Lets talk first about Status Of Employee Retention Credit :
Our group here what do these guys doing everyone in this space is assisting teach people about ERC and uh always provide 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 a few of the checks that we are getting for companies and I want to see that what is this this is uh numerous millions of dollars literally Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to clients validating that the check is on the way I indicate you understand if you just 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 mean it’s just I suggest 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 verified and the check is on the mail in the mail from the IRS heading to the customer so that’s how you have the ability to track it you know when you
receive this you know the check is chosen sure and that’s when they pay so they do not pay anything till they actually receive the money they do not pay bottom line Wonder trust anything until this letter is validated the check is on the way they transfer it into their savings account and they can genuinely rely on Wonder trust that the process has actually been completed and the number of you believe you have actually processed since you started this we have to do with 35 000 of these for
about six billion dollars wow so plainly they know what they’re doing which’s what you need you need professionals 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 Fantastic here you’re at my YouTube channel we’re discussing something really crucial today the staff member retention credit which the majority of you have actually never become aware of I definitely had not heard of it up until very recently and learned a lot about it due to the fact that this is most likely the lowest expense of capital for any small business anywhere
anytime if you have staff members between 5 and five hundred so I have actually got the specialist with me this is Josh Fox he’s the founder 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 simply call up your bank manager and state give me a loan it does not 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 become yes the Ambassador and paid spokesperson for this I like this program it’s disappearing very 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 throughout the Trump Administration when President Trump was enacted they developed the cares Act and the cares act used companies three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically 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 money money payroll tax refund alright go on sorry I simply need to make sure we got that point I mean that’s a big distinction a loan versus money money I like money money 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 original cares Act is the ERC and yes Kevin it is a lovely difficult check in the mail where you get real money from the internal revenue service all right so let’s talk about how it works due to the fact that it sounds like to me if it’s a if it’s worker retention credit that individual had to be an employee 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 staff members right you had to have actually owned an organization but it’s based upon you having W-2 workers in America not 10.99. As long as you had W-2 workers 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 six 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 three and 4 of 2020 and you had quarters one two and 3 of 2021. all right so that’s how it’s measured you have to be on the W-2 during that period now let’s talk my favorite part money just how much can you return per staff member 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 income to an optimum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers escalated 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 since the mayhem 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 as much as five 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 five thousand in twenty twenty that’s twenty six thousand dollars per staff member that is since that’s a lot of cash it is now there’s a caution here the PPP cash would have to be reduced 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 someplace around 10 thousand dollars a person so let’s say hypothetically you owned a restaurant in New York City where I’m from and you had a hundred employees and you took PPP money you would still get a million dollar in the mail from the internal revenue service so it’s substantial undoubtedly now the huge question is why does nobody understand about this since look when I initially heard about this when I first fulfilled Josh you understand I have actually got lots of investments in great deals of business I’m a major advocate for entrepreneurship in America and make numerous many investments in entrepreneurs of which numerous suffered through the pandemic when I first found out about this I called BS I do not believe it due to the fact that I use 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 which were well deserved and we utilized them sensibly to stay alive throughout the pandemic so when I heard about this I stated 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 indicate that’s how you understand that’s how misinformation is that there’s no details out there then a lot of individuals informed me well you can’t get it because you took the PPP also not true so let’s ask Josh why does no one learn about the employee retention credit you know what’s fascinating you’re discussing 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 big banks in our nation and they would process process in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply process process 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 actually done PPP you could not do ERC in the original program and when they changed the law in 2021 the banks were not doing ERC because 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 ever done it in the past 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 entered into this service and bottom line my company Kevin has actually been 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 big business clients have actually dealt with bottom line to recover other government programs we have actually 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 worker retention tax credit is a broad based refundable tax credit developed to encourage.
employers to keep staff members on their payroll. The credit is 50% of approximately $10,000 in earnings paid by an.
Since of COVID-19 or whose gross receipts, company whose organization is completely or partly suspended.
decline by more than 50%.
1. The credit is available to all employers despite size consisting of tax exempt organizations. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) small.
businesses who take Small company Loans.
2. To certify, the employer needs to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s organization is completely or partly suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross receipts are listed below 50% of the equivalent quarter in 2019. When the.
company’s gross receipts exceed 80% of an equivalent quarter in 2019 they no longer certify.
after the end of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the certifying wages paid up to $10,000 in total.
It is effective for salaries paid after March 13th and prior to December 31, 2020.
The definition of certifying wages differs by whether a company had, typically, basically than.
100 staff members in 2019.
Companies that focus on ERC filing help normally provide expertise and support to assist organizations navigate the complex procedure of claiming the credit. They can offer various services, consisting of:.
How is the employee retention credit calculated? Status Of Employee Retention Credit
Eligibility Evaluation: These companies will evaluate your business’s eligibility for the ERC based on factors such as your market, profits, and operations. They can assist determine if you meet the requirements for the credit and determine the maximum credit amount you can claim.
Documents and Estimation: ERC filing services will help in collecting the essential documentation, such as payroll records and financial statements, to support your claim. They will likewise help compute the credit amount based upon eligible salaries and other certifying costs.
Retroactive Claim Review: If you are qualified 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 change previous income tax return to declare these refunds.
Filing Assistance: Companies concentrating on ERC filings will prepare and send the essential forms and documentation on your behalf. This consists of completing Kind 941 or any other required tax forms.
Compliance and Updates: ERC policies and guidance have progressed with time. These business stay upgraded with the current changes and guarantee that your filings abide by the most existing guidelines. If the Internal revenue service demands additional information or carries out an audit related to your ERC claim, they can also offer continuous support.
It is necessary to research and vet any company offering ERC filing support to guarantee their credibility and proficiency. Search for established firms with experience in tax and payroll services, or consider reaching out to trusted accounting companies or tax experts who offer ERC submitting assistance.
Keep in mind that while these companies can offer valuable support, it’s constantly an excellent concept to have a basic understanding of the ERC requirements and process yourself. This will help you make informed choices and ensure accurate filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief measures. The objective of the ERC is to encourage organizations to retain and pay their workers during the pandemic, even if their operations have actually been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to eligible companies, including for-profit companies, tax-exempt companies, and specific governmental entities. To qualify, companies should meet one of two requirements:.
The business operations were completely or partly suspended due to a federal government order related to COVID-19.
Business experienced a significant decline in gross invoices. As discussed previously, for 2021, a considerable decline is specified as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decline is defined as a 20% decline in gross receipts compared to the 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 portion (up to 70%) of certified incomes paid to staff members, including specific health insurance costs. 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, companies that received a Paycheck Protection Program (PPP) loan were not eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 permits companies to declare the ERC even if they received a PPP loan. Nevertheless, the very same incomes can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and improved, permitting qualified employers to claim the credit for certified salaries paid as far back as March 13, 2020. This retroactive arrangement provides a chance for services to amend prior-year income tax return and get refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their work tax returns, generally Kind 941. The excess can be reimbursed to the company if the credit goes beyond the quantity of work taxes owed.
It is necessary to note that the ERC arrangements and eligibility criteria have actually developed gradually. The very best course of action is to talk to a tax expert or go to the main internal revenue service site for the most updated and detailed info relating to the ERC, consisting of any recent legal changes or updates.
To receive the ERC, an organization should fulfill among the following requirements:.
The business operations were completely or partially suspended due to a government order related to COVID-19.
The business experienced a substantial decrease in gross invoices. For 2021, a substantial decline is defined as a 20% decline 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 invoices compared to the exact same quarter in 2019, or a 20% decrease in gross invoices compared to the immediately preceding quarter.
The ERC is readily available to businesses of all sizes, including tax-exempt organizations, however there are some exceptions. Government entities and companies that received a PPP loan may have constraints on claiming the credit.
The procedure for claiming the ERC involves finishing the essential types and including the credit on your employment tax return (generally Type 941). The exact time it takes to process the credit can vary based upon a number of factors, consisting of the intricacy of your business and the workload of the IRS. It’s suggested to talk to a tax professional for assistance specific to your scenario.
There are a number of business that can assist with the process of claiming the ERC. Some well-known business that use help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the information provided here is based on basic understanding and might not show the most recent updates or changes to the ERC. It’s important to talk to a tax expert or visit the official IRS website for the most accurate and current information relating to eligibility, declaring procedures, and offered support.
Less than 100. The credit is based if the company had 100 or less employees on average in 2019.
on salaries paid to all employees whether they in fact worked or not. To put it simply, even if the.
employees worked full time and made money for full time work, the company still gets the credit.
Greater than 100. The credit is if the company had more than 100 staff members on average in 2019.
enabled just for earnings paid to employees who did not work during the calendar quarter.
In both cases, “salaries” includes not simply cash payments however also a portion of the expense of company.
offered health care. Status Of Employee Retention Credit
Companies can be instantly repaid for the credit by minimizing the amount of payroll taxes they.