Lets talk first about Is My Business Eligible For The Employee Retention Credit :
Our group here what do these guys doing everyone in this space is helping teach individuals about ERC and uh always provide a lovely breakfast and have individuals actually learn about the program we should 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 millions of dollars actually Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to clients confirming that the check is on the way I indicate you understand if you simply begin to take a look at a few 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 just I imply think about how many actual customers 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 verified and the check is on the mail in the mail from the internal revenue service heading to the consumer so that’s how you have the ability to track it you know when you
get this you understand the check is chosen sure which’s when they pay so they do not pay anything up until they in fact get the money they do not pay bottom line Wonder trust anything till this letter is validated the check is on the method they deposit it into their bank account and they can truly rely on Wonder trust that the process has actually been ended up and how many you think you have actually processed considering that you began this we’re about 35 000 of these for
about 6 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 Terrific here you’re at my YouTube channel we’re discussing something really crucial today the employee retention credit which most of you have actually never ever heard of I definitely had not heard of it till really recently and found out a lot about it since this is probably the lowest cost of capital for any small company anywhere
anytime if you have staff members between five and five hundred so I have actually got the professional with me this is Josh Fox he’s the creator and CEO of bottom line Principles they’re the biggest processor of these ERC credits this is a 170 page program so it’s difficult this isn’t like PPP we just call 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 have actually ended up being yes the Ambassador and paid spokesperson for this I love this program it’s disappearing very soon you got to learn all about it let’s talk worker retention credit Josh Fox what is an ERC let’s just start there so during the Trump Administration when President Trump was enacted they created the cares Act and the cares act provided companies 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone it makes a big difference right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
remedy the money cash payroll tax refund alright go on sorry I just have to ensure we got that point I imply that’s a big difference a loan versus money cash I like cash cash 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 initial cares Act is the ERC and yes Kevin it is a beautiful hard check in the mail where you get actual cash from the IRS all right so let’s talk about how it works because it sounds like to me if it’s a if it’s worker retention credit that individual had to be a worker 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 business but it’s based upon you having W-2 workers 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 six months of 2021 on the W-2 proper so there were six quarters the program was open well walk us through the six quarters so you had quarters two 3 and 4 of 2020 and you had quarters one two and three of 2021. all right so that’s how it’s determined you need to be on the W-2 throughout that duration now let’s talk my favorite part money just how much can you return per employee that was on a W-2 in those 6 quarters so the estimation in 2020 to be precise Kevin is 50 of the worker’s wage to a maximum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers escalated to 70 of the worker’s wage to a maximum of 7 thousand per quarter how did that occur um they simply changed the rules in.
2021 versus since the mayhem of the pandemic so they wanted 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 as much as five thousand Max and after that what takes place 21 000 Max in 2021 oh that’s how you come up with twenty 6 thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty 6 thousand dollars per employee that is since that’s a great deal of money it is now there’s a caveat here the PPP money would have to be minimized from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would lower the 26 000 so what we’re seeing typically Kevin is if you took PPP money someplace around 10 thousand dollars an individual so let’s say hypothetically you owned a restaurant in New york city 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 clearly now the huge concern is why does nobody understand about this because look when I initially found out about this when I first satisfied Josh you understand I’ve got lots of investments in lots of companies I’m a major advocate for entrepreneurship in America and make lots of many investments in entrepreneurs of which lots of suffered through the pandemic when I first became aware of this I called BS I don’t think it because I use the PPP we went through the money 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 survive during the pandemic so when I found out about this I said nah it can’t be true but when I dug around I even called to my politician pals Governor Senators they didn’t learn about it I suggest that’s how you understand that’s how false information is that there’s no information out there then a bunch of individuals informed me well you can’t get it due to the fact that you took the PPP also not true so let’s ask Josh why does no one know about the worker retention credit you understand what’s interesting you’re speaking about the banks Kevin since in the PPP loan procedure 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 simply procedure process that’s all um and here there was turmoil since keep in mind in the original cares act you might not do 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 because 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 truly she or he’s never done it before do the banks do it nope the banks do not do it the payroll business yeah some of them are doing it as a payroll business your accountant no your accountant’s never ever done this before unless you have an account that entered into this service 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 government to recover money for Fortune 500 Fortune 1000 companies so a lot of our big big business clients have actually dealt with bottom line to recover other federal government programs we’ve done sales tax and use tax unemployment tax work chance tax credits research and development tax credits unclaimed property real estate tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit designed to motivate.
companies to keep staff members on their payroll. The credit is 50% of approximately $10,000 in earnings paid by an.
Due to the fact that of COVID-19 or whose gross receipts, company whose organization is fully or partially suspended.
decline by more than 50%.
1. The credit is readily available to all employers regardless of size consisting of tax exempt organizations. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) little.
services who take Small company Loans.
2. To certify, the employer needs to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s company is completely or partly suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross invoices are listed below 50% of the equivalent quarter in 2019. When the.
company’s gross invoices exceed 80% of an equivalent quarter in 2019 they no longer qualify.
after completion of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the qualifying incomes paid up to $10,000 in overall.
It works for wages paid after March 13th and before December 31, 2020.
The definition of qualifying wages varies by whether a company had, typically, basically than.
100 staff members in 2019.
Companies that concentrate on ERC filing assistance generally supply know-how and support to assist businesses browse the intricate process of declaring the credit. They can offer different services, including:.
How is the employee retention credit calculated? Is My Business Eligible For The Employee Retention Credit
Eligibility Assessment: These business will evaluate your service’s eligibility for the ERC based on elements such as your industry, earnings, and operations. If you meet the requirements for the credit and recognize the optimum credit amount you can claim, they can help determine.
Documents and Computation: ERC filing services will help in collecting the necessary documentation, such as payroll records and monetary declarations, to support your claim. They will also help calculate the credit quantity based on qualified salaries and other certifying expenses.
Retroactive Claim Review: If you are eligible to claim the ERC for prior quarters, these business can evaluate your previous payroll records and financials to identify potential opportunities for retroactive credits. They can assist you modify prior income tax return to claim these refunds.
Filing Support: Companies concentrating on ERC filings will prepare and send the necessary forms and documents on your behalf. This consists of finishing Kind 941 or any other required tax return.
Compliance and Updates: ERC regulations and guidance have evolved in time. These business stay updated with the latest changes and make sure that your filings adhere to the most existing standards. 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 study and vet any company using ERC filing help to guarantee their credibility and competence. Try to find established firms with experience in tax and payroll services, or think about connecting to relied on accounting companies or tax specialists who use ERC filing support.
Remember that while these business can provide valuable support, it’s constantly an excellent idea to have a fundamental understanding of the ERC requirements and process yourself. This will help you make notified choices and guarantee precise 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 encourage organizations to maintain and pay their staff members during the pandemic, even if their operations have been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is available to qualified employers, including for-profit organizations, tax-exempt companies, and particular governmental entities. To qualify, employers should satisfy one of two requirements:.
Business operations were totally or partially suspended due to a federal government order related to COVID-19.
Business experienced a considerable decline in gross receipts. As pointed out earlier, for 2021, a significant decrease is specified as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a substantial decline is specified as a 20% decline in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross receipts compared to the right away preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit quantity is equal to a percentage (approximately 70%) of certified incomes paid to employees, including 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: At first, businesses that got a Paycheck Protection Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 permits services to declare the ERC even if they received a PPP loan. The very same incomes can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and improved, enabling eligible employers to declare the credit for qualified salaries paid as far back as March 13, 2020. This retroactive provision offers an opportunity for services to modify prior-year tax returns and get refunds.
Claiming the Credit: Companies can declare the ERC by reporting it on their work tax returns, typically Type 941. The excess can be reimbursed to the company if the credit goes beyond the amount of employment taxes owed.
It is essential to keep in mind that the ERC arrangements and eligibility requirements have progressed gradually. The best course of action is to seek advice from a tax expert or go to the official internal revenue service site for the most updated and detailed details concerning the ERC, including any current legal changes or updates.
To receive the ERC, a business should fulfill one of the following requirements:.
Business operations were fully or partly suspended due to a federal government order related to COVID-19.
Business experienced a significant decrease in gross invoices. For 2021, a substantial decline is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decline in gross invoices compared to the right away preceding quarter.
The ERC is available to services of all sizes, consisting of tax-exempt companies, but there are some exceptions. Government entities and organizations that received a PPP loan might have limitations on declaring the credit.
The procedure for claiming the ERC involves finishing the required kinds and consisting of the credit on your employment tax return (generally Form 941). The exact time it requires to process the credit can vary based upon several factors, including the intricacy of your organization and the work of the internal revenue service. It’s recommended to consult with a tax expert for guidance specific to your situation.
There are a number of business that can help with the procedure of claiming the ERC. These include accounting companies, tax advisory services, and payroll provider. Some widely known companies that provide assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research and call these companies directly to inquire about their services and charges.
Please keep in mind that the information offered here is based upon basic knowledge and might not show the most current updates or modifications to the ERC. It’s important to speak with a tax professional or go to the official IRS site for the most updated and accurate information relating to eligibility, declaring procedures, and offered help.
Less than 100. The credit is based if the employer had 100 or less staff members on average in 2019.
on incomes paid to all workers whether they really worked or not. In other words, even if the.
employees worked full time and earned money for full time work, the company still gets the credit.
Greater than 100. The credit is if the company had more than 100 staff members on average in 2019.
allowed only for salaries paid to employees who did not work throughout the calendar quarter.
In both cases, “wages” consists of not simply cash payments however likewise a part of the cost of company.
offered healthcare. Is My Business Eligible For The Employee Retention Credit
Employers can be immediately repaid for the credit by decreasing the quantity of payroll taxes they.