Lets talk first about Startup Business Employee Retention Credit :
Our team here what do these guys doing everyone in this space is helping teach people about ERC and uh constantly offer a stunning breakfast and have individuals actually discover the program we should head to the room where we have the ability to display a few of the checks that we are getting for business and I wish to see that what is this this is uh hundreds of millions of dollars actually 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 know 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 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 verified the numbers are confirmed and the check is on the mail in the mail from the IRS heading to the client so that’s how you’re able to track it you understand when you
get this you know the check is gone for sure which’s when they pay so they do not pay anything up until they really get the money they do not pay bottom line Wonder trust anything until this letter is verified the check is on the way they transfer it into their checking account and they can really rely on Wonder trust that the process has been finished and how many you believe you have actually processed given that you began this we’re about 35 000 of these for
about six billion dollars wow so plainly they understand 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 important today the staff member retention credit which the majority of you have never become aware of I definitely hadn’t become aware of it up until extremely just recently and learned a lot about it since this is probably the most affordable cost of capital for any small company anywhere
anytime if you have workers between 5 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 largest 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 supervisor and say offer me a loan it doesn’t 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 ended up being yes the Ambassador and paid representative for this I love this program it’s disappearing very soon you got to discover everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply start there so throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act offered organizations 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone it makes a huge difference right there two 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 alright go on sorry I simply have to make sure we got that point I indicate that’s a big distinction a loan versus money money I like money cash that’s what we’re talking about 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 original cares Act is the ERC and yes Kevin it is a stunning difficult check in the mail where you get actual cash from the IRS all right so let’s speak about how it works due to the fact that it sounds like to me if it’s a if it’s staff member retention credit that person needed to be a worker 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 workers right you had to have actually owned a business however it’s based on you having W-2 workers in America not 10.99. so as long as you had W-2 workers 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 need to be on payroll for the very first 6 months of 2021 on the W-2 appropriate so there were six quarters the program was open well walk us through the six quarters so you had quarters 2 3 and 4 of 2020 and you had quarters one two and three of 2021. okay 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 just how much can you return per staff member that was on a W-2 in those six quarters so the estimation in 2020 to be precise Kevin is 50 of the staff member’s wage to an optimum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers escalated to 70 of the staff member’s wage to a maximum of seven thousand per quarter how did that occur um they simply altered the rules in.
2021 versus because 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 up to 5 thousand Max and then 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 staff member that is because that’s a great deal of cash it is now there’s a caution here the PPP cash would need to be decreased from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would lower the 26 000 so what we’re seeing usually Kevin is if you took PPP cash someplace around 10 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 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 certainly now the huge question is why does no one understand about this due to the fact that look when I initially became aware of this when I initially fulfilled Josh you understand I have actually got lots of financial investments in great deals of companies I’m a major advocate for entrepreneurship in America and make many lots of investments in business owners of which lots of suffered through the pandemic when I first heard about this I called BS I don’t think it since I use 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 been worthy of and we utilized them wisely to stay alive during the pandemic so when I heard about this I stated nah it can’t hold true but when I dug around I even called to my political leader pals Guv Senators they didn’t know about it I imply that’s how you know that’s how misinformation is that there’s no details out there then a lot of people informed me well you can’t get it since you took the PPP also not real so let’s ask Josh why does nobody understand about the staff member retention credit you know what’s fascinating 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 wanted 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 simply process procedure that’s all um and here there was turmoil because keep in mind in the original cares act you might not do both programs so if you had actually done PPP you could refrain from doing ERC in the initial program and when they changed 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 understand how to do this not truly she or he’s never ever done it previously do the banks do it nope the banks don’t do it the payroll business yeah some of them are doing it as a payroll company your accounting professional no your accountant’s never done this prior to unless you have an account that went into this company and bottom line my company Kevin has actually stayed in business because 2009 and we have actually been working with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 business so a lot of our huge big business customers have dealt with bottom line to recover other government programs we have actually done sales tax and use tax unemployment tax work chance tax credits research and development tax credits unclaimed home property tax all of these other government programs.
The staff member retention tax credit is a broad based refundable tax credit designed to encourage.
employers 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 receipts, company whose service is fully or partially suspended.
decrease by more than 50%.
1. The credit is readily available to all companies regardless of size consisting of tax exempt companies. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
businesses who take Small Business Loans.
2. To certify, the company has to satisfy one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s business is totally 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 similar quarter in 2019. Once the.
employer’s gross receipts exceed 80% of a similar quarter in 2019 they no longer certify.
after the end of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the qualifying earnings paid up to $10,000 in total.
It is effective for salaries paid after March 13th and prior to December 31, 2020.
The meaning of qualifying earnings differs by whether an employer had, on average, basically than.
100 workers in 2019.
Business that focus on ERC filing support usually offer expertise and assistance to assist organizations navigate the complicated process of declaring the credit. They can provide numerous services, including:.
How is the employee retention credit calculated? Startup Business Employee Retention Credit
Eligibility Evaluation: These companies will assess your service’s eligibility for the ERC based on elements such as your market, income, and operations. If you fulfill the requirements for the credit and determine the maximum credit amount you can declare, they can assist identify.
Paperwork and Calculation: ERC filing services will assist in collecting the essential documentation, such as payroll records and financial declarations, to support your claim. They will likewise help calculate the credit quantity based upon eligible wages and other certifying costs.
Retroactive Claim Review: If you are qualified to declare the ERC for previous quarters, these business can review your previous payroll records and financials to determine prospective opportunities for retroactive credits. They can help you change previous income tax return to declare these refunds.
Filing Support: Companies focusing on ERC filings will prepare and send the required kinds and documentation in your place. This includes finishing Kind 941 or any other necessary tax forms.
Compliance and Updates: ERC policies and assistance have actually evolved in time. These business stay updated with the current changes and guarantee that your filings adhere to the most existing guidelines. If the IRS requests extra information or performs an audit related to your ERC claim, they can likewise offer continuous support.
It is necessary to research study and veterinarian any business offering ERC filing support to ensure their reliability and knowledge. Search for recognized firms with experience in tax and payroll services, or think about connecting to trusted accounting companies or tax experts who offer ERC submitting support.
Keep in mind that while these business can offer valuable help, it’s constantly a good 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 Employee Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief procedures. The goal of the ERC is to encourage businesses to keep and pay their staff members during the pandemic, even if their operations have actually been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to qualified companies, consisting of for-profit organizations, tax-exempt companies, and certain governmental entities. To certify, companies should satisfy one of two requirements:.
Business operations were completely or partly suspended due to a government order related to COVID-19.
Business experienced a considerable decline in gross invoices. As mentioned earlier, for 2021, a substantial decline is specified as a 20% decline 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 very same quarter in 2019, or a 20% decrease in gross invoices compared to the right away 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 percentage (up to 70%) of certified earnings paid to staff members, including particular health insurance costs. The optimum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, businesses that received a Paycheck Defense Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 enables services 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 Arrangement: The ERC has actually been retroactively expanded and enhanced, allowing qualified employers to declare the credit for certified incomes paid as far back as March 13, 2020. This retroactive arrangement supplies an opportunity for services to change prior-year tax returns and get refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their work tax returns, usually Form 941. If the credit surpasses the quantity of work taxes owed, the excess can be reimbursed to the company.
It’s important to keep in mind that the ERC arrangements and eligibility criteria have developed in time. The best strategy is to talk to a tax expert or visit the official internal revenue service website for the most updated and in-depth information regarding the ERC, consisting of any current legislative changes or updates.
To qualify for the ERC, a business should satisfy one of the following criteria:.
Business operations were fully or partially suspended due to a government order related to COVID-19.
Business experienced a considerable decline in gross invoices. For 2021, a significant decrease is specified as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decrease in gross invoices compared to the right away preceding quarter.
The ERC is readily available to services of all sizes, including tax-exempt organizations, however there are some exceptions. For instance, government entities and organizations that received a PPP loan may have limitations on declaring the credit.
The procedure for declaring the ERC involves finishing the required types and consisting of the credit on your work income tax return (normally Type 941). The exact time it takes to process the credit can vary based on a number of factors, consisting of the intricacy of your organization and the work of the internal revenue service. It’s suggested to talk to a tax professional for assistance specific to your scenario.
There are several companies that can assist with the procedure of claiming the ERC. Some widely known business that use help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the information supplied here is based upon basic knowledge and might not reflect the most current updates or changes to the ERC. It is necessary to consult with a tax professional or visit the official internal revenue service site for the most current and precise details regarding eligibility, declaring procedures, and readily available support.
Less than 100. The credit is based if the employer had 100 or fewer employees on average in 2019.
on earnings paid to all employees whether they actually worked or not. To put it simply, even if the.
workers worked full time and made 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.
allowed only for earnings paid to workers who did not work throughout the calendar quarter.
In both cases, “salaries” consists of not simply money payments but likewise a part of the cost of employer.
supplied health care. Startup Business Employee Retention Credit
Companies can be immediately repaid for the credit by lowering the quantity of payroll taxes they.