Lets talk first about Employee Retention Credit 990 :
Our group here what do these people doing everyone in this room is assisting teach people about ERC and uh constantly offer a lovely breakfast and have individuals actually learn about the program we must 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 confirming that the check is on the method I suggest 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 indicate it’s simply I imply think about the number of actual 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 verified and the check is on the mail in the mail from the internal revenue service heading to the client so that’s how you’re able to track it you know when you
receive this you understand the check is gone for sure which’s when they pay so they do not pay anything till they in fact receive the money they do not 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 genuinely trust Wonder trust that the procedure has actually been completed and how many you think you’ve processed because you started this we’re about 35 000 of these for
about six billion dollars wow so clearly they know what they’re doing which’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 Fantastic here you’re at my YouTube channel we’re talking about something really essential today the staff member retention credit which most of you have never ever become aware of I certainly hadn’t heard of it till extremely just recently and learned a lot about it because this is probably the most affordable cost of capital for any small company anywhere
anytime if you have workers between five and five hundred so I’ve got the professional with me this is Josh Fox he’s the founder and CEO of bottom line Ideas 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 call your bank manager and say provide me a loan it doesn’t 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 representative for this I love this program it’s going away very 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 created the cares Act and the cares act used businesses 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly 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.
fix the money cash payroll tax refund alright go on sorry I just have to ensure we got that point I suggest that’s a huge difference a loan versus money money I like money 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 original 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 discuss how it works since it sounds like to me if it’s a if it’s worker retention credit that individual had to be a staff member 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 employees right you needed to have owned a business however it’s based on you having W-2 staff members in America not 10.99. As long as you had W-2 employees and you paid federal payroll taxes that’s why you would be eligible so you have to be on payroll in 2020 on the W-2 and you have to be on payroll for the very first six months of 2021 on the W-2 correct so there were six quarters the program was open well walk us through the 6 quarters so you had quarters 2 3 and four of 2020 and you had quarters one two and three of 2021. all right so that’s how it’s determined you need 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 worker that was on a W-2 in those 6 quarters so the estimation in 2020 to be specific Kevin is 50 of the worker’s wage to a maximum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the worker’s income to an optimum of 7 thousand per quarter how did that occur um they simply changed the rules in.
2021 versus since the turmoil of the pandemic so they wanted 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 up to 5 thousand Max and after that what takes place 21 000 Max in 2021 oh that’s how you create twenty 6 thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty 6 thousand dollars per staff member that is because that’s a lot of cash it is now there’s a caution here the PPP money would have to be decreased from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would lower the 26 000 so what we’re seeing on average Kevin is if you took PPP money somewhere around ten 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 money you would still get a million dollar in the mail from the IRS so it’s substantial certainly now the big concern is why does no one learn about this since look when I initially became aware of this when I initially met Josh you know I have actually got great deals of investments in great deals of business I’m a significant advocate for entrepreneurship in America and make lots of lots of financial investments in entrepreneurs of which numerous suffered through the pandemic when I initially became aware of this I called BS I don’t believe 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 been worthy of and we used them sensibly to stay alive during the pandemic so when I heard about this I said nah it can’t hold true however when I dug around I even called to my politician friends Governor Senators they didn’t know about it I mean that’s how you understand that’s how false information is that there’s no info out there then a lot of individuals told me well you can’t get it since you took the PPP likewise not true so let’s ask Josh why does nobody know about the worker retention credit you understand what’s intriguing you’re discussing the banks Kevin because in the PPP loan procedure the federal government made it really 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 procedure process that’s all um and here there was mayhem because remember in the initial cares act you might not do both programs so if you had actually done PPP you might not do ERC in the initial program and when they changed 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 any person about how to.
do this does your CFO know how to do this not actually she or he’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 accounting professional’s never done this before unless you have an account that entered into this service and bottom line my company Kevin has stayed in business given that 2009 and we have actually been working with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 companies so a great deal of our big big business customers have worked with bottom line to recover other federal government programs we have actually done sales tax and utilize tax joblessness tax work opportunity tax credits research and development tax credits unclaimed home real estate tax all of these other federal government programs.
The worker retention tax credit is a broad based refundable tax credit designed to motivate.
companies to keep workers on their payroll. The credit is 50% of approximately $10,000 in earnings paid by an.
employer whose business is completely or partly suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is offered to all companies no matter size consisting of tax exempt organizations. There are.
just 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
services who take Small company Loans.
2. To certify, the company has to meet one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s organization is fully or partially suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross receipts are below 50% of the equivalent quarter in 2019. As soon as the.
company’s gross invoices exceed 80% of an equivalent quarter in 2019 they no longer qualify.
after completion of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the certifying salaries paid up to $10,000 in total.
It works for wages paid after March 13th and prior to December 31, 2020.
The definition of certifying earnings differs by whether a company had, typically, more or less than.
100 staff members in 2019.
Companies that focus on ERC filing assistance normally supply know-how and support to assist businesses browse the complicated process of claiming the credit. They can provide various services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit 990
Eligibility Assessment: These companies will evaluate your organization’s eligibility for the ERC based on factors such as your market, profits, and operations. They can assist determine if you satisfy the requirements for the credit and identify the optimum credit amount you can claim.
Documents and Computation: ERC filing services will assist in gathering the necessary documentation, such as payroll records and financial statements, to support your claim. They will also assist compute the credit amount based upon qualified earnings and other certifying costs.
Retroactive Claim Evaluation: If you are eligible to claim the ERC for prior quarters, these business can evaluate your past payroll records and financials to determine prospective opportunities for retroactive credits. They can assist you modify prior income tax return to claim these refunds.
Filing Assistance: Companies concentrating on ERC filings will prepare and submit the essential types and documentation on your behalf. This consists of finishing Form 941 or any other necessary tax forms.
Compliance and Updates: ERC guidelines and guidance have actually developed with time. These companies remain upgraded with the latest modifications and ensure that your filings adhere to the most present standards. If the Internal revenue service requests additional details or conducts an audit associated to your ERC claim, they can also supply ongoing support.
It is essential to research and veterinarian any business offering ERC filing assistance to guarantee their reliability and proficiency. Look for established companies with experience in tax and payroll services, or consider connecting to trusted accounting firms or tax professionals who offer ERC filing support.
Keep in mind that while these companies can supply important assistance, it’s constantly a good concept to have a basic understanding of the ERC requirements and process yourself. This will help you make informed decisions and guarantee accurate filings.
The Worker Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief measures. The objective of the ERC is to encourage businesses to maintain and pay their employees during 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, including for-profit companies, tax-exempt companies, and certain governmental entities. To qualify, companies need to 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 decrease in gross invoices. As pointed out previously, for 2021, a considerable decrease is defined as a 20% decline in gross invoices 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% decrease in gross invoices compared to the immediately preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity amounts to a percentage (approximately 70%) of qualified earnings paid to staff members, including specific health plan costs. The maximum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, companies that got a Paycheck Protection Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 permits businesses to claim the ERC even if they received a PPP loan. However, 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 enhanced, allowing qualified employers to claim the credit for qualified earnings paid as far back as March 13, 2020. This retroactive arrangement supplies a chance for businesses to modify prior-year income tax return and receive refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their work tax returns, generally Type 941. If the credit exceeds the amount of work taxes owed, the excess can be refunded to the company.
It is necessary to note that the ERC arrangements and eligibility requirements have progressed with time. The best course of action is to seek advice from a tax expert or check out the main internal revenue service site for the most in-depth and up-to-date info concerning the ERC, including any recent legislative modifications or updates.
To get approved for the ERC, a business should meet among the following criteria:.
Business operations were completely or partly suspended due to a federal government order related to COVID-19.
Business experienced a considerable decrease in gross invoices. For 2021, a significant decline is defined as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly 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 claiming the credit.
The procedure for declaring the ERC includes finishing the necessary kinds and including the credit on your employment tax return (normally Type 941). The exact time it takes to process the credit can vary based on numerous elements, consisting of the intricacy of your business and the work of the IRS. It’s advised to consult with a tax professional for assistance particular to your situation.
There are several companies that can help with the process of claiming the ERC. Some widely known companies that use support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the information provided here is based on basic knowledge and may not reflect the most recent updates or changes to the ERC. It is necessary to talk to a tax expert or go to the main internal revenue service website for the most updated and precise info relating to eligibility, declaring treatments, and offered help.
Less than 100. The credit is based if the employer had 100 or fewer staff members on average in 2019.
on wages paid to all workers whether they really worked or not. In other words, even if the.
staff members worked full-time and made money for full time work, the company still gets the credit.
Greater than 100. If the employer had more than 100 workers on average in 2019, then the credit is.
allowed only for earnings paid to workers who did not work throughout the calendar quarter.
In both cases, “incomes” includes not just money payments but likewise a portion of the expense of company.
provided health care. Employee Retention Credit 990
Companies can be immediately reimbursed for the credit by lowering the quantity of payroll taxes they.