Lets talk first about New Business Employee Retention Credit :
Our group here what do these people doing everybody in this room is assisting teach individuals about ERC and uh always provide a gorgeous breakfast and have people actually find out 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 hundreds of millions of dollars actually Kevin numerous countless dollars so these are duplicate copies of the letters that go to customers confirming that the check is on the method I imply you understand if you just begin to look at some of these here I mean this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s simply I imply think about how many real clients that went through the program yeah this is the very end this is the celebration at the end when the check is verified the numbers are verified 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 know when you
receive this you know the check is gone for sure and that’s when they pay so they don’t pay anything till they really receive the cash they do not pay bottom line Wonder trust anything till this letter is verified the check is on the way they transfer it into their checking account and they can genuinely rely on Wonder trust that the process has been completed and the number of you believe you’ve processed because you began this we’re about 35 000 of these for
about six billion dollars wow so clearly they know what they’re doing which’s what you need you require 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 essential today the staff member retention credit which most of you have never ever heard of I certainly had not become aware of it till really just recently and discovered a lot about it since this is probably the lowest expense of capital for any small business anywhere
anytime if you have employees between five and five hundred so I’ve 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 hard this isn’t like PPP we just call up your bank supervisor and say offer me a loan it does not 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 become yes the Ambassador and paid representative for this I enjoy this program it’s disappearing soon you got to discover everything about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply begin there so throughout the Trump Administration when President Trump was enacted they developed the cares Act and the cares act offered services 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody it makes a big difference right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the cash money payroll tax refund all right go on sorry I just need to ensure we got that point I suggest that’s a huge difference a loan versus money money I like cash cash that’s what we’re speaking about 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 original cares Act is the ERC and yes Kevin it is a stunning hard check in the mail where you get real cash from the internal revenue service all right so let’s discuss how it works since it seems like to me if it’s a if it’s worker retention credit that individual had 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 investors it’s for staff members right you needed to have actually owned a company however it’s based upon you having W-2 staff members in America not 10.99. so as long as you had W-2 staff members 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 very first six months of 2021 on the W-2 correct so there were 6 quarters the program was open well stroll us through the 6 quarters so you had quarters 2 3 and four of 2020 and you had quarters one two and three of 2021. okay so that’s how it’s determined you have to be on the W-2 during 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 computation in 2020 to be specific Kevin is 50 of the employee’s wage to a maximum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s wage to a maximum of seven thousand per quarter how did that happen um they just altered the rules in.
2021 versus since the turmoil of the pandemic so they wished to even get more to keep those workers 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 happens 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 worker that is since that’s a great deal of cash it is now there’s a caveat here the PPP money would need to be lowered 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 usually 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 cash you would still get a million dollar in the mail from the internal revenue service so it’s substantial undoubtedly now the huge concern is why does no one know about this because appearance when I first became aware of this when I first fulfilled Josh you understand I have actually got lots of financial investments in lots of companies I’m a significant advocate for entrepreneurship in America and make lots of numerous financial investments in entrepreneurs of which many suffered through the pandemic when I initially heard about this I called BS I do not think it due to the fact that I use 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 sensibly to stay alive throughout the pandemic so when I heard about this I stated nah it can’t be true however when I dug around I even contacted us to my politician good friends Governor Senators they didn’t learn about it I mean that’s how you understand that’s how misinformation is that there’s no details out there then a bunch of people informed me well you can’t get it since you took the PPP likewise not real so let’s ask Josh why does no one understand about the staff member retention credit you know what’s intriguing you’re speaking about the banks Kevin due to the fact that in the PPP loan procedure 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 big banks in our nation 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 chaos due to the fact that remember in the initial cares act you could refrain from doing both programs so if you had done PPP you might not do ERC in the initial program and when they altered 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 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 some of them are doing it as a payroll company your accounting professional no your accounting professional’s never ever done this prior to unless you have an account that entered into this organization and bottom line my firm Kevin has actually stayed in business since 2009 and we have actually been working with the federal government and the state federal government to recuperate money for Fortune 500 Fortune 1000 business so a lot of our huge big corporate clients have dealt with bottom line to recover other government programs we have actually done sales tax and utilize tax unemployment tax work opportunity tax credits research and development tax credits unclaimed property real estate 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 staff members on their payroll. The credit is 50% of approximately $10,000 in salaries paid by an.
employer whose business is fully or partially suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
1. The credit is offered to all companies despite size consisting of tax exempt organizations. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) little.
companies who take Small Business Loans.
2. To qualify, the company needs to fulfill one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s business is totally or partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the company’s gross receipts are listed below 50% of the similar quarter in 2019. As soon as the.
company’s gross invoices go above 80% of a comparable 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 is effective for earnings paid after March 13th and before December 31, 2020.
The definition of qualifying salaries varies by whether an employer had, typically, basically than.
100 workers in 2019.
Business that focus on ERC filing assistance usually offer expertise and assistance to assist organizations navigate the complex process of declaring the credit. They can provide numerous services, including:.
How is the employee retention credit calculated? New Business Employee Retention Credit
Eligibility Evaluation: These companies will examine your organization’s eligibility for the ERC based upon factors such as your industry, income, and operations. They can help identify if you fulfill the requirements for the credit and identify the optimum credit quantity you can declare.
Paperwork and Estimation: ERC filing services will help in collecting the essential documentation, such as payroll records and monetary statements, to support your claim. They will also assist determine the credit amount based upon qualified wages and other qualifying costs.
Retroactive Claim Review: If you are eligible to declare the ERC for prior quarters, these business can evaluate your previous payroll records and financials to identify possible opportunities for retroactive credits. They can help you amend previous income tax return to declare these refunds.
Filing Help: Business specializing in ERC filings will prepare and send the needed types and paperwork in your place. This consists of finishing Kind 941 or any other necessary tax forms.
Compliance and Updates: ERC regulations and guidance have actually progressed in time. These business remain updated with the most recent modifications and make sure that your filings abide by the most existing standards. They can likewise supply continuous support if the internal revenue service demands extra details or performs an audit related to your ERC claim.
It’s important to research and vet any business using ERC filing support to ensure their reliability and expertise. Try to find established firms with experience in tax and payroll services, or consider connecting to trusted accounting firms or tax experts who use ERC filing support.
Remember that while these companies can offer valuable assistance, it’s constantly a good idea to have a basic understanding of the ERC requirements and procedure yourself. This will help you make notified choices and guarantee accurate filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief procedures. The objective of the ERC is to encourage companies to maintain and pay their workers throughout the pandemic, even if their operations have been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to qualified employers, including for-profit companies, tax-exempt organizations, and particular governmental entities. To certify, companies should fulfill one of two criteria:.
The business operations were completely or partially suspended due to a federal government order related to COVID-19.
Business experienced a considerable decline in gross receipts. As mentioned earlier, for 2021, a substantial decrease is defined as a 20% decline in gross invoices 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 invoices 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 portion (up to 70%) of qualified wages paid to staff members, consisting of certain health plan expenditures. 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: At first, companies that got an Income Security Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 enables organizations to declare the ERC even if they got a PPP loan. The exact same earnings can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and boosted, permitting eligible companies to claim the credit for qualified wages paid as far back as March 13, 2020. This retroactive arrangement supplies a chance for services to modify prior-year income tax return and get refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their work income tax return, normally Form 941. If the credit surpasses the quantity of work taxes owed, the excess can be refunded to the company.
It’s important to keep in mind that the ERC provisions and eligibility criteria have progressed in time. The best course of action is to talk to a tax expert or visit the main internal revenue service website for the most in-depth and up-to-date information regarding the ERC, including any current legal modifications or updates.
To get approved for the ERC, a business should satisfy among the following requirements:.
Business operations were completely or partially suspended due to a federal government order related to COVID-19.
Business experienced a considerable decline in gross receipts. For 2021, a considerable 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% decline in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
The ERC is offered to services of all sizes, consisting of tax-exempt organizations, however there are some exceptions. For example, government entities and services that got a PPP loan might have limitations on declaring the credit.
The process for claiming the ERC includes finishing the necessary forms and including the credit on your employment income tax return (generally Kind 941). The exact time it requires to process the credit can vary based on several aspects, consisting of the intricacy of your company and the workload of the IRS. It’s suggested to consult with a tax expert for assistance particular to your situation.
There are several business that can help with the process of declaring the ERC. Some well-known business that use support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the details provided here is based on general understanding and might not reflect the most recent updates or modifications to the ERC. It’s important to talk to a tax expert or check out the main internal revenue service website for the most precise and up-to-date information concerning eligibility, declaring procedures, and available support.
Less than 100. If the employer had 100 or fewer staff members on average in 2019, then the credit is based.
on wages paid to all employees whether they actually worked or not. To put it simply, 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.
permitted just for wages paid to workers who did not work throughout the calendar quarter.
In both cases, “salaries” consists of not simply cash payments but also a part of the expense of employer.
provided health care. New Business Employee Retention Credit
Employers can be immediately compensated for the credit by reducing the quantity of payroll taxes they.