Lets talk first about Revenue Decline For Employee Retention Credit :
Our team here what do these guys doing everybody in this space is helping teach people about ERC and uh always provide a beautiful breakfast and have individuals truly learn about the program we should head to the room where we have the ability to show a few of the checks that we are getting for companies and I want to see that what is this this is uh numerous countless dollars actually Kevin numerous millions of dollars so these are replicate copies of the letters that go to customers confirming that the check is on the way I indicate you know if you simply begin to look at a few of these here I suggest this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I mean it’s simply I imply think of the number of real customers that went through the program yeah this is the very end this is the party at the end when the check is validated the numbers are confirmed and the check is on the mail in the mail from the internal revenue service heading to the consumer so that’s how you’re able to track it you know when you
receive this you know the check is gone for sure which’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 validated the check is on the way they transfer it into their checking account and they can really trust Wonder trust that the procedure has actually been finished and how many you believe you’ve processed because you began this we’re about 35 000 of these for
about 6 billion dollars wow so plainly they know what they’re doing which’s what you require you need 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 Wonderful here you’re at my YouTube channel we’re speaking about something truly crucial today the staff member retention credit which most of you have never ever heard of I certainly hadn’t heard of it until extremely just recently and discovered a lot about it since this is most likely the most affordable expense of capital for any small company anywhere
anytime if you have staff members in between 5 and five hundred so I’ve got the specialist with me this is Josh Fox he’s the creator and CEO of bottom line Principles 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 phone 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 tell us all about it and how to get it and why I have actually ended up being yes the Ambassador and paid representative for this I enjoy this program it’s going away soon you got to learn everything about it let’s talk worker retention credit Josh Fox what is an ERC let’s just begin there so during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act provided organizations three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone it makes a big distinction right there 2 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 all right go on sorry I simply have to ensure we got that point I indicate that’s a huge distinction a loan versus money cash 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 initial cares Act is the ERC and yes Kevin it is a gorgeous 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 sounds like to me if it’s a if it’s worker retention credit that individual had 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 shareholders it’s for workers right you needed to have owned a business however 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 qualified 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 correct so there were six quarters the program was open well stroll us through the six quarters so you had quarters two 3 and four of 2020 and you had quarters one 2 and three of 2021. all right so that’s how it’s determined you need to be on the W-2 during that period now let’s talk my preferred part money how much can you return per employee that was on a W-2 in those 6 quarters so the calculation in 2020 to be precise Kevin is 50 of the employee’s income to a maximum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers increased to 70 of the worker’s wage 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 employees 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 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 staff member that is because that’s a lot of money it is now there’s a caution here the PPP money would need to be minimized from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would minimize the 26 000 so what we’re seeing typically Kevin is if you took PPP cash somewhere around ten 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 huge obviously now the huge concern is why does nobody learn about this due to the fact that look when I first found out about this when I initially met Josh you know I’ve got great deals of financial investments in great deals of business I’m a major supporter for entrepreneurship in America and make numerous numerous investments in business owners of which lots of suffered through the pandemic when I initially became aware of this I called BS I don’t think it due to the fact that 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 wisely to survive during 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 politician pals Guv Senators they didn’t understand about it I imply that’s how you know that’s how false information is that there’s no details out there then a lot of individuals told me well you can’t get it due to the fact that you took the PPP likewise not true so let’s ask Josh why does nobody learn about the employee retention credit you understand what’s intriguing you’re talking about 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 procedure process that’s all um and here there was turmoil due to the fact that keep in mind in the initial cares act you could refrain from doing both programs so if you had actually done PPP you might refrain from doing ERC in the original program and when they altered 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 ever 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 ever done it before do the banks do it nope the banks do not do it the payroll companies yeah a few of them are doing it as a payroll business your accounting professional no your accounting professional’s never done this before unless you have an account that entered into this company and bottom line my firm Kevin has actually stayed in business since 2009 and we’ve been dealing with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 companies so a lot of our big huge business clients have dealt with bottom line to recuperate other government programs we’ve 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 employee retention tax credit is a broad based refundable tax credit developed to encourage.
companies to keep employees on their payroll. The credit is 50% of up to $10,000 in earnings paid by an.
Since of COVID-19 or whose gross invoices, company whose organization is totally or partly suspended.
decline by more than 50%.
1. The credit is readily available to all companies despite size including tax exempt companies. There are.
just 2 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 meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s organization is completely or partially suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross receipts are below 50% of the equivalent quarter in 2019. As soon as the.
employer’s gross invoices exceed 80% of a comparable quarter in 2019 they no longer qualify.
after completion of that quarter.
Computation of the Credit.
The quantity of the credit is 50% of the qualifying earnings paid up to $10,000 in total.
It works for incomes paid after March 13th and prior to December 31, 2020.
The meaning of certifying salaries differs by whether an employer had, usually, basically than.
100 staff members in 2019.
Business that concentrate on ERC filing support typically provide proficiency and assistance to assist businesses navigate the complex procedure of claiming the credit. They can offer different services, including:.
How is the employee retention credit calculated? Revenue Decline For Employee Retention Credit
Eligibility Evaluation: These companies will examine your business’s eligibility for the ERC based on aspects such as your market, earnings, and operations. If you meet the requirements for the credit and recognize the maximum credit quantity you can declare, they can help determine.
Documentation and Estimation: ERC filing services will help in collecting the essential documentation, such as payroll records and financial declarations, to support your claim. They will likewise assist determine the credit amount based on eligible wages and other qualifying expenditures.
Retroactive Claim Review: If you are eligible to claim the ERC for previous quarters, these companies can review your previous payroll records and financials to recognize prospective chances for retroactive credits. They can assist you modify prior income tax return to claim these refunds.
Filing Help: Business specializing in ERC filings will prepare and send the needed types and paperwork on your behalf. This consists of completing Form 941 or any other required tax forms.
Compliance and Updates: ERC guidelines and assistance have actually developed with time. These business remain upgraded with the current changes and ensure that your filings comply with the most existing guidelines. They can also offer ongoing assistance if the IRS demands additional details or performs an audit related to your ERC claim.
It is necessary to research study and vet any company using ERC filing assistance to ensure their reliability and knowledge. Look for established companies with experience in tax and payroll services, or think about connecting to relied on accounting companies or tax professionals who provide ERC submitting assistance.
Remember that while these business can supply valuable help, it’s constantly a good concept to have a standard understanding of the ERC requirements and process yourself. This will assist you make notified decisions and make sure accurate 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 goal of the ERC is to motivate companies to maintain and pay their workers throughout the pandemic, even if their operations have actually been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to eligible employers, consisting of for-profit services, tax-exempt organizations, and specific governmental entities. To qualify, employers must meet one of two requirements:.
Business operations were totally or partially suspended due to a government order related to COVID-19.
Business experienced a significant decrease in gross receipts. As mentioned earlier, for 2021, a significant decrease 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 specified as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity amounts to a percentage (approximately 70%) of qualified earnings paid to workers, including particular health plan expenses. The optimum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, services that got a Paycheck Protection Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 allows companies to claim the ERC even if they received a PPP loan. The exact same wages can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and boosted, enabling qualified companies to declare the credit for certified wages paid as far back as March 13, 2020. This retroactive arrangement supplies an opportunity for services to amend prior-year income tax return and receive refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their work income tax return, usually Type 941. If the credit surpasses the amount of work taxes owed, the excess can be refunded to the employer.
It’s important to keep in mind that the ERC arrangements and eligibility requirements have evolved in time. The very best strategy is to speak with a tax expert or visit the main IRS site for the most updated and in-depth information relating to the ERC, consisting of any current legal modifications or updates.
To qualify for the ERC, a company should satisfy one of the following requirements:.
The business operations were totally or partially suspended due to a government order related to COVID-19.
Business experienced a significant decrease in gross receipts. For 2021, a substantial decrease is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decline in gross invoices compared to the instantly preceding quarter.
The ERC is available to services of all sizes, consisting of tax-exempt companies, but there are some exceptions. For instance, federal government entities and businesses that received a PPP loan might have limitations on claiming the credit.
The procedure for declaring the ERC includes completing the required types and including the credit on your employment tax return (generally Type 941). The exact time it requires to process the credit can differ based on a number of elements, including the complexity of your organization and the workload of the IRS. It’s advised to seek advice from a tax professional for guidance particular to your scenario.
There are numerous business that can assist with the procedure of declaring the ERC. Some widely known business that use assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the details offered here is based upon general knowledge and might not reflect the most recent updates or modifications to the ERC. It is very important to seek advice from a tax expert or go to the official IRS website for the most current and accurate information regarding eligibility, claiming treatments, and available support.
Less than 100. The credit is based if the employer had 100 or fewer staff members on average in 2019.
on salaries paid to all staff members whether they actually worked or not. To put it simply, even if the.
workers worked full-time and earned money for full time work, the employer still gets the credit.
Greater than 100. The credit is if the company had more than 100 employees on average in 2019.
permitted only for wages paid to staff members who did not work throughout the calendar quarter.
In both cases, “incomes” includes not just money payments but likewise a portion of the cost of company.
provided health care. Revenue Decline For Employee Retention Credit
Companies can be right away reimbursed for the credit by decreasing the quantity of payroll taxes they.