Lets talk first about The Employee Retention Credit Program :
Our group here what do these guys doing everybody in this space is helping teach people about ERC and uh constantly provide a gorgeous breakfast and have individuals actually learn about the program we must head to the space where we are able to show a few of the checks that we are getting for companies and I wish to see that what is this this is uh hundreds of countless dollars actually Kevin hundreds of countless dollars so these are replicate copies of the letters that go to customers verifying that the check is on the way I indicate you understand if you just begin to 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 suggest it’s simply I mean think of the number of actual clients that went through the program yeah this is the very end this is the celebration at the end when the check is validated the numbers are validated and the check is on the mail in the mail from the internal revenue service heading to the customer so that’s how you have the ability to track it you understand when you
get this you know the check is chosen sure which’s when they pay so they do not pay anything until they in fact receive the money they do not pay bottom line Wonder trust anything until this letter is confirmed the check is on the method they deposit it into their checking account and they can truly rely on Wonder trust that the procedure has actually been finished 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 six billion dollars wow so plainly they know what they’re doing and that’s what you need you need experts 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 talking about something truly essential today the staff member retention credit which most of you have actually never become aware of I definitely had not heard of it till extremely just recently and learned a lot about it since this is probably the lowest cost of capital for any small business anywhere
anytime if you have staff members in between 5 and five hundred so I have actually got the professional with me this is Josh Fox he’s the creator and CEO of bottom line Principles they’re the biggest processor of these ERC credits this is a 170 page program so it’s not easy this isn’t like PPP we simply phone your bank manager and state offer 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 have actually ended up being yes the Ambassador and paid spokesperson for this I like this program it’s disappearing soon you got to learn everything about it let’s talk worker 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 provided services 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everybody 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.
fix the money cash payroll tax refund okay go on sorry I just have to make sure we got that point I suggest that’s a big difference a loan versus cash money I like money cash that’s what we’re discussing alright 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 talk about how it works because it seems like to me if it’s a if it’s employee retention credit that individual needed to be a worker so I’m going to make the Presumption 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 service but it’s based on you having W-2 employees 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 eligible so you have to be on payroll in 2020 on the W-2 and you have to be on payroll for the first six months of 2021 on the W-2 correct so there were 6 quarters the program was open well stroll us through the 6 quarters so you had quarters 2 three and four of 2020 and you had quarters one two and 3 of 2021. fine so that’s how it’s determined you have to be on the W-2 during that duration now let’s talk my preferred part cash how much can you return per worker that was on a W-2 in those 6 quarters so the computation in 2020 to be precise Kevin is 50 of the worker’s income to a maximum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers escalated to 70 of the staff member’s income to a maximum of seven thousand per quarter how did that occur um they just changed 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 employees on payroll 100 so if you can get 5 000 per person Max in twenty that was 50 in 2020 approximately 5 thousand Max and after that what takes place 21 000 Max in 2021 oh that’s how you develop 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 because that’s a lot of cash it is now there’s a caveat here the PPP money would have to be lowered from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would minimize the 26 000 so what we’re seeing usually Kevin is if you took PPP cash someplace around ten 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 big certainly now the big question is why does nobody understand about this due to the fact that appearance when I first became aware of this when I initially met Josh you understand I have actually got lots of financial investments in lots of companies I’m a major advocate for entrepreneurship in America and make lots of many financial investments in entrepreneurs of which many suffered through the pandemic when I first became aware of this I called BS I do not think it since I use the PPP we went through the cash center Banks to get it it was very 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 carefully to survive during the pandemic so when I heard about this I said nah it can’t be true but when I dug around I even called to my political leader pals Governor Senators they didn’t know about it I mean that’s how you know that’s how misinformation is that there’s no information out there then a bunch of people told me well you can’t get it since you took the PPP likewise not real so let’s ask Josh why does nobody understand about the worker retention credit you know what’s interesting you’re speaking about the banks Kevin since in the PPP loan process 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 nation 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 might refrain from doing both programs so if you had done PPP you might refrain from doing ERC in the initial 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 any person about how to.
do this does your CFO understand how to do this not actually 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 companies yeah some of them are doing it as a payroll company your accountant no your accountant’s never ever done this prior to unless you have an account that went into this business and bottom line my company Kevin has actually been in business because 2009 and we’ve been dealing with the federal government and the state federal government to recuperate cash for Fortune 500 Fortune 1000 business so a great deal of our huge huge business clients have actually worked 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 property property tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit developed to motivate.
companies to keep employees on their payroll. The credit is 50% of as much as $10,000 in incomes paid by an.
Since of COVID-19 or whose gross receipts, company whose business is totally or partly suspended.
decline by more than 50%.
1. The credit is offered to all employers despite size including tax exempt companies. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) small.
companies who take Small Business Loans.
2. To certify, the company needs to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s company is completely or partly suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the comparable quarter in 2019. Once the.
company’s gross invoices go above 80% of an equivalent quarter in 2019 they no longer certify.
after the end of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the certifying salaries paid up to $10,000 in overall.
It is effective for incomes paid after March 13th and before December 31, 2020.
The definition of certifying incomes varies by whether a company had, usually, more or less than.
100 employees in 2019.
Companies that concentrate on ERC filing help typically supply competence and support to help businesses browse the intricate process of claiming the credit. They can provide various services, including:.
How is the employee retention credit calculated? The Employee Retention Credit Program
Eligibility Evaluation: These companies will examine your service’s eligibility for the ERC based upon factors such as your market, profits, and operations. They can assist figure out if you fulfill the requirements for the credit and determine the maximum credit quantity you can declare.
Paperwork and Estimation: ERC filing services will help in gathering the needed documents, such as payroll records and financial statements, to support your claim. They will also assist calculate the credit amount based on eligible earnings and other qualifying costs.
Retroactive Claim Review: If you are qualified to declare the ERC for previous quarters, these business can examine your past payroll records and financials to recognize possible chances for retroactive credits. They can assist you amend prior income tax return to claim these refunds.
Filing Assistance: Business concentrating on ERC filings will prepare and submit the needed types and paperwork in your place. This consists of completing Type 941 or any other required tax return.
Compliance and Updates: ERC guidelines and guidance have actually progressed gradually. These companies remain upgraded with the most recent modifications and ensure that your filings adhere to the most existing standards. They can also supply continuous support if the IRS requests extra info or conducts an audit related to your ERC claim.
It is necessary to research and veterinarian any business offering ERC filing help to ensure their trustworthiness and know-how. Try to find recognized companies with experience in tax and payroll services, or consider connecting to relied on accounting companies or tax specialists who use ERC filing support.
Keep in mind that while these companies can offer important support, 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 precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief procedures. The goal of the ERC is to motivate services to keep and pay their staff members throughout the pandemic, even if their operations have actually been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to qualified companies, consisting of for-profit organizations, tax-exempt companies, and particular governmental entities. To certify, companies should meet one of two criteria:.
The business operations were completely or partly suspended due to a government order related to COVID-19.
The business experienced a considerable decline in gross receipts. As discussed earlier, for 2021, a substantial decrease is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a considerable decrease is specified as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decline 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 amount is equal to a percentage (up to 70%) of qualified earnings paid to workers, consisting of certain health insurance expenditures. The maximum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, organizations that got a Paycheck Security Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 allows services to claim the ERC even if they received a PPP loan. Nevertheless, the same salaries can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively broadened and enhanced, enabling eligible employers to declare the credit for qualified incomes paid as far back as March 13, 2020. This retroactive arrangement supplies a chance for companies to modify prior-year tax returns and get refunds.
Claiming the Credit: Companies can declare the ERC by reporting it on their employment income tax return, typically Form 941. If the credit goes beyond the amount of employment taxes owed, the excess can be reimbursed to the company.
It is necessary to keep in mind that the ERC provisions and eligibility requirements have evolved in time. The very best course of action is to speak with a tax professional or visit the main internal revenue service website for the most in-depth and up-to-date information regarding the ERC, consisting of any current legislative modifications or updates.
To receive the ERC, a business needs to satisfy among the following requirements:.
The business operations were fully or partially suspended due to a government order related to COVID-19.
Business experienced a substantial decline in gross invoices. For 2021, a considerable decline is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a substantial decline is defined as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the right away preceding quarter.
The ERC is offered to companies of all sizes, including tax-exempt organizations, but there are some exceptions. For instance, federal government entities and companies that received a PPP loan may have limitations on declaring the credit.
The process for claiming the ERC involves finishing the required types and including the credit on your work income tax return (typically Form 941). The exact time it takes to process the credit can vary based on several aspects, including the intricacy of your organization and the workload of the IRS. It’s suggested to speak with a tax professional for guidance specific to your situation.
There are numerous business that can help with the process of declaring the ERC. Some popular business that offer support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the details supplied here is based on basic knowledge and might not reflect the most current updates or changes to the ERC. It is very important to seek advice from a tax expert or check out the main internal revenue service site for the most up-to-date and precise details regarding eligibility, claiming 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 workers whether they actually worked or not. In other words, 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 employer had more than 100 employees on average in 2019.
enabled just for earnings paid to employees who did not work during the calendar quarter.
In both cases, “earnings” consists of not simply money payments however likewise a part of the cost of employer.
supplied healthcare. The Employee Retention Credit Program
Employers can be right away reimbursed for the credit by lowering the amount of payroll taxes they.