when they pay so they do not pay anything till they in fact get the money they don’t pay bottom line Wonder trust anything till this letter is confirmed the check is on the method they deposit it into their checking account and they can truly trust Wonder trust that the process has been ended up and how many you believe you’ve processed because you began this we’re about 35 000 of these for
about six billion dollars wow so plainly they know what they’re doing which’s what you require 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 Terrific here you’re at my YouTube channel we’re talking about something truly crucial today the staff member retention credit which the majority of you have actually never heard of I definitely had not become aware of it up until really just recently and found out a lot about it due to the fact that this is most likely the most affordable cost of capital for any small business anywhere
anytime if you have staff members between five 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 Ideas they’re the largest processor of these ERC credits this is a 170 page program so it’s hard this isn’t like PPP we just call up your bank manager and say offer 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 have actually become yes the Ambassador and paid spokesperson for this I like this program it’s going away very soon you got to find out all about it let’s talk staff member 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 offered services 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 big difference right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the cash cash payroll tax refund okay go on sorry I simply have to ensure we got that point I suggest that’s a huge difference a loan versus money money I like money money that’s what we’re discussing fine 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 hard check in the mail where you get real money from the internal revenue service all right so let’s talk about how it works because it seems like to me if it’s a if it’s staff member retention credit that person had to be a worker 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 staff members right you needed to have actually owned a company but it’s based on you having W-2 employees 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 have to be on payroll in 2020 on the W-2 and you need to be on payroll for the very first 6 months of 2021 on the W-2 appropriate so there were six quarters the program was open well walk us through the six quarters so you had quarters two three and 4 of 2020 and you had quarters one 2 and three of 2021. okay 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 cash just how much can you return per staff member that was on a W-2 in those six quarters so the computation in 2020 to be specific Kevin is 50 of the staff member’s wage to an optimum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the staff member’s salary to an optimum of 7 thousand per quarter how did that take place um they just changed the rules in.
2021 versus since the turmoil 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 approximately five thousand Max and after that what occurs 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 because that’s a great deal of money it is now there’s a caveat here the PPP money would have to be lowered from the twenty six 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 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 staff members and you took PPP cash you would still get a million dollar in the mail from the IRS so it’s big certainly now the big question is why does no one understand about this since appearance when I first heard about this when I initially satisfied Josh you know I have actually got lots of investments in lots of business I’m a significant advocate for entrepreneurship in America and make lots of many financial investments in entrepreneurs of which many suffered through the pandemic when I initially heard about this I called BS I do not 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 which were well deserved and we utilized them sensibly to stay alive during the pandemic so when I found out about this I stated nah it can’t be true but when I dug around I even contacted us to my political leader buddies Guv Senators they didn’t understand about it I suggest that’s how you know that’s how false information is that there’s no details out there then a lot of people told me well you can’t get it because you took the PPP likewise not real so let’s ask Josh why does no one learn about the worker retention credit you understand what’s fascinating you’re speaking about the banks Kevin because in the PPP loan process the federal government made it really clear that if you desired a PPP loan you would call Wells Fargo Citibank Bank of America any of the big 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 just process procedure that’s all um and here there was mayhem since remember in the original cares act you might refrain from doing both programs so if you had actually done PPP you might not do ERC in the original program and when they changed the law in 2021 the banks were not doing ERC since it’s not alone so you’re getting a tax refund so the federal government never made it clear to anyone about how to.
do this does your CFO understand how to do this not actually she or he’s never ever done it before do the banks do it nope the banks don’t do it the payroll business yeah a few of them are doing it as a payroll business your accountant no your accounting professional’s never done this before unless you have an account that entered into this business and bottom line my company Kevin has stayed in business since 2009 and we’ve been dealing with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 business so a great deal of our huge huge business clients have actually dealt with bottom line to recuperate other federal government programs we’ve done sales tax and utilize tax joblessness tax work opportunity tax credits research and development tax credits unclaimed property property tax all of these other government programs.
The worker retention tax credit is a broad based refundable tax credit designed to motivate.
companies to keep employees on their payroll. The credit is 50% of as much as $10,000 in wages paid by an.
Because of COVID-19 or whose gross invoices, employer whose organization is fully or partly suspended.
decline by more than 50%.
1. The credit is available to all employers no matter 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 Business Loans.
2. To qualify, the employer needs to satisfy one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s business is fully or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross receipts are below 50% of the comparable quarter in 2019. Once the.
employer’s gross invoices exceed 80% of a comparable 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 qualifying earnings paid up to $10,000 in overall.
It works for incomes paid after March 13th and before December 31, 2020.
The definition of qualifying incomes differs by whether an employer had, on average, basically than.
100 staff members in 2019.
Business that focus on ERC filing assistance usually supply know-how and support to assist companies navigate the intricate process of declaring the credit. They can use different services, including:.
How is the employee retention credit calculated? Is Employee Retention Credit
Eligibility Evaluation: These business will examine your organization’s eligibility for the ERC based upon factors such as your industry, revenue, and operations. If you fulfill the requirements for the credit and determine the maximum credit amount you can claim, they can help determine.
Documentation and Computation: ERC filing services will assist in collecting the necessary documentation, such as payroll records and monetary statements, to support your claim. They will also help compute the credit amount based on qualified salaries and other certifying costs.
Retroactive Claim Review: If you are eligible to declare the ERC for prior quarters, these companies can evaluate your previous payroll records and financials to recognize possible opportunities for retroactive credits. They can assist you amend previous income tax return to claim these refunds.
Filing Assistance: Companies focusing on ERC filings will prepare and send the essential forms and documentation on your behalf. This consists of finishing Type 941 or any other required tax forms.
Compliance and Updates: ERC regulations and assistance have actually progressed over time. These companies stay upgraded with the latest changes and make sure that your filings abide by the most current standards. They can likewise provide continuous support if the internal revenue service requests extra information or carries out an audit related to your ERC claim.
It is necessary to research study and vet any company using ERC filing support to ensure their trustworthiness and knowledge. Try to find established companies with experience in tax and payroll services, or think about connecting to relied on accounting firms or tax professionals who use ERC filing assistance.
Keep in mind that while these business can provide valuable help, it’s always a good idea to have a fundamental understanding of the ERC requirements and process yourself. This will help you make notified decisions and make sure precise 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 objective of the ERC is to encourage services to maintain and pay their employees during the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to qualified companies, including for-profit organizations, tax-exempt organizations, and specific governmental entities. To certify, employers must fulfill one of two criteria:.
Business operations were completely or partly suspended due to a federal government order related to COVID-19.
The business experienced a substantial decrease in gross receipts. As pointed out earlier, for 2021, a substantial decline is specified as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a considerable decrease is specified as a 20% decline in gross receipts compared to the very same quarter in 2019, or a 20% decline in gross invoices compared to the immediately preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit amount amounts to a percentage (up to 70%) of qualified wages paid to employees, 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: At first, businesses that received a Paycheck Defense Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 permits companies to claim the ERC even if they got a PPP loan. Nevertheless, the very same salaries can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and improved, enabling eligible employers to declare the credit for certified wages paid as far back as March 13, 2020. This retroactive arrangement provides an opportunity for services to amend prior-year income tax return and get refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their work income tax return, typically Kind 941. If the credit goes beyond the quantity of work taxes owed, the excess can be refunded to the company.
It is very important to note that the ERC provisions and eligibility criteria have actually developed in time. The very best course of action is to talk to a tax professional or check out the official IRS site for the most updated and comprehensive information relating to the ERC, consisting of any recent legislative modifications or updates.
To get approved for the ERC, a company must fulfill among the following requirements:.
Business operations were totally or partly suspended due to a federal government order related to COVID-19.
Business experienced a considerable decrease in gross invoices. For 2021, a considerable decrease is specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decline is specified as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decline in gross invoices compared to the immediately preceding quarter.
The ERC is available to businesses of all sizes, consisting of tax-exempt organizations, however there are some exceptions. For example, government entities and businesses that received a PPP loan might have constraints on claiming the credit.
The procedure for declaring the ERC includes completing the needed types and consisting of the credit on your employment income tax return (normally Kind 941). The exact time it requires to process the credit can vary based upon numerous factors, consisting of the complexity of your organization and the work of the internal revenue service. It’s advised to talk to a tax professional for assistance specific to your scenario.
There are numerous business that can aid with the process of claiming the ERC. These consist of accounting firms, tax advisory services, and payroll service providers. Some well-known companies that use help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research study and get in touch with these companies straight to ask about their fees and services.
Please keep in mind that the details supplied here is based on general knowledge and may not reflect the most recent updates or modifications to the ERC. It is necessary to speak with a tax professional or visit the official internal revenue service website for the most updated and accurate information relating to eligibility, claiming treatments, and readily available support.
Less than 100. If the company had 100 or fewer staff members typically in 2019, then the credit is based.
on wages paid to all staff members whether they really worked or not. Simply put, even if the.
employees worked full time and got paid for full time work, the company still gets the credit.
Greater than 100. If the company had more than 100 staff members typically in 2019, then the credit is.
permitted only for incomes paid to employees who did not work throughout the calendar quarter.
In both cases, “earnings” consists of not simply cash payments however also a part of the cost of employer.
offered health care. Is Employee Retention Credit
Employers can be instantly compensated for the credit by decreasing the amount of payroll taxes they.