Lets talk first about Who Is The Employee Retention Credit For :
Our group 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 people actually discover the program we should head to the space where we are able to show a few 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 literally Kevin hundreds of millions of dollars so these are duplicate copies of the letters that go to customers confirming that the check is on the method I suggest you understand if you simply 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 suggest it’s simply I imply think of the number of real clients 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 validated 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 know the check is opted for sure and that’s when they pay so they do not pay anything till they really receive the cash they don’t pay bottom line Wonder trust anything till this letter is verified the check is on the way they deposit it into their bank account and they can genuinely trust Wonder trust that the procedure has been completed and how many you think you’ve processed given that 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 which’s what you need you require professionals 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 Terrific here you’re at my YouTube channel we’re discussing something really crucial today the worker retention credit which most of you have never become aware of I definitely had not heard of it till really recently and found out a lot about it because this is probably the lowest cost of capital for any small company anywhere
anytime if you have employees between 5 and five hundred so I’ve got the specialist 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 supervisor and say provide me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to inform 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 find out everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just start 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 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 difference 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 alright go on sorry I simply have to make sure we got that point I indicate that’s a huge distinction a loan versus cash cash I like money money that’s what we’re talking 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 original cares Act is the ERC and yes Kevin it is a lovely hard check in the mail where you get real money 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 person had to be an employee so I’m going to make the Presumption this money is not for the owner not for people on the cap table not for investors it’s for workers right you needed to have actually owned a service but it’s based on you having W-2 employees in America not 10.99. so as long as you had W-2 staff members 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 correct so there were six quarters the program was open well stroll 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. okay so that’s how it’s determined you have to be on the W-2 throughout that duration now let’s talk my favorite part cash just how much can you get back per staff member that was on a W-2 in those 6 quarters so the calculation in 2020 to be exact Kevin is 50 of the employee’s income to an optimum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers escalated to 70 of the employee’s salary 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 wished 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 5 thousand Max and after that 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 six thousand dollars per employee that is because that’s a lot of cash it is now there’s a caution here the PPP cash would need to be decreased from the twenty 6 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 an individual so let’s state hypothetically you owned a restaurant in New York City where I’m from and you had a hundred employees and you took PPP cash you would still get a million dollar in the mail from the IRS so it’s big clearly now the big concern is why does no one learn about this since look when I initially found out about this when I initially satisfied Josh you know I have actually got lots of financial investments in lots of companies I’m a significant supporter for entrepreneurship in America and make many numerous financial investments in entrepreneurs of which lots of suffered through the pandemic when I initially became aware of this I called BS I don’t believe it because I use the PPP we went through the cash 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 deserved and we used them sensibly to survive during the pandemic so when I became aware of this I said nah it can’t be true however when I dug around I even called to my politician buddies Guv Senators they didn’t understand about it I imply that’s how you know that’s how misinformation is that there’s no details out there then a lot of individuals told me well you can’t get it due to the fact that you took the PPP also not true so let’s ask Josh why does no one learn about the employee retention credit you know what’s interesting you’re talking about the banks Kevin due to the fact that in the PPP loan process the federal government made it really clear that if you desired 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 just process process that’s all um and here there was turmoil due to the fact that remember in the original cares act you could refrain from doing both programs so if you had done PPP you might refrain from doing ERC in the initial 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 anybody about how to.
do this does your CFO know how to do this not truly he or she’s never ever done it before do the banks do it nope the banks do not do it the payroll business yeah some of them are doing it as a payroll business your accountant no your accountant’s never done this prior to unless you have an account that went into this organization and bottom line my firm Kevin has stayed in business given that 2009 and we have actually been working with the federal government and the state government to recuperate money for Fortune 500 Fortune 1000 companies so a great deal of our huge huge corporate customers have worked with bottom line to recover other federal 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 staff member retention tax credit is a broad based refundable tax credit developed to motivate.
companies to keep staff members on their payroll. The credit is 50% of approximately $10,000 in salaries paid by an.
employer whose business is fully or partially suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
1. The credit is readily available to all companies despite size including tax exempt organizations. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) small.
organizations who take Small Business Loans.
2. To certify, the company needs to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s business is completely or partially suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross receipts are below 50% of the comparable quarter in 2019. When the.
company’s gross invoices exceed 80% of a similar quarter in 2019 they no longer qualify.
after completion of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the certifying incomes paid up to $10,000 in total.
It works for earnings paid after March 13th and before December 31, 2020.
The meaning of qualifying salaries differs by whether a company had, typically, basically than.
100 employees in 2019.
Companies that focus on ERC filing assistance normally supply competence and assistance to assist organizations navigate the complicated procedure of claiming the credit. They can provide various services, including:.
How is the employee retention credit calculated? Who Is The Employee Retention Credit For
Eligibility Assessment: These business will examine your company’s eligibility for the ERC based on elements such as your industry, earnings, and operations. If you satisfy the requirements for the credit and determine the optimum credit amount you can declare, they can assist figure out.
Documents and Computation: ERC filing services will help in collecting the necessary paperwork, such as payroll records and financial declarations, to support your claim. They will also assist compute the credit amount based on qualified earnings and other qualifying expenses.
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 possible opportunities for retroactive credits. They can help you change previous tax returns to claim these refunds.
Filing Support: Business focusing on ERC filings will prepare and send the needed forms and documentation on your behalf. This consists of finishing Kind 941 or any other required tax forms.
Compliance and Updates: ERC regulations and guidance have progressed gradually. These companies remain upgraded with the latest changes and guarantee that your filings adhere to the most present guidelines. They can also provide ongoing support if the internal revenue service demands additional information or carries out an audit related to your ERC claim.
It is essential to research and vet any company providing ERC filing assistance to ensure their credibility and know-how. Search for established companies with experience in tax and payroll services, or consider reaching out to trusted accounting firms or tax experts who provide ERC submitting support.
Keep in mind that while these business can offer important assistance, it’s constantly a good concept to have a fundamental understanding of the ERC requirements and procedure yourself. This will assist you make informed decisions and ensure precise filings.
The Worker 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 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 qualified companies, consisting of for-profit companies, tax-exempt organizations, and specific governmental entities. To certify, employers must fulfill one of two criteria:.
Business operations were fully or partly suspended due to a government order related to COVID-19.
Business experienced a considerable decline in gross receipts. As pointed out previously, for 2021, a substantial decline is defined as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount amounts to a portion (up to 70%) of qualified salaries paid to workers, consisting of 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 received an Income Protection Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 enables companies to claim the ERC even if they got a PPP loan. However, the exact same wages can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively expanded and enhanced, enabling qualified companies to declare the credit for certified wages paid as far back as March 13, 2020. This retroactive arrangement supplies an opportunity for services to modify prior-year income tax return and receive refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their work income tax return, usually Kind 941. If the credit goes beyond the quantity of work taxes owed, the excess can be reimbursed to the employer.
It is essential to note that the ERC provisions and eligibility requirements have evolved with time. The very best course of action is to speak with a tax professional or visit the main IRS website for the most current and comprehensive information regarding the ERC, consisting of any recent legislative modifications or updates.
To receive the ERC, a company needs to meet one of the following criteria:.
Business operations were fully or partially suspended due to a government order related to COVID-19.
The business experienced a significant decline in gross invoices. For 2021, a significant decline is defined as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a substantial decline is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decline in gross invoices compared to the instantly preceding quarter.
The ERC is readily available to services of all sizes, including tax-exempt organizations, but there are some exceptions. For instance, government entities and businesses that received a PPP loan might have constraints on claiming the credit.
The process for declaring the ERC involves finishing the required kinds and including the credit on your work income tax return (generally Kind 941). The exact time it requires to process the credit can differ based on several aspects, consisting of the complexity of your company and the workload of the IRS. It’s recommended to speak with a tax expert for assistance specific to your circumstance.
There are several companies that can assist with the procedure of declaring the ERC. Some widely known companies that offer assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the information provided here is based on general knowledge and may not show the most current updates or modifications to the ERC. It is very important to seek advice from a tax professional or go to the main internal revenue service site for the most up-to-date and precise information regarding eligibility, declaring procedures, and offered 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 actually worked or not. To put it simply, even if the.
workers worked full-time and got paid for full-time work, the company still gets the credit.
Greater than 100. If the employer had more than 100 workers usually in 2019, then the credit is.
allowed only for wages paid to employees who did not work during the calendar quarter.
In both cases, “earnings” consists of not simply money payments however likewise a portion of the cost of employer.
offered healthcare. Who Is The Employee Retention Credit For
Companies can be instantly repaid for the credit by lowering the quantity of payroll taxes they.