Lets talk first about Smart Employee Retention Credit :
Our team here what do these men doing everyone in this room is helping teach people about ERC and uh always supply a gorgeous breakfast and have individuals actually find out about the program we should head to the space where we have the ability to show some of the checks that we are getting for business and I wish to see that what is this this is uh numerous countless dollars literally Kevin numerous millions of dollars so these are replicate copies of the letters that go to customers validating that the check is on the way I imply you understand if you simply start 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 indicate it’s simply I mean consider the number of actual 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 client 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 which’s when they pay so they do not pay anything until they really get the cash they do not pay bottom line Wonder trust anything up until this letter is validated the check is on the way they transfer it into their bank account and they can really trust Wonder trust that the procedure has been finished and how many you think you’ve processed considering that you began this we’re about 35 000 of these for
about six billion dollars wow so clearly they understand what they’re doing and that’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 Wonderful here you’re at my YouTube channel we’re speaking about something truly essential today the staff member retention credit which most of you have never heard of I certainly had not become aware of it till really just recently and found out a lot about it due to the fact that this is probably the lowest expense of capital for any small business anywhere
anytime if you have employees between 5 and five hundred so I’ve got the expert with me this is Josh Fox he’s the founder and CEO of bottom line Concepts they’re the biggest processor of these ERC credits this is a 170 page program so it’s challenging this isn’t like PPP we just call your bank manager and say give me a loan it does not work there’s not a loan it’s an application and Josh is going to inform all of us about it and how to get it and why I have actually become yes the Ambassador and paid representative for this I like this program it’s disappearing very soon you got to learn everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just begin there so throughout the Trump Administration when President Trump was enacted they created 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 practically everybody it makes a huge difference 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 fine go on sorry I just need to ensure we got that point I mean that’s a big distinction a loan versus cash money I like cash cash that’s what we’re discussing all right 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 stunning tough check in the mail where you get actual money from the IRS all right so let’s speak about how it works because it seems like to me if it’s a if it’s worker retention credit that individual needed to be a staff member so I’m going to make the Assumption this money 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 service but it’s based upon you having W-2 staff members in America not 10.99. As long as you had W-2 staff members 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 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 2 3 and four of 2020 and you had quarters one two and three of 2021. alright so that’s how it’s measured you have to be on the W-2 during that duration now let’s talk my preferred part money 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 precise Kevin is 50 of the staff member’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 income to an optimum of 7 thousand per quarter how did that take place um they just changed the rules in.
2021 versus because the chaos 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 5 thousand Max and after that what takes place 21 000 Max in 2021 oh that’s how you create 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 lot of cash it is now there’s a caveat here the PPP money would need to be lowered from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would reduce the 26 000 so what we’re seeing typically Kevin is if you took PPP cash somewhere around ten thousand dollars an individual so let’s state 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 IRS so it’s huge clearly now the huge concern is why does no one learn about this due to the fact that appearance when I initially found out about this when I initially satisfied Josh you understand I’ve got lots of financial investments in great deals of business I’m a significant supporter for entrepreneurship in America and make many numerous investments in business owners of which lots of suffered through the pandemic when I initially became aware of this I called BS I do not think it because I utilize the PPP we went through the money center Banks to get it it was really easy to do we had our CEOs call the banks they got their loans and that were well been worthy of and we utilized them sensibly to survive throughout the pandemic so when I found out about this I said nah it can’t be true but when I dug around I even contacted us to my political leader buddies Governor Senators they didn’t understand about it I imply that’s how you understand that’s how false information is that there’s no details out there then a bunch of people told me well you can’t get it since you took the PPP likewise not true so let’s ask Josh why does nobody learn about the worker retention credit you understand what’s intriguing you’re speaking about the banks Kevin because in the PPP loan procedure the federal government made it extremely clear that if you wanted a PPP loan you would call Wells Fargo Citibank Bank of America any of the huge banks in our country and they would process process in Canada a pre-pp loan there’s no loans in Canada by the way it’s just procedure procedure that’s all um and here there was turmoil because keep in mind in the initial cares act you might not do both programs so if you had done PPP you might not do ERC in the original program and when they altered the law in 2021 the banks were refraining from 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 know how to do this not actually she or he’s never ever done it previously do the banks do it nope the banks don’t do it the payroll companies yeah a few 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 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 great deal of our huge huge business clients have worked with bottom line to recover other federal government programs we have actually done sales tax and use tax joblessness tax work chance tax credits research and development tax credits unclaimed home 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 workers on their payroll. The credit is 50% of up to $10,000 in incomes paid by an.
Because of COVID-19 or whose gross invoices, employer whose service is totally or partly suspended.
decrease by more than 50%.
1. The credit is readily available to all employers no matter size consisting of tax exempt organizations. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
companies who take Small Business Loans.
2. To qualify, the employer needs to fulfill one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s service is completely or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross invoices are below 50% of the equivalent quarter in 2019. As soon as the.
company’s gross invoices exceed 80% of a comparable quarter in 2019 they no longer certify.
after completion of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the qualifying incomes paid up to $10,000 in total.
It works for earnings paid after March 13th and before December 31, 2020.
The meaning of certifying salaries differs by whether an employer had, usually, more or less than.
100 staff members in 2019.
Business that specialize in ERC filing help normally supply know-how and assistance to help businesses browse the complex procedure of declaring the credit. They can provide numerous services, including:.
How is the employee retention credit calculated? Smart Employee Retention Credit
Eligibility Evaluation: These business will examine your organization’s eligibility for the ERC based upon aspects such as your industry, revenue, and operations. If you meet the requirements for the credit and identify the optimum credit quantity you can declare, they can help identify.
Paperwork and Computation: ERC filing services will help in gathering the necessary documentation, such as payroll records and financial declarations, to support your claim. They will also assist determine the credit quantity based on eligible earnings and other certifying expenditures.
Retroactive Claim Evaluation: If you are eligible to claim the ERC for previous quarters, these companies can examine your past payroll records and financials to identify possible opportunities for retroactive credits. They can help you amend previous tax returns to claim these refunds.
Filing Support: Companies specializing in ERC filings will prepare and submit the required kinds and documentation on your behalf. This includes completing Kind 941 or any other necessary tax return.
Compliance and Updates: ERC regulations and assistance have actually evolved with time. These business stay upgraded with the current changes and make sure that your filings abide by the most present guidelines. They can likewise provide continuous assistance if the internal revenue service demands extra details or conducts an audit related to your ERC claim.
It is very important to research study and veterinarian any company providing ERC filing help to guarantee their trustworthiness and proficiency. Try to find established firms with experience in tax and payroll services, or consider reaching out to trusted accounting companies or tax specialists who provide ERC submitting support.
Bear in mind that while these business can offer valuable assistance, it’s always a good concept to have a basic understanding of the ERC requirements and procedure yourself. This will assist you make informed choices and make sure precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief steps. The objective of the ERC is to encourage companies to retain and pay their workers throughout the pandemic, even if their operations have actually been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to qualified companies, including for-profit companies, tax-exempt companies, and particular governmental entities. To certify, employers need to fulfill one of two requirements:.
The business operations were fully or partially suspended due to a federal government order related to COVID-19.
The business experienced a significant decline in gross invoices. As discussed earlier, for 2021, a significant decline is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a substantial decrease is defined 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 right away preceding quarter.
Credit Amount: 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 (approximately 70%) of qualified salaries paid to workers, including certain 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: Initially, companies that got a Paycheck Protection Program (PPP) loan were not eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 enables services to declare the ERC even if they received a PPP loan. Nevertheless, the same salaries can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and enhanced, enabling eligible employers to claim the credit for certified salaries paid as far back as March 13, 2020. This retroactive provision supplies a chance for services to change prior-year income tax return and get refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their employment tax returns, usually Type 941. The excess can be refunded to the employer if the credit surpasses the amount of work taxes owed.
It is necessary to note that the ERC arrangements and eligibility criteria have progressed with time. The best course of action is to seek advice from a tax professional or go to the official internal revenue service site for the most updated and comprehensive details relating to the ERC, consisting of any current legislative changes or updates.
To get approved for the ERC, a service needs to satisfy among the following criteria:.
The business operations were totally or partly suspended due to a government order related to COVID-19.
Business experienced a significant decline in gross receipts. For 2021, a significant decrease is defined as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a considerable 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 instantly preceding quarter.
The ERC is readily available to organizations of all sizes, consisting of tax-exempt companies, however there are some exceptions. Federal government entities and companies that got a PPP loan may have limitations on declaring the credit.
The process for declaring the ERC includes completing the required kinds and consisting of the credit on your work income tax return (generally Type 941). The exact time it takes to process the credit can differ based upon numerous elements, including the complexity of your service and the work of the internal revenue service. It’s recommended to consult with a tax professional for assistance particular to your circumstance.
There are a number of companies that can aid with the procedure of claiming the ERC. These include accounting firms, tax advisory services, and payroll service providers. Some popular companies that provide support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research and call these business straight to inquire about their services and fees.
Please note that the information provided here is based upon general knowledge and might not show the most current updates or changes to the ERC. It is essential to talk to a tax expert or check out the main internal revenue service website for the most accurate and current information concerning eligibility, claiming treatments, and offered help.
Less than 100. If the employer had 100 or fewer employees typically in 2019, then the credit is based.
on earnings paid to all workers whether they actually worked or not. Simply put, even if the.
staff members worked full time and earned money for full time work, the employer still gets the credit.
Greater than 100. If the company had more than 100 employees on average in 2019, then the credit is.
enabled only for earnings paid to employees who did not work during the calendar quarter.
In both cases, “incomes” includes not just cash payments however also a portion of the expense of company.
supplied health care. Smart Employee Retention Credit
Employers can be immediately reimbursed for the credit by minimizing the amount of payroll taxes they.