Lets talk first about What Is A Employee Retention Credit :
Our team here what do these guys doing everyone in this room is assisting teach individuals about ERC and uh always offer a gorgeous breakfast and have individuals really learn more about the program we ought to head to the room where we have the ability to display some of the checks that we are getting for business and I ‘d like to see that what is this this is uh numerous millions of dollars actually Kevin numerous countless dollars so these are replicate copies of the letters that go to clients verifying that the check is on the method I indicate you know if you simply start 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 imply it’s just I indicate consider how many real 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 IRS heading to the consumer so that’s how you’re able to track it you understand when you
get this you know the check is opted for sure which’s when they pay so they don’t pay anything up until they actually receive the cash they don’t pay bottom line Wonder trust anything until this letter is validated the check is on the way they deposit it into their checking account and they can truly trust Wonder trust that the process has been completed 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 understand what they’re doing which’s what you require 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 Fantastic here you’re at my YouTube channel we’re speaking about something actually essential today the staff member retention credit which most of you have actually never become aware of I definitely had not become aware of it until extremely just recently and found out a lot about it since this is probably the lowest cost of capital for any small company anywhere
anytime if you have workers between five and five hundred so I have actually got the expert with me this is Josh Fox he’s the creator and CEO of bottom line Concepts 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 contact your bank manager 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 us all about it and how to get it and why I’ve ended up being yes the Ambassador and paid representative for this I love this program it’s going away very soon you got to find out all about it let’s talk employee retention credit Josh Fox what is an ERC let’s just begin there so throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act provided organizations three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everybody it makes a big distinction right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the money money payroll tax refund all right go on sorry I just have to ensure we got that point I mean that’s a huge distinction a loan versus cash money I like money cash that’s what we’re talking 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 original cares Act is the ERC and yes Kevin it is a beautiful tough check in the mail where you get actual cash from the IRS all right so let’s discuss how it works due to the fact that it sounds like to me if it’s a if it’s employee 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 individuals on the cap table not for shareholders it’s for workers right you needed to have owned an organization but it’s based on you having W-2 staff members 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 need to be on payroll in 2020 on the W-2 and you need to be on payroll for the first six 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 four of 2020 and you had quarters one 2 and 3 of 2021. all right so that’s how it’s measured you have to be on the W-2 during that duration now let’s talk my favorite part money just how much can you get back 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 worker’s salary to a maximum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the worker’s income to an optimum of seven thousand per quarter how did that happen um they just changed the rules in.
2021 versus due to the fact that the chaos 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 5 thousand Max and after that what occurs 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 six thousand dollars per worker that is since 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 six thousand dollars so if you took PPP loan one and PPP loan two you would decrease 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 dining establishment in New York City where I’m from and you had a hundred workers and you took PPP money you would still get a million dollar in the mail from the IRS so it’s substantial clearly now the big question is why does nobody learn about this due to the fact that look when I first found out about this when I first satisfied Josh you know I’ve got lots of investments in lots of business I’m a significant advocate for entrepreneurship in America and make many lots of investments in business owners of which numerous suffered through the pandemic when I first became aware of this I called BS I don’t think it due to the fact that I utilize the PPP we went through the money 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 sensibly to survive throughout the pandemic so when I found out about this I said nah it can’t be true but when I dug around I even called to my politician good friends Governor Senators they didn’t learn about it I mean that’s how you know that’s how false information is that there’s no information out there then a bunch of people told me well you can’t get it due to the fact that you took the PPP likewise not true so let’s ask Josh why does no one know 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 very clear that if you desired a PPP loan you would call Wells Fargo Citibank Bank of America any of the huge banks in our country and they would process procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s just procedure procedure that’s all um and here there was turmoil since 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 altered 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 anybody about how to.
do this does your CFO understand how to do this not truly he or she’s never done it before do the banks do it nope the banks do not do it the payroll business yeah a few of them are doing it as a payroll business your accounting professional no your accounting professional’s never ever done this before unless you have an account that entered into this company and bottom line my company Kevin has actually stayed in business since 2009 and we’ve been working with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 companies so a great deal of our huge big corporate customers have dealt with bottom line to recuperate other government programs we have actually done sales tax and utilize tax unemployment tax work chance tax credits research and development tax credits unclaimed home real estate tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit created to encourage.
employers to keep staff members on their payroll. The credit is 50% of as much as $10,000 in earnings paid by an.
Since of COVID-19 or whose gross invoices, company whose company is totally or partly suspended.
decrease by more than 50%.
1. The credit is offered to all companies regardless of size including tax exempt companies. There are.
just two exceptions: (1) state and city governments and their instrumentalities and (2) little.
organizations who take Small company Loans.
2. To qualify, the employer needs to fulfill one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s business is completely 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. As soon as the.
employer’s gross receipts go above 80% of a comparable 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 earnings paid up to $10,000 in total.
It works for incomes paid after March 13th and prior to December 31, 2020.
The meaning of qualifying wages differs by whether an employer had, typically, basically than.
100 employees in 2019.
Companies that specialize in ERC filing assistance generally offer knowledge and assistance to help services browse the complex procedure of declaring the credit. They can use different services, consisting of:.
How is the employee retention credit calculated? What Is A Employee Retention Credit
Eligibility Evaluation: These business will assess your organization’s eligibility for the ERC based upon elements such as your market, income, and operations. They can assist figure out if you satisfy the requirements for the credit and recognize the optimum credit quantity you can declare.
Paperwork and Calculation: ERC filing services will help in collecting the needed paperwork, such as payroll records and monetary statements, to support your claim. They will also help determine the credit amount based on eligible incomes and other certifying expenses.
Retroactive Claim Review: If you are qualified to claim the ERC for prior quarters, these companies can review your previous payroll records and financials to recognize prospective opportunities for retroactive credits. They can help you change previous income tax return to declare these refunds.
Filing Assistance: Business specializing in ERC filings will prepare and submit the necessary types and documents on your behalf. This consists of completing Form 941 or any other required tax forms.
Compliance and Updates: ERC policies and assistance have developed gradually. These business remain upgraded with the latest modifications and ensure that your filings abide by the most present standards. If the Internal revenue service demands extra information or performs an audit associated to your ERC claim, they can likewise offer continuous assistance.
It is necessary to research study and vet any company providing ERC filing support to ensure their reliability and know-how. Look for recognized firms with experience in tax and payroll services, or think about connecting to relied on accounting firms or tax specialists who use ERC submitting assistance.
Remember that while these business can offer valuable support, it’s always a good concept to have a fundamental understanding of the ERC requirements and procedure yourself. This will assist you make informed 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 procedures. The objective of the ERC is to motivate organizations to keep and pay their employees during the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to eligible employers, consisting of for-profit companies, tax-exempt organizations, and specific governmental entities. To certify, employers should fulfill one of two requirements:.
Business operations were completely or partially suspended due to a government order related to COVID-19.
The business experienced a considerable decline in gross invoices. As pointed out earlier, for 2021, a significant decrease is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a substantial decrease is specified as a 20% decline in gross receipts compared to the exact same quarter in 2019, or a 20% decrease in gross invoices compared to the immediately preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit quantity is equal to a percentage (up to 70%) of certified wages paid to workers, including specific health insurance expenditures. 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, businesses that received an Income Security Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 enables organizations to claim the ERC even if they got a PPP loan. The very same wages can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and improved, enabling eligible companies to declare the credit for qualified wages paid as far back as March 13, 2020. This retroactive arrangement provides an opportunity for organizations to change prior-year tax returns and get refunds.
Declaring the Credit: Employers can declare the ERC by reporting it on their employment income tax return, normally Kind 941. The excess can be reimbursed to the employer if the credit exceeds the quantity of employment taxes owed.
It is necessary to note that the ERC provisions and eligibility criteria have actually developed gradually. The best strategy is to talk to a tax professional or visit the official internal revenue service website for the most up-to-date and comprehensive information regarding the ERC, consisting of any recent legislative changes or updates.
To receive the ERC, a business needs to satisfy one of the following criteria:.
Business operations were completely or partially suspended due to a government order related to COVID-19.
Business experienced a significant decrease in gross receipts. 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 decrease is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decline in gross invoices compared to the right away preceding quarter.
The ERC is offered to businesses of all sizes, consisting of tax-exempt companies, but there are some exceptions. For instance, federal government entities and services that got a PPP loan might have constraints on declaring the credit.
The procedure for declaring the ERC includes finishing the needed kinds and including the credit on your work income tax return (normally Kind 941). The exact time it takes to process the credit can vary based upon several aspects, consisting of the complexity of your business and the work of the internal revenue service. It’s suggested to consult with a tax expert for guidance particular to your circumstance.
There are a number of companies that can assist with the process of claiming the ERC. Some well-known companies that offer help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the information supplied here is based upon basic knowledge and may not reflect the most current updates or modifications to the ERC. It is very important to consult with a tax professional or check out the official IRS site for the most up-to-date and accurate details relating to eligibility, declaring procedures, and readily available help.
Less than 100. The credit is based if the employer had 100 or less 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. If the company had more than 100 workers on average in 2019, then the credit is.
permitted only for incomes paid to employees who did not work throughout the calendar quarter.
In both cases, “earnings” consists of not just cash payments but likewise a portion of the expense of employer.
supplied healthcare. What Is A Employee Retention Credit
Companies can be right away compensated for the credit by minimizing the quantity of payroll taxes they.