Lets talk first about Employee Retention Credit Documentation Requirements :
Our group here what do these guys doing everybody in this room is assisting teach people about ERC and uh constantly offer a stunning breakfast and have individuals truly learn about the program we should head to the room where we are able to display some of the checks that we are getting for business and I want to see that what is this this is uh numerous millions of dollars literally Kevin numerous millions of dollars so these are replicate copies of the letters that go to clients verifying that the check is on the method I mean you understand if you just start to take a look at a few of these here I indicate this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I mean it’s simply I mean consider how many real 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 validated and the check is on the mail in the mail from the IRS heading to the consumer so that’s how you have the ability to track it you know when you
receive this you know the check is gone for sure which’s when they pay so they don’t pay anything until they in fact receive the money they do not pay bottom line Wonder trust anything till this letter is validated the check is on the way they deposit it into their bank account and they can truly trust Wonder trust that the process has been ended up and how many you believe you’ve processed given that you began this we’re about 35 000 of these for
about 6 billion dollars wow so clearly they know 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 among these that’s what matters all right Mr Fantastic here you’re at my YouTube channel we’re discussing something actually essential today the staff member retention credit which most of you have never heard of I certainly had not become aware of it up until very recently and discovered a lot about it due to the fact that this is probably the lowest cost of capital for any small business anywhere
anytime if you have workers in between 5 and five hundred so I have actually got the expert with me this is Josh Fox he’s the founder and CEO of bottom line Ideas 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 supervisor and state provide me a loan it does not 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’ve ended up being yes the Ambassador and paid representative for this I enjoy this program it’s going away soon you got to find out everything about it let’s talk worker retention credit Josh Fox what is an ERC let’s simply begin there so throughout the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act provided businesses 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 2 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 simply have to ensure we got that point I suggest that’s a huge difference a loan versus cash cash I like money money 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 lovely tough 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 worker retention credit that person needed to be a worker so I’m going to make the Presumption this cash is not for the owner not for individuals on the cap table not for investors it’s for staff members right you needed to have owned a service but 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 qualified so you have to be on payroll in 2020 on the W-2 and you have to be on payroll for the very first 6 months of 2021 on the W-2 proper so there were six quarters the program was open well walk us through the 6 quarters so you had quarters two three and four of 2020 and you had quarters one 2 and 3 of 2021. fine so that’s how it’s determined you need to be on the W-2 during that duration now let’s talk my preferred part cash 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 staff member’s wage to an optimum of 5 thousand dollars per staff member for the year of 2020 and in 2021 the numbers escalated to 70 of the staff member’s income to a maximum of seven thousand per quarter how did that take place um they just changed the rules in.
2021 versus since the chaos 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 up to five thousand Max and then what takes place 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 money it is now there’s a caution here the PPP money would have to be lowered from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would minimize 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 state hypothetically you owned a restaurant in New york city City where I’m from and you had a hundred employees and you took PPP money you would still get a million dollar in the mail from the IRS so it’s substantial obviously now the huge concern is why does no one learn about this because look when I initially became aware of this when I first fulfilled Josh you know I have actually got lots of financial investments in lots of business I’m a major advocate for entrepreneurship in America and make many many financial investments in entrepreneurs of which lots of suffered through the pandemic when I initially heard about this I called BS I don’t believe it because I use the PPP we went through the money 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 deserved and we used them wisely to stay alive during the pandemic so when I found out about this I said nah it can’t hold true however when I dug around I even contacted us to my politician buddies Governor Senators they didn’t understand about it I imply that’s how you know that’s how false information is that there’s no details 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 real so let’s ask Josh why does no one learn about the staff member retention credit you understand what’s interesting you’re discussing 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 big 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 chaos because keep in mind in the initial cares act you could refrain from doing both programs so if you had actually done PPP you might not do ERC in the initial program and when they altered the law in 2021 the banks were not doing ERC since 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 understand how to do this not truly he or she’s never ever done it before do the banks do it nope the banks don’t do it the payroll companies yeah some of them are doing it as a payroll business your accounting professional no your accountant’s never done this before unless you have an account that went into this business and bottom line my firm Kevin has been in business considering that 2009 and we have actually 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 huge business customers have dealt with bottom line to recover 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 property tax all of these other government programs.
The worker retention tax credit is a broad based refundable tax credit designed to encourage.
employers to keep workers on their payroll. The credit is 50% of approximately $10,000 in wages paid by an.
company whose company is totally or partially suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
1. The credit is readily available to all employers despite size consisting of tax exempt companies. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) little.
organizations who take Small Business Loans.
2. To certify, the company needs to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s service is fully or partly suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross invoices are below 50% of the similar quarter in 2019. When the.
employer’s gross invoices go above 80% of a similar 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 qualifying 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 qualifying incomes varies by whether an employer had, usually, more or less than.
100 staff members in 2019.
Companies that focus on ERC filing assistance generally offer expertise and assistance to assist companies browse the intricate procedure of claiming the credit. They can provide various services, including:.
How is the employee retention credit calculated? Employee Retention Credit Documentation Requirements
Eligibility Evaluation: These business will assess your organization’s eligibility for the ERC based on factors such as your market, revenue, and operations. They can assist identify if you fulfill the requirements for the credit and identify the maximum credit amount you can declare.
Documentation and Calculation: ERC filing services will help in gathering the needed documents, such as payroll records and financial declarations, to support your claim. They will likewise assist compute the credit amount based on eligible earnings and other qualifying expenses.
Retroactive Claim Review: If you are eligible to declare the ERC for previous quarters, these business can evaluate your previous payroll records and financials to identify potential opportunities for retroactive credits. They can help you change previous tax returns to declare these refunds.
Filing Support: Business focusing on ERC filings will prepare and send the necessary types and documentation in your place. This includes finishing Form 941 or any other necessary tax forms.
Compliance and Updates: ERC guidelines and assistance have evolved in time. These business remain updated with the current modifications and make sure that your filings adhere to the most current guidelines. They can also offer continuous support if the IRS requests additional info or conducts an audit related to your ERC claim.
It’s important to research and veterinarian any company providing ERC filing support to guarantee their reliability and proficiency. Search for recognized companies with experience in tax and payroll services, or consider reaching out to trusted accounting companies or tax experts who offer ERC filing support.
Bear in mind that while these companies can provide important support, it’s always a great idea to have a standard understanding of the ERC requirements and process yourself. This will help you make informed choices and guarantee 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 goal of the ERC is to encourage organizations to retain and pay their employees during the pandemic, even if their operations have been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to eligible employers, consisting of for-profit companies, tax-exempt organizations, and particular governmental entities. To certify, employers need to satisfy one of two criteria:.
The business operations were completely or partially suspended due to a government order related to COVID-19.
Business experienced a significant decline in gross invoices. As pointed out earlier, for 2021, a substantial decline is defined as a 20% decrease in gross invoices compared to the exact 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 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 amount is equal to a portion (as much as 70%) of certified earnings paid to workers, consisting of certain health plan expenditures. 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 a Paycheck Protection Program (PPP) loan were not eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 allows services to declare the ERC even if they received a PPP loan. The same wages can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively broadened and enhanced, permitting eligible employers to claim the credit for certified salaries paid as far back as March 13, 2020. This retroactive provision offers a chance for services to amend prior-year income tax return and get refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their work income tax return, normally Type 941. If the credit exceeds the quantity of employment taxes owed, the excess can be reimbursed to the company.
It is essential to keep in mind that the ERC arrangements and eligibility criteria have actually evolved with time. The best strategy is to speak with a tax professional or check out the official IRS website for the most current and comprehensive information concerning the ERC, consisting of any recent legal changes or updates.
To qualify for the ERC, a company should meet among the following requirements:.
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. For 2021, a significant decrease 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 defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decrease in gross invoices compared to the right away preceding quarter.
The ERC is offered to businesses of all sizes, consisting of tax-exempt organizations, however there are some exceptions. For example, federal government entities and services that received a PPP loan might have limitations on declaring the credit.
The procedure for claiming the ERC includes finishing the necessary types and consisting of the credit on your work tax return (normally Type 941). The exact time it requires to process the credit can differ based upon numerous factors, consisting of the intricacy of your service and the workload of the IRS. It’s advised to speak with a tax professional for guidance specific to your situation.
There are numerous companies that can help with the procedure of declaring the ERC. These consist of accounting companies, tax advisory services, and payroll provider. Some popular business that use support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research and call these companies directly to ask about their services and charges.
Please keep in mind that the details offered here is based upon basic knowledge and may not reflect the most current updates or modifications to the ERC. It is necessary to consult with a tax expert or visit the official IRS website for the most updated and precise information regarding eligibility, claiming procedures, and offered assistance.
Less than 100. If the company had 100 or less staff members usually in 2019, then the credit is based.
on wages paid to all employees whether they really worked or not. To put it simply, even if the.
staff members worked full time and earned money for full time work, the company still gets the credit.
Greater than 100. If the company had more than 100 employees typically in 2019, then the credit is.
permitted only for wages paid to employees who did not work during the calendar quarter.
In both cases, “earnings” includes not just money payments but likewise a part of the expense of company.
supplied healthcare. Employee Retention Credit Documentation Requirements
Employers can be instantly reimbursed for the credit by minimizing the amount of payroll taxes they.