Lets talk first about What Employees Are Eligible For Employee Retention Credit :
Our group here what do these people doing everybody in this room is assisting teach people about ERC and uh always provide a stunning breakfast and have individuals really learn more about the program we must head to the space where we have the ability to show some 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 actually Kevin numerous countless dollars so these are duplicate copies of the letters that go to clients confirming that the check is on the method I suggest you understand if you just start to look at some of these here I indicate this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I imply it’s just I suggest consider the number of real customers that went through the program yeah this is the very end this is the celebration 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 understand when you
get this you understand the check is gone for sure and that’s when they pay so they don’t pay anything until they really get the cash they do not pay bottom line Wonder trust anything till this letter is confirmed the check is on the way they transfer it into their checking account and they can really trust Wonder trust that the procedure has been ended up and the number of you believe you have actually processed considering that you started this we’re about 35 000 of these for
about 6 billion dollars wow so clearly 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 discussing something really crucial today the employee retention credit which most of you have never ever heard of I certainly had not become aware of it up until extremely recently and learned a lot about it due to the fact that this is most likely the most affordable cost of capital for any small company anywhere
anytime if you have staff members in between five and five hundred so I’ve 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 hard this isn’t like PPP we just contact your bank manager and say give me a loan it does not work there’s not a loan it’s an application and Josh is going to tell us all about it and how to get it and why I’ve ended up being yes the Ambassador and paid spokesperson for this I love 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 just begin there so throughout the Trump Administration when President Trump was enacted they developed the cares Act and the cares act provided companies three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody it makes a huge distinction right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the cash money payroll tax refund okay go on sorry I simply need to make certain we got that point I mean that’s a big difference a loan versus money money I like money cash 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 initial cares Act is the ERC and yes Kevin it is a beautiful difficult check in the mail where you get actual cash from the IRS all right so let’s talk about how it works since it seems like to me if it’s a if it’s worker retention credit that person needed to be a staff member so I’m going to make the Assumption this money is not for the owner not for people on the cap table not for shareholders it’s for staff members right you had to have actually owned an organization but it’s based on you having W-2 workers in America not 10.99. so as long as you had W-2 employees 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 need 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 walk us through the six quarters so you had quarters two three and 4 of 2020 and you had quarters one two and three of 2021. alright so that’s how it’s determined you have to be on the W-2 throughout that duration now let’s talk my preferred part cash just how much can you return per employee that was on a W-2 in those 6 quarters so the computation in 2020 to be specific Kevin is 50 of the employee’s salary to a maximum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the employee’s salary to a maximum of seven thousand per quarter how did that happen um they just altered the rules in.
2021 versus because the turmoil 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 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 five thousand in twenty twenty that’s twenty 6 thousand dollars per worker that is because that’s a great deal of cash it is now there’s a caveat here the PPP cash would have to be minimized 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 on average Kevin is if you took PPP cash somewhere around ten thousand dollars an individual so let’s state hypothetically you owned a dining establishment in New York 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 obviously now the huge concern is why does nobody learn about this since look when I initially heard about this when I first fulfilled Josh you know I’ve got lots of investments in great deals of companies I’m a significant 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 don’t think it due to the fact that I utilize 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 which were well deserved and we utilized them wisely to survive throughout the pandemic so when I became aware of this I stated nah it can’t hold true but when I dug around I even contacted us to my politician good friends Guv Senators they didn’t understand about it I indicate that’s how you know that’s how false information is that there’s no info 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 understand 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 country 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 chaos since remember in the initial cares act you could not do both programs so if you had actually done PPP you might not do ERC in the original program and when they changed the law in 2021 the banks were not doing ERC due to the fact that 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 know how to do this not really 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 a few of them are doing it as a payroll business your accountant no your accounting professional’s never ever done this before unless you have an account that went into this company and bottom line my firm Kevin has actually stayed in business because 2009 and we’ve been dealing with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 companies so a great deal of our big big corporate clients have dealt with bottom line to recover other federal government programs we’ve done sales tax and utilize tax joblessness 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 designed to motivate.
employers to keep staff members on their payroll. The credit is 50% of approximately $10,000 in incomes paid by an.
employer whose business is completely or partially suspended because of COVID-19 or whose gross invoices.
decrease by more than 50%.
1. The credit is offered to all employers despite size including tax exempt organizations. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) little.
companies who take Small Business Loans.
2. To certify, the employer has to satisfy one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s organization is completely or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are below 50% of the comparable quarter in 2019. When the.
company’s gross invoices go above 80% of a comparable quarter in 2019 they no longer certify.
after completion of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the qualifying incomes paid up to $10,000 in overall.
It is effective for incomes paid after March 13th and before December 31, 2020.
The meaning of certifying salaries differs by whether a company had, usually, basically than.
100 staff members in 2019.
Business that specialize in ERC filing assistance typically supply know-how and support to assist businesses browse the intricate process of declaring the credit. They can provide various services, consisting of:.
How is the employee retention credit calculated? What Employees Are Eligible For Employee Retention Credit
Eligibility Assessment: These business will assess your business’s eligibility for the ERC based upon aspects such as your market, income, and operations. They can help figure out if you meet the requirements for the credit and identify the maximum credit amount you can declare.
Documents and Estimation: ERC filing services will assist in collecting the necessary documentation, such as payroll records and financial declarations, to support your claim. They will likewise help compute the credit quantity based upon qualified salaries and other qualifying expenses.
Retroactive Claim Review: If you are qualified to claim the ERC for prior quarters, these companies can examine your past payroll records and financials to recognize prospective chances for retroactive credits. They can help you amend prior tax returns to declare these refunds.
Filing Help: Companies specializing in ERC filings will prepare and submit the essential forms and documents in your place. This consists of completing Kind 941 or any other necessary tax return.
Compliance and Updates: ERC policies and assistance have progressed gradually. These companies remain upgraded with the current modifications and ensure that your filings abide by the most present standards. If the IRS requests extra information or carries out an audit related to your ERC claim, they can also provide ongoing support.
It’s important to research study and vet any business providing ERC filing assistance to guarantee their credibility and knowledge. Look for recognized firms with experience in tax and payroll services, or consider reaching out to relied on accounting companies or tax professionals who provide ERC submitting assistance.
Keep in mind that while these companies can provide important help, 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 accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief steps. The goal of the ERC is to motivate companies to retain and pay their workers throughout 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 companies, tax-exempt organizations, and particular governmental entities. To certify, companies must fulfill 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 substantial decline in gross receipts. As discussed previously, for 2021, a considerable decline is defined as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly 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 (as much as 70%) of qualified earnings paid to staff members, consisting of particular health plan expenditures. 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, organizations that got an Income Defense Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 permits organizations 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 Arrangement: The ERC has been retroactively expanded and boosted, permitting qualified employers to claim the credit for certified incomes paid as far back as March 13, 2020. This retroactive arrangement supplies an opportunity for organizations to change prior-year income tax return and get refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their work income tax return, generally Kind 941. If the credit surpasses the quantity of work taxes owed, the excess can be reimbursed to the company.
It is essential to note that the ERC provisions and eligibility criteria have actually progressed gradually. The best strategy is to consult with a tax professional or check out the official IRS site for the most detailed and current information relating to the ERC, consisting of any current legislative modifications or updates.
To get approved for the ERC, a company must satisfy among the following criteria:.
Business operations were completely or partially suspended due to a government order related to COVID-19.
The business experienced a substantial decline in gross invoices. 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 considerable decrease is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decline in gross receipts compared to the right away preceding quarter.
The ERC is readily available to organizations of all sizes, consisting of tax-exempt organizations, however there are some exceptions. For instance, government entities and companies that got a PPP loan may have limitations on declaring the credit.
The procedure for claiming the ERC includes finishing the necessary types and including the credit on your work tax return (typically Type 941). The exact time it takes to process the credit can differ based on several aspects, including the complexity of your company and the workload of the internal revenue service. It’s advised to speak with a tax professional for assistance specific to your circumstance.
There are a number of business that can aid with the procedure of declaring the ERC. These include accounting firms, tax advisory services, and payroll provider. Some popular business that offer support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research and call these business straight to ask about their services and costs.
Please note that the information supplied here is based upon general understanding and might not reflect the most current updates or modifications to the ERC. It is very important to seek advice from a tax professional or visit the main internal revenue service website for the most current and accurate info concerning eligibility, claiming treatments, and available assistance.
Less than 100. If the company had 100 or fewer employees on average in 2019, then the credit is based.
on incomes paid to all staff members whether they actually worked or not. Simply put, even if the.
workers 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 staff members typically in 2019, then the credit is.
allowed only for wages paid to staff members who did not work during the calendar quarter.
In both cases, “incomes” consists of not simply cash payments however likewise a part of the expense of company.
supplied health care. What Employees Are Eligible For Employee Retention Credit
Companies can be right away reimbursed for the credit by reducing the quantity of payroll taxes they.