Lets talk first about Which Employees Qualify For Employee Retention Credit :
Our group here what do these people doing everybody in this room is assisting teach individuals about ERC and uh constantly supply a stunning breakfast and have individuals really discover the program we ought to head to the space where we are able to show some of the checks that we are getting for business and I ‘d like to see that what is this this is uh hundreds of millions of dollars actually Kevin numerous countless dollars so these are duplicate copies of the letters that go to customers verifying that the check is on the method I indicate you know 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 imply it’s simply I suggest think about the number of actual 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 confirmed and the check is on the mail in the mail from the IRS heading to the customer so that’s how you’re able to track it you know when you
get this you understand the check is chosen sure which’s when they pay so they don’t pay anything until they really 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 bank account and they can genuinely rely on Wonder trust that the process has been ended up and how many you think you’ve processed because you started this we have to do with 35 000 of these for
about 6 billion dollars wow so clearly they understand what they’re doing and that’s what you require you require specialists 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 Fantastic here you’re at my YouTube channel we’re discussing something really essential today the worker retention credit which most of you have never ever become aware of I definitely hadn’t heard of it until very recently and found out a lot about it because this is most likely the most affordable expense of capital for any small business anywhere
anytime if you have workers in between five and five hundred so I’ve got the specialist 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 just phone your bank supervisor and state provide 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 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 all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just begin there so throughout the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act offered services 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone it makes a big difference right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
remedy the money cash payroll tax refund alright go on sorry I just need to make sure we got that point I suggest that’s a big difference a loan versus money money I like cash 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 gorgeous difficult check in the mail where you get real cash from the IRS all right so let’s speak about how it works since it sounds like to me if it’s a if it’s staff member 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 shareholders it’s for employees right you had to have actually owned a business but it’s based upon 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 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 appropriate so there were six quarters the program was open well walk us through the 6 quarters so you had quarters two 3 and 4 of 2020 and you had quarters one two and three of 2021. alright so that’s how it’s measured you have to be on the W-2 during that duration now let’s talk my preferred part money how much can you return per staff member that was on a W-2 in those six quarters so the estimation in 2020 to be exact Kevin is 50 of the employee’s wage to a maximum of 5 thousand dollars per staff member for the year of 2020 and in 2021 the numbers increased to 70 of the staff member’s salary to an optimum of seven thousand per quarter how did that occur um they simply altered the rules in.
2021 versus due to the fact that the turmoil of the pandemic so they wished 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 happens 21 000 Max in 2021 oh that’s how you develop twenty 6 thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per employee that is because that’s a great deal of cash it is now there’s a caveat here the PPP money would need to be reduced from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would decrease the 26 000 so what we’re seeing usually Kevin is if you took PPP money somewhere 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 workers and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s substantial certainly now the huge concern is why does nobody know about this due to the fact that appearance when I first found out about this when I first met Josh you understand I’ve got lots of financial investments in great deals of business I’m a major supporter for entrepreneurship in America and make numerous numerous investments in business owners 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 really 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 sensibly to stay alive during 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 good friends Guv Senators they didn’t understand 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 people told me well you can’t get it since you took the PPP also not true so let’s ask Josh why does nobody know about the staff member retention credit you understand what’s interesting you’re speaking 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 simply procedure process that’s all um and here there was mayhem since remember in the initial cares act you might refrain from doing both programs so if you had done PPP you could refrain from doing ERC in the original program and when they changed the law in 2021 the banks were refraining from doing ERC due to the fact that it’s not alone so you’re getting a tax refund so the government never made it clear to any person about how to.
do this does your CFO understand how to do this not really she or he’s never done it previously 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 business your accountant no your accountant’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 have actually been working with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 business so a lot of our huge huge business clients have actually worked with bottom line to recuperate other federal government programs we’ve done sales tax and use tax joblessness tax work opportunity tax credits research and development tax credits unclaimed home property tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit designed to motivate.
employers to keep employees on their payroll. The credit is 50% of up to $10,000 in wages paid by an.
company whose company is totally or partially suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
Schedule.
1. The credit is offered to all companies regardless of size including tax exempt companies. There are.
just 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
companies who take Small Business Loans.
2. To certify, the employer needs to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s service is completely or partially suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross invoices are listed below 50% of the comparable quarter in 2019. When the.
employer’s gross receipts exceed 80% of an equivalent quarter in 2019 they no longer certify.
after completion of that quarter.
Computation of the Credit.
The amount 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 prior to December 31, 2020.
The meaning of certifying salaries differs by whether a company had, usually, basically than.
100 employees in 2019.
Companies that concentrate on ERC filing support generally supply know-how and assistance to assist organizations navigate the intricate procedure of declaring the credit. They can offer various services, including:.
How is the employee retention credit calculated? Which Employees Qualify For Employee Retention Credit
Eligibility Assessment: These business will assess your company’s eligibility for the ERC based on factors such as your market, revenue, and operations. They can help identify if you meet the requirements for the credit and recognize the maximum credit amount you can claim.
Documents and Calculation: ERC filing services will help in collecting the required documents, such as payroll records and financial declarations, to support your claim. They will likewise help compute the credit quantity based on eligible salaries and other certifying expenditures.
Retroactive Claim Review: If you are eligible to claim the ERC for previous quarters, these business can evaluate your past payroll records and financials to determine potential chances for retroactive credits. They can help you modify previous tax returns to claim these refunds.
Filing Support: Companies concentrating on ERC filings will prepare and submit the required kinds and paperwork in your place. This consists of finishing Kind 941 or any other necessary tax forms.
Compliance and Updates: ERC regulations and guidance have developed with time. These business stay upgraded with the current modifications and ensure that your filings adhere to the most current guidelines. They can also provide continuous support if the internal revenue service demands extra info or conducts an audit related to your ERC claim.
It is necessary to research study and vet any company providing ERC filing assistance to guarantee their reliability and knowledge. Look for recognized firms with experience in tax and payroll services, or think about reaching out to relied on accounting companies or tax experts who offer ERC submitting assistance.
Bear in mind that while these business can supply important help, it’s always a good idea to have a standard understanding of the ERC requirements and procedure yourself. This will help you make notified decisions and guarantee precise filings.
The Worker Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief steps. The goal of the ERC is to motivate services to maintain and pay their workers during the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to eligible companies, including for-profit organizations, tax-exempt companies, and specific governmental entities. To certify, employers should fulfill one of two requirements:.
Business operations were completely or partially suspended due to a federal government order related to COVID-19.
Business experienced a substantial decrease in gross receipts. As pointed out earlier, for 2021, a significant 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 invoices compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the right away preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity amounts to a portion (up to 70%) of qualified salaries paid to employees, consisting of specific health insurance expenses. The optimum credit per staff member is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, companies that got an Income Defense Program (PPP) loan were not eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 enables services to declare the ERC even if they received a PPP loan. Nevertheless, the very same salaries can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and boosted, allowing eligible companies to claim the credit for certified incomes paid as far back as March 13, 2020. This retroactive arrangement provides an opportunity for companies to change prior-year income tax return and get refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their work tax returns, usually Type 941. The excess can be refunded to the employer if the credit goes beyond the amount of employment taxes owed.
It is very important to note that the ERC provisions and eligibility requirements have developed over time. The very best course of action is to seek advice from a tax expert or go to the official internal revenue service site for the most comprehensive and up-to-date info concerning the ERC, including any recent legal changes or updates.
To get approved for the ERC, a company should satisfy among the following criteria:.
The business operations were completely or partially suspended due to a federal government order related to COVID-19.
The business experienced a substantial decrease in gross receipts. For 2021, a considerable decline is specified as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a substantial decline is specified as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decline in gross invoices compared to the right away preceding quarter.
The ERC is available to businesses of all sizes, consisting of tax-exempt organizations, but there are some exceptions. For instance, government entities and services that received a PPP loan may have limitations on claiming the credit.
The procedure for declaring the ERC includes completing the required types and consisting of the credit on your employment income tax return (normally Form 941). The exact time it takes to process the credit can differ based on several aspects, consisting of the complexity of your company and the work of the internal revenue service. It’s recommended to consult with a tax professional for assistance specific to your situation.
There are numerous companies that can assist with the procedure of claiming the ERC. Some well-known business that provide support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the information supplied here is based on basic understanding and may not reflect the most recent updates or changes to the ERC. It is necessary to seek advice from a tax expert or go to the main internal revenue service website for the most up-to-date and accurate info concerning eligibility, claiming treatments, and available support.
Less than 100. The credit is based if the employer had 100 or less staff members on average in 2019.
on incomes paid to all workers whether they in fact worked or not. To put it simply, even if the.
employees worked full-time and got paid 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.
permitted only for salaries paid to employees who did not work throughout the calendar quarter.
In both cases, “wages” consists of not simply money payments however likewise a portion of the expense of company.
supplied healthcare. Which Employees Qualify For Employee Retention Credit
Payment.
Employers can be right away compensated for the credit by lowering the quantity of payroll taxes they.