Lets talk first about Start Up Employee Retention Credit :
Our team here what do these men doing everybody in this room is assisting teach individuals about ERC and uh always provide a gorgeous breakfast and have individuals really learn more about the program we should head to the space where we are able to display 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 countless dollars literally Kevin hundreds of countless dollars so these are duplicate copies of the letters that go to clients confirming that the check is on the way I mean you understand if you simply 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 just I mean consider 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 IRS heading to the consumer so that’s how you’re able to track it you know when you
get this you understand the check is gone for sure and that’s when they pay so they do not pay anything till they really get the cash they do not pay bottom line Wonder trust anything till this letter is verified the check is on the method they deposit it into their checking account and they can genuinely rely on Wonder trust that the process has actually been completed and how many you think you have actually processed given that you started this we have to do with 35 000 of these for
about 6 billion dollars wow so clearly they understand what they’re doing and that’s what you require 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 talking about something really crucial today the worker retention credit which the majority of you have actually never ever heard of I definitely had not become aware of it up until very just recently and learned a lot about it since this is probably the lowest expense of capital for any small business anywhere
anytime if you have employees in between 5 and five hundred so I’ve got the professional with me this is Josh Fox he’s the founder 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 give me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to inform 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 love this program it’s disappearing soon you got to discover everything about it let’s talk worker retention credit Josh Fox what is an ERC let’s just start there so throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act provided businesses three chances 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 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
remedy the cash cash payroll tax refund okay go on sorry I just need to make certain we got that point I suggest that’s a huge distinction a loan versus cash cash I like cash money 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 lovely hard check in the mail where you get real cash from the IRS all right so let’s speak about how it works since it seems 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 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 actually owned a company but it’s based upon you having W-2 workers 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 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 correct so there were 6 quarters the program was open well walk us through the 6 quarters so you had quarters two 3 and 4 of 2020 and you had quarters one 2 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 money how much can you get back per worker that was on a W-2 in those 6 quarters so the computation in 2020 to be specific Kevin is 50 of the staff member’s income to an optimum of 5 thousand dollars per staff member 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 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 approximately 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 six thousand dollars per worker that is because that’s a lot of cash it is now there’s a caution here the PPP money would have to be reduced from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would lower the 26 000 so what we’re seeing on average Kevin is if you took PPP cash someplace around ten thousand dollars a person so let’s state 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 internal revenue service so it’s substantial clearly now the huge question is why does no one learn about this due to the fact that look when I initially became aware of this when I first met Josh you understand I’ve got lots of investments in lots of business I’m a major advocate for entrepreneurship in America and make lots of many financial investments in business owners of which many suffered through the pandemic when I first heard about this I called BS I don’t think it since I utilize 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 used them sensibly to stay alive throughout the pandemic so when I found out about this I stated nah it can’t be true however when I dug around I even called to my politician pals Guv Senators they didn’t understand about it I indicate that’s how you understand that’s how misinformation is that there’s no info out there then a bunch of people 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 learn about the employee retention credit you understand what’s interesting you’re talking about the banks Kevin because in the PPP loan procedure the federal government made it really clear that if you wanted 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 just process procedure that’s all um and here there was turmoil because keep in mind in the initial cares act you could not do both programs so if you had done PPP you could refrain from doing ERC in the original program and when they changed the law in 2021 the banks were refraining from doing ERC since 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 actually 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 some of them are doing it as a payroll business your accounting professional no your accountant’s never ever done this prior to unless you have an account that went into this organization and bottom line my firm Kevin has stayed in business because 2009 and we’ve been working with the federal government and the state federal government to recover cash for Fortune 500 Fortune 1000 business so a great deal of our huge huge business customers have worked with bottom line to recuperate other government programs we have actually done sales tax and utilize tax unemployment tax work chance tax credits research and development tax credits unclaimed home property tax all of these other federal government programs.
The worker retention tax credit is a broad based refundable tax credit developed to encourage.
companies to keep staff members on their payroll. The credit is 50% of as much as $10,000 in earnings paid by an.
Since of COVID-19 or whose gross receipts, employer whose business is completely or partly suspended.
decline by more than 50%.
1. The credit is available to all employers no matter size including tax exempt organizations. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) little.
organizations who take Small Business Loans.
2. To certify, the employer needs to satisfy one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s service is fully or partially suspended by government order due to COVID-19.
throughout 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 similar 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 wages paid up to $10,000 in overall.
It works for wages paid after March 13th and prior to December 31, 2020.
The meaning of qualifying earnings differs by whether an employer had, typically, basically than.
100 employees in 2019.
Companies that focus on ERC filing help typically supply proficiency and assistance to help companies browse the complicated process of claiming the credit. They can use different services, consisting of:.
How is the employee retention credit calculated? Start Up Employee Retention Credit
Eligibility Evaluation: These business will examine your business’s eligibility for the ERC based upon aspects such as your market, revenue, and operations. If you meet the requirements for the credit and determine the maximum credit quantity you can declare, they can help determine.
Documents and Estimation: ERC filing services will help in gathering the necessary documentation, such as payroll records and financial declarations, to support your claim. They will likewise help calculate the credit amount based upon eligible incomes and other qualifying expenditures.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for previous quarters, these companies can evaluate your past payroll records and financials to identify potential chances for retroactive credits. They can help you modify previous income tax return to declare these refunds.
Filing Help: Companies focusing on ERC filings will prepare and send the needed forms and documentation on your behalf. This consists of finishing Form 941 or any other necessary tax return.
Compliance and Updates: ERC policies and guidance have actually developed in time. These business stay upgraded with the most recent modifications and ensure that your filings abide by the most existing standards. They can likewise supply ongoing assistance if the IRS demands additional info or carries out an audit related to your ERC claim.
It’s important to research study and veterinarian any business offering ERC filing help to guarantee their trustworthiness and know-how. Try to find established firms with experience in tax and payroll services, or think about reaching out to relied on accounting companies or tax experts who offer ERC submitting support.
Bear in mind that while these companies can supply valuable help, it’s constantly an excellent concept to have a fundamental understanding of the ERC requirements and process yourself. This will assist you make notified decisions and ensure accurate 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 objective of the ERC is to encourage services to maintain and pay their workers during the pandemic, even if their operations have actually been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is available to eligible companies, consisting of for-profit services, tax-exempt companies, and particular governmental entities. To certify, companies need to satisfy one of two requirements:.
The business operations were totally or partly suspended due to a federal government order related to COVID-19.
Business experienced a substantial decline in gross receipts. As discussed earlier, for 2021, a substantial decrease is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decrease 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 quantity amounts to a percentage (approximately 70%) of qualified earnings paid to workers, consisting of specific health insurance costs. 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 an Income Security Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 allows organizations to declare the ERC even if they got a PPP loan. The exact same earnings can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has 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 arrangement offers a chance for businesses to amend prior-year tax returns and receive refunds.
Claiming the Credit: Companies can declare the ERC by reporting it on their employment tax returns, generally Type 941. The excess can be refunded to the company if the credit exceeds the quantity of employment taxes owed.
It’s important to keep in mind that the ERC provisions and eligibility criteria have evolved gradually. The best course of action is to speak with a tax professional or check out the official internal revenue service site for the most in-depth and updated info concerning the ERC, including any recent legal modifications or updates.
To receive the ERC, an organization should satisfy one of the following requirements:.
The business operations were completely or partially suspended due to a government order related to COVID-19.
The business experienced a considerable decrease in gross receipts. For 2021, a significant decrease is defined as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
The ERC is available to services of all sizes, including tax-exempt organizations, but there are some exceptions. For instance, government entities and businesses that received a PPP loan might have constraints on declaring the credit.
The procedure for declaring the ERC includes completing the necessary kinds and consisting of the credit on your employment income tax return (normally Form 941). The exact time it takes to process the credit can vary based upon several aspects, including the complexity of your service and the work of the IRS. It’s recommended to consult with a tax expert for assistance specific to your situation.
There are numerous business that can help with the procedure of declaring the ERC. Some popular companies that provide help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the details offered here is based upon general understanding and might not reflect the most current updates or modifications to the ERC. It is essential to speak with a tax professional or go to the official internal revenue service site for the most accurate and current info concerning eligibility, claiming treatments, and readily available help.
Less than 100. The credit is based if the employer had 100 or less staff members on average in 2019.
on earnings paid to all employees whether they actually worked or not. In other words, even if the.
employees worked full time and earned money for full-time work, the employer still gets the credit.
Greater than 100. If the employer had more than 100 workers usually in 2019, then the credit is.
permitted only for wages paid to employees who did not work throughout the calendar quarter.
In both cases, “earnings” includes not just cash payments however likewise a part of the cost of employer.
offered healthcare. Start Up Employee Retention Credit
Employers can be immediately repaid for the credit by reducing the quantity of payroll taxes they.