Lets talk first about W2 Employee Retention Credit :
Our team here what do these guys doing everybody in this space is assisting teach individuals about ERC and uh constantly offer a stunning breakfast and have individuals actually find out about the program we need to head to the room where we have the ability to display some of the checks that we are getting for companies and I want to see that what is this this is uh hundreds of countless dollars literally Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to customers verifying that the check is on the way I mean you understand if you just start to look at a few of these here I mean this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I mean it’s just I imply consider how many real customers that went through the program yeah this is the very end this is the celebration at the end when the check is confirmed the numbers are verified and the check is on the mail in the mail from the internal revenue service heading to the consumer so that’s how you’re able to track it you know when you
receive this you understand the check is chosen sure and that’s when they pay so they don’t pay anything till they really receive the money they do not pay bottom line Wonder trust anything until this letter is confirmed the check is on the method they transfer it into their bank account and they can really trust Wonder trust that the procedure has been ended up and the number of you believe you’ve processed considering that you started this we’re about 35 000 of these for
about six billion dollars wow so clearly they know what they’re doing and that’s what you need you require experts 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 actually crucial today the worker retention credit which the majority of you have never ever become aware of I certainly hadn’t heard of it until extremely just recently and discovered a lot about it due to the fact that this is probably the most affordable cost of capital for any small business anywhere
anytime if you have workers in between five and five hundred so I’ve got the expert with me this is Josh Fox he’s the creator and CEO of bottom line Ideas they’re the largest processor of these ERC credits this is a 170 page program so it’s difficult this isn’t like PPP we simply call your bank supervisor and state give me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to tell all of us about it and how to get it and why I have actually become yes the Ambassador and paid spokesperson for this I love this program it’s going away 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 begin there so throughout the Trump Administration when President Trump was enacted they developed the cares Act and the cares act provided businesses 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 distinction right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the money money payroll tax refund all right go on sorry I just need to ensure we got that point I imply that’s a huge distinction a loan versus money cash I like cash money that’s what we’re speaking about 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 gorgeous hard check in the mail where you get real money from the IRS all right so let’s discuss how it works due to the fact that it seems like to me if it’s a if it’s staff member retention credit that person had to be a staff member so I’m going to make the Assumption this cash is not for the owner not for people on the cap table not for investors it’s for staff members right you had to have owned a business 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 qualified 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 4 of 2020 and you had quarters one two and three of 2021. okay so that’s how it’s measured you need to be on the W-2 during that duration now let’s talk my preferred part money just how much can you get back per staff member 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 wage 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 worker’s salary to a maximum of seven thousand per quarter how did that happen um they just altered the rules in.
2021 versus since 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 develop twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty six thousand dollars per employee that is since that’s a great deal of cash it is now there’s a caveat here the PPP money would have to be reduced from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would reduce the 26 000 so what we’re seeing usually Kevin is if you took PPP cash somewhere around 10 thousand dollars a person so let’s say hypothetically you owned a restaurant in New york city City where I’m from and you had a hundred staff members 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 big question is why does nobody understand about this since appearance when I first became aware of this when I initially met Josh you understand I have actually got great deals of financial investments in lots of business I’m a significant supporter for entrepreneurship in America and make numerous lots of 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 because 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 used them carefully to stay alive throughout the pandemic so when I became aware of this I said nah it can’t hold true but when I dug around I even contacted us to my political leader friends Governor Senators they didn’t learn about it I mean that’s how you understand that’s how false information is that there’s no information out there then a bunch of individuals told me well you can’t get it since you took the PPP also not real so let’s ask Josh why does no one understand about the employee retention credit you know what’s intriguing you’re speaking about the banks Kevin because in the PPP loan procedure 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 process in Canada a pre-pp loan there’s no loans in Canada by the way it’s just process process that’s all um and here there was turmoil due to the fact that keep in mind in the initial cares act you could not do both programs so if you had actually done PPP you might refrain from doing ERC in the original program and when they altered 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 ever 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 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 accounting professional no your accounting professional’s never ever done this prior to unless you have an account that went into this organization and bottom line my company Kevin has actually been in business considering that 2009 and we’ve been dealing with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 business so a lot of our huge huge corporate customers have dealt with bottom line to recuperate other government programs we have actually done sales tax and use tax unemployment tax work opportunity tax credits research and development tax credits unclaimed home property tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit created to motivate.
companies to keep workers on their payroll. The credit is 50% of up to $10,000 in salaries 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 companies no matter size consisting of tax exempt companies. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) little.
businesses who take Small company Loans.
2. To qualify, the company needs to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s business 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 similar quarter in 2019. When the.
company’s gross receipts exceed 80% of an equivalent quarter in 2019 they no longer certify.
after completion of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the qualifying earnings paid up to $10,000 in overall.
It works for salaries paid after March 13th and before December 31, 2020.
The meaning of qualifying earnings varies by whether an employer had, on average, basically than.
100 employees in 2019.
Companies that concentrate on ERC filing support usually provide know-how and support to help companies browse the intricate procedure of claiming the credit. They can offer different services, consisting of:.
How is the employee retention credit calculated? W2 Employee Retention Credit
Eligibility Assessment: These companies will evaluate your company’s eligibility for the ERC based on elements such as your market, earnings, and operations. If you meet the requirements for the credit and identify the maximum credit quantity you can claim, they can help figure out.
Documents and Estimation: ERC filing services will help in gathering the necessary documentation, such as payroll records and financial statements, to support your claim. They will also assist calculate the credit amount based upon eligible incomes and other certifying costs.
Retroactive Claim Review: If you are eligible to claim the ERC for previous quarters, these business can examine your past payroll records and financials to identify possible chances for retroactive credits. They can help you amend previous income tax return to declare these refunds.
Filing Help: Business concentrating on ERC filings will prepare and submit the needed forms and documents in your place. This consists of completing Form 941 or any other necessary tax forms.
Compliance and Updates: ERC regulations and guidance have actually progressed with time. These business remain updated with the current changes and ensure that your filings comply with the most present standards. If the IRS requests extra details or performs an audit associated to your ERC claim, they can likewise offer ongoing assistance.
It’s important to research study and vet any company providing ERC filing support to guarantee their reliability and expertise. Look for established companies with experience in tax and payroll services, or think about reaching out to trusted accounting companies or tax experts who use ERC filing assistance.
Remember that while these business can offer important support, it’s always an excellent concept to have a fundamental understanding of the ERC requirements and procedure yourself. This will assist you make notified choices and ensure precise filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief measures. The objective of the ERC is to motivate services to keep and pay their workers throughout the pandemic, even if their operations have actually been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is available to eligible companies, consisting of for-profit companies, tax-exempt companies, and particular governmental entities. To qualify, companies must satisfy one of two criteria:.
The business operations were completely or partially suspended due to a federal government order related to COVID-19.
Business experienced a significant decline in gross receipts. As mentioned previously, for 2021, a substantial decline is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decline in gross receipts compared to the exact same quarter in 2019, or a 20% decline in gross invoices compared to the right away preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount is equal to a percentage (up to 70%) of certified earnings paid to workers, including certain health plan 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: At first, businesses that got an Income Protection Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 permits services to declare the ERC even if they got a PPP loan. The exact same wages can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and boosted, enabling eligible companies to declare the credit for certified earnings paid as far back as March 13, 2020. This retroactive arrangement offers a chance for services to change prior-year income tax return and get refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their work income tax return, normally Form 941. If the credit exceeds the amount of work taxes owed, the excess can be refunded to the employer.
It’s important to keep in mind that the ERC arrangements and eligibility criteria have developed in time. The very best course of action is to seek advice from a tax professional or check out the official IRS site for the most updated and detailed details regarding the ERC, including any recent legislative modifications or updates.
To get approved for the ERC, a company must satisfy among the following requirements:.
The business operations were fully or partially suspended due to a federal government order related to COVID-19.
The business experienced a significant decrease in gross invoices. For 2021, a significant decrease is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the instantly preceding quarter.
The ERC is available to services of all sizes, consisting of tax-exempt companies, but there are some exceptions. Federal government entities and organizations that got a PPP loan may have constraints on claiming the credit.
The process for claiming the ERC involves completing the needed forms and including the credit on your employment tax return (normally Form 941). The exact time it takes to process the credit can differ based upon a number of factors, including the intricacy of your service and the work of the IRS. It’s recommended to consult with a tax professional for guidance particular to your circumstance.
There are a number of companies that can assist with the procedure of claiming the ERC. Some widely known companies that offer help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the information provided here is based on basic knowledge and might not reflect the most recent updates or modifications to the ERC. It is very important to consult with a tax expert or go to the main internal revenue service website for the most accurate and updated information concerning eligibility, claiming treatments, and readily available support.
Less than 100. The credit is based if the company had 100 or less employees on average in 2019.
on earnings paid to all employees whether they actually worked or not. Simply put, even if the.
employees worked full time and got paid for full-time work, the employer still gets the credit.
Greater than 100. If the company had more than 100 employees typically in 2019, then the credit is.
allowed just for salaries paid to staff members who did not work throughout the calendar quarter.
In both cases, “earnings” includes not simply cash payments but also a portion of the cost of employer.
provided healthcare. W2 Employee Retention Credit
Companies can be right away reimbursed for the credit by lowering the quantity of payroll taxes they.