Lets talk first about Related Party Employee Retention Credit :
Our team here what do these guys doing everyone in this room is helping teach individuals about ERC and uh constantly supply a stunning breakfast and have individuals really learn about the program we should head to the room where we are able to display 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 numerous millions of dollars so these are replicate copies of the letters that go to clients confirming that the check is on the way I suggest you understand if you simply start to look at a few of these here I indicate this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I mean it’s simply 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 confirmed the numbers are verified and the check is on the mail in the mail from the IRS heading to the consumer so that’s how you have the ability to track it you understand when you
receive this you understand the check is gone for sure and that’s when they pay so they do not pay anything until they really get the money they don’t pay bottom line Wonder trust anything up until this letter is confirmed the check is on the way they transfer it into their checking account and they can genuinely trust Wonder trust that the procedure has been finished and how many you think you’ve processed since 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 require specialists 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 Wonderful here you’re at my YouTube channel we’re discussing something really essential today the worker retention credit which most of you have never ever become aware of I certainly had not become aware of it up until extremely just recently and discovered a lot about it since this is probably the most affordable expense of capital for any small business anywhere
anytime if you have workers between five and five hundred so I’ve got the professional with me this is Josh Fox he’s the creator and CEO of bottom line Concepts they’re the biggest processor of these ERC credits this is a 170 page program so it’s not easy this isn’t like PPP we simply call your bank supervisor and state offer 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’ve ended up being yes the Ambassador and paid representative for this I like this program it’s going away soon you got to learn all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just begin there so during the Trump Administration when President Trump was enacted they created the cares Act and the cares act provided businesses three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everybody 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 money payroll tax refund okay go on sorry I just need to make certain we got that point I imply that’s a big distinction a loan versus cash 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 difficult check in the mail where you get actual cash 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 individual needed to be a staff member so I’m going to make the Assumption this cash is not for the owner not for individuals on the cap table not for investors it’s for employees right you had to have owned a business but it’s based on you having W-2 staff members in America not 10.99. As long as you had W-2 employees 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 6 months of 2021 on the W-2 right so there were 6 quarters the program was open well stroll 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. fine so that’s how it’s measured you need to be on the W-2 throughout that period now let’s talk my preferred part money just how much can you get back per worker that was on a W-2 in those 6 quarters so the estimation in 2020 to be specific Kevin is 50 of the worker’s wage to an optimum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s salary to an optimum of 7 thousand per quarter how did that take place um they just altered the rules in.
2021 versus due to the fact that the mayhem of the pandemic so they wanted 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 up to five thousand Max and after that what occurs 21 000 Max in 2021 oh that’s how you create twenty 6 thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty 6 thousand dollars per worker that is because that’s a great deal of money it is now there’s a caution here the PPP cash would need to be reduced from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would minimize the 26 000 so what we’re seeing usually Kevin is if you took PPP cash someplace around ten thousand dollars a person so let’s say hypothetically you owned a dining establishment in New York City where I’m from and you had a hundred workers and you took PPP cash you would still get a million dollar in the mail from the IRS so it’s substantial certainly now the big question is why does no one learn about this due to the fact that look when I initially heard about this when I first satisfied Josh you know I’ve got lots of financial investments in great deals of business I’m a significant advocate for entrepreneurship in America and make many numerous investments in business owners of which numerous suffered through the pandemic when I initially became aware of this I called BS I do not think it since I use 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 which were well been worthy of and we used them carefully to survive throughout the pandemic so when I found out about this I said 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 know that’s how misinformation is that there’s no info out there then a bunch of individuals informed me well you can’t get it because you took the PPP also not real so let’s ask Josh why does no one know about the worker retention credit you know what’s interesting 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 huge 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 simply process procedure that’s all um and here there was mayhem because keep in mind in the initial cares act you could refrain from doing both programs so if you had done PPP you might refrain from doing ERC in the original program and when they altered the law in 2021 the banks were refraining from doing ERC due to the fact that it’s not alone so you’re getting a tax refund so the government never made it clear to anybody about how to.
do this does your CFO understand how to do this not really he or she’s never done it in the past 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 accountant’s never done this prior to unless you have an account that entered into this company and bottom line my company Kevin has actually been in business given that 2009 and we have actually been working with the federal government and the state federal government to recuperate money for Fortune 500 Fortune 1000 companies so a great deal of our big huge business clients have dealt with bottom line to recuperate other government programs we’ve done sales tax and use tax unemployment tax work chance tax credits research and development tax credits unclaimed home real estate tax all of these other federal government programs.
The worker retention tax credit is a broad based refundable tax credit created to motivate.
employers to keep workers on their payroll. The credit is 50% of up to $10,000 in wages paid by an.
Due to the fact that of COVID-19 or whose gross invoices, employer whose company is completely or partly suspended.
decline by more than 50%.
Schedule.
1. The credit is offered to all companies no matter size including tax exempt companies. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) little.
businesses who take Small company Loans.
2. To certify, the company has to satisfy one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s organization is totally or partially suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross invoices are below 50% of the comparable quarter in 2019. When the.
employer’s gross invoices go above 80% of an equivalent quarter in 2019 they no longer certify.
after completion of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the certifying salaries paid up to $10,000 in overall.
It is effective for wages paid after March 13th and prior to December 31, 2020.
The meaning of certifying salaries varies by whether an employer had, usually, basically than.
100 employees in 2019.
Business that concentrate on ERC filing assistance usually offer expertise and assistance to help businesses navigate the complex procedure of declaring the credit. They can use various services, including:.
How is the employee retention credit calculated? Related Party Employee Retention Credit
Eligibility Evaluation: These business will assess your organization’s eligibility for the ERC based upon elements such as your industry, income, and operations. They can assist identify if you satisfy the requirements for the credit and identify the maximum credit amount you can declare.
Documents and Calculation: ERC filing services will assist in collecting the necessary documentation, such as payroll records and financial declarations, to support your claim. They will also assist determine the credit amount based upon qualified earnings and other qualifying expenditures.
Retroactive Claim Review: If you are qualified to claim the ERC for previous quarters, these business can evaluate your past payroll records and financials to recognize possible opportunities for retroactive credits. They can help you modify previous tax returns to declare these refunds.
Filing Assistance: 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 required tax forms.
Compliance and Updates: ERC policies and assistance have progressed gradually. These business remain updated with the latest changes and ensure that your filings comply with the most present standards. They can likewise provide ongoing support if the IRS demands extra details or conducts an audit related to your ERC claim.
It is very important to research study and veterinarian any business using ERC filing help to guarantee their credibility and competence. Try to find recognized firms with experience in tax and payroll services, or consider connecting to relied on accounting companies or tax specialists who use ERC submitting assistance.
Bear in mind that while these companies can offer valuable help, it’s constantly a great concept to have a standard understanding of the ERC requirements and procedure yourself. This will help you make notified choices and ensure precise filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief procedures. The objective of the ERC is to encourage services to maintain and pay their employees throughout the pandemic, even if their operations have actually been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is available to eligible employers, including for-profit services, tax-exempt companies, and specific governmental entities. To certify, companies must fulfill one of two criteria:.
Business operations were completely or partially suspended due to a government order related to COVID-19.
The business experienced a substantial decline in gross receipts. As mentioned previously, for 2021, a considerable decline is specified as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a substantial decrease is specified as a 20% decrease in gross receipts 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 amount is equal to a portion (approximately 70%) of qualified earnings paid to workers, including particular health plan expenditures. 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, companies that got an Income Defense Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 enables organizations to declare the ERC even if they received a PPP loan. The exact same salaries can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively broadened and boosted, enabling qualified companies to claim the credit for certified salaries paid as far back as March 13, 2020. This retroactive provision supplies a chance for companies to amend prior-year tax returns and receive refunds.
Declaring the Credit: Employers can declare the ERC by reporting it on their employment tax returns, normally Form 941. If the credit goes beyond the quantity of work taxes owed, the excess can be reimbursed to the employer.
It is very important to keep in mind that the ERC arrangements and eligibility criteria have actually progressed with time. The best strategy is to speak with a tax expert or check out the official internal revenue service site for the most in-depth and up-to-date information relating to the ERC, consisting of any current legal modifications or updates.
To get approved for the ERC, a business should satisfy one of the following requirements:.
Business operations were completely or partly suspended due to a government order related to COVID-19.
The business experienced a significant decline in gross receipts. For 2021, a considerable decrease is defined as a 20% decrease 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 exact same quarter in 2019, or a 20% decline in gross invoices compared to the immediately preceding quarter.
The ERC is offered to companies of all sizes, consisting of tax-exempt organizations, but there are some exceptions. Federal government entities and businesses that received a PPP loan might have restrictions on declaring the credit.
The procedure for declaring the ERC involves finishing the required forms and consisting of the credit on your work tax return (typically Type 941). The exact time it requires to process the credit can vary based upon numerous factors, including the complexity of your business and the workload of the IRS. It’s suggested to seek advice from a tax expert for guidance particular to your scenario.
There are a number of business that can help with the procedure of declaring the ERC. These consist of accounting companies, tax advisory services, and payroll provider. Some popular companies that use help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research study and get in touch with these companies straight to inquire about their services and fees.
Please note that the info provided here is based on general knowledge and might not reflect the most recent updates or changes to the ERC. It is essential to consult with a tax professional or visit the official internal revenue service website for the most current and precise information relating to eligibility, declaring procedures, and readily available support.
Less than 100. The credit is based if the company had 100 or less workers on average in 2019.
on earnings paid to all workers whether they in fact worked or not. Simply put, even if the.
employees worked full time and got paid for full time work, the employer still gets the credit.
Greater than 100. The credit is if the employer had more than 100 workers on average in 2019.
enabled only for incomes paid to employees who did not work during the calendar quarter.
In both cases, “wages” consists of not just cash payments however also a portion of the expense of employer.
supplied healthcare. Related Party Employee Retention Credit
Payment.
Companies can be instantly compensated for the credit by lowering the amount of payroll taxes they.