Lets talk first about Employee Retention Credit Eligible Wages :
Our group here what do these men doing everyone in this space is helping teach individuals about ERC and uh constantly provide a lovely breakfast and have people actually learn about the program we ought to head to the space where we are able to display some of the checks that we are getting for business and I wish to see that what is this this is uh hundreds of countless dollars literally 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 suggest you know if you just start to look at some of these here I imply this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I mean it’s just I imply think about the number of actual customers that went through the program yeah this is the very end this is the party at the end when the check is confirmed the numbers are validated and the check is on the mail in the mail from the internal revenue service heading to the customer so that’s how you’re able to track it you understand when you
get this you understand the check is gone for sure and that’s when they pay so they do not pay anything until they actually get the money they don’t pay bottom line Wonder trust anything until this letter is validated the check is on the method they transfer it into their checking account and they can really trust Wonder trust that the procedure has been completed and the number of you believe you have actually processed since you started this we’re about 35 000 of these for
about six billion dollars wow so plainly they understand what they’re doing and that’s what you need you need 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 Terrific here you’re at my YouTube channel we’re discussing something actually important today the worker retention credit which the majority of you have actually never ever heard of I certainly had not become aware of it till very just recently and discovered a lot about it because this is most likely the lowest expense of capital for any small business anywhere
anytime if you have employees between five and five hundred so I’ve got the specialist with me this is Josh Fox he’s the founder and CEO of bottom line Principles they’re the biggest processor of these ERC credits this is a 170 page program so it’s hard this isn’t like PPP we simply call up 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’ve ended up being yes the Ambassador and paid spokesperson for this I enjoy this program it’s disappearing very soon you got to find out all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just start there so during the Trump Administration when President Trump was enacted they created the cares Act and the cares act provided companies three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everyone 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.
fix the cash money payroll tax refund fine go on sorry I just have to make certain we got that point I mean that’s a big distinction a loan versus cash money I like cash cash that’s what we’re discussing all right 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 real cash from the internal revenue service all right so let’s speak about how it works since it seems like to me if it’s a if it’s staff member 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 people on the cap table not for investors it’s for employees right you needed to have actually owned a service 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 6 months of 2021 on the W-2 correct so there were 6 quarters the program was open well stroll 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. alright so that’s how it’s measured you have to be on the W-2 throughout that duration now let’s talk my preferred part money 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 exact Kevin is 50 of the staff member’s income to a maximum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers escalated to 70 of the staff member’s income to an optimum of seven thousand per quarter how did that take place um they just altered the rules in.
2021 versus because 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 then what occurs 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 6 thousand dollars per worker that is since that’s a great deal of cash it is now there’s a caveat here the PPP cash would need to be minimized from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would reduce 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 dining establishment 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 internal revenue service so it’s huge obviously now the big question is why does no one learn about this due to the fact that appearance when I first became aware of this when I first met Josh you know I’ve got great deals of financial investments in lots of companies I’m a significant supporter for entrepreneurship in America and make numerous many financial investments in entrepreneurs of which lots of suffered through the pandemic when I first found out about this I called BS I do not 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 and that were well should have and we utilized them sensibly to survive during the pandemic so when I found out about this I said nah it can’t be true but when I dug around I even contacted us to my politician friends 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 lot of people informed 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 nobody know about the staff member retention credit you know what’s intriguing you’re discussing the banks Kevin because in the PPP loan procedure 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 process in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply process process that’s all um and here there was chaos since keep in mind in the original cares act you might not do both programs so if you had done PPP you might not do ERC in the original program and when they changed the law in 2021 the banks were not doing ERC because 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 truly she or he’s never ever 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 accounting professional’s never ever done this before unless you have an account that went into this business and bottom line my company Kevin has been in business because 2009 and we’ve been working with the federal government and the state government to recuperate money for Fortune 500 Fortune 1000 business so a great deal of our big huge business clients have worked with bottom line to recover other government programs we’ve done sales tax and use tax joblessness tax work chance tax credits research and development tax credits unclaimed home real estate tax all of these other government programs.
The staff member retention tax credit is a broad based refundable tax credit created to encourage.
employers to keep workers on their payroll. The credit is 50% of approximately $10,000 in incomes paid by an.
company whose organization is completely or partly suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is available to all companies regardless of 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 qualify, the company has to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s company is fully 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 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 the end of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the certifying wages paid up to $10,000 in total.
It is effective for incomes paid after March 13th and prior to December 31, 2020.
The meaning of qualifying wages varies by whether a company had, usually, more or less than.
100 workers in 2019.
Companies that focus on ERC filing help generally offer competence and support to assist businesses navigate the intricate process of declaring the credit. They can use numerous services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Eligible Wages
Eligibility Assessment: These business will examine your company’s eligibility for the ERC based on aspects such as your industry, earnings, and operations. If you satisfy the requirements for the credit and determine the maximum credit amount you can claim, they can assist figure out.
Documents and Estimation: ERC filing services will assist in collecting the needed documents, such as payroll records and financial statements, to support your claim. They will likewise help calculate the credit quantity based on eligible earnings and other qualifying expenditures.
Retroactive Claim Review: If you are qualified to declare the ERC for previous quarters, these business can examine your past payroll records and financials to determine potential opportunities for retroactive credits. They can assist you amend prior tax returns to declare these refunds.
Filing Assistance: Companies focusing on ERC filings will prepare and submit the necessary types and documentation in your place. This includes finishing Kind 941 or any other required tax forms.
Compliance and Updates: ERC regulations and guidance have developed with time. These business remain updated with the latest modifications and ensure that your filings comply with the most existing guidelines. If the IRS demands extra details or performs an audit related to your ERC claim, they can likewise offer continuous support.
It is necessary to research study and vet any company providing ERC filing assistance to ensure their reliability and know-how. Try to find recognized firms with experience in tax and payroll services, or consider reaching out to relied on accounting firms or tax professionals who provide ERC filing assistance.
Keep in mind that while these companies can provide valuable help, it’s constantly an excellent idea to have a fundamental understanding of the ERC requirements and process yourself. This will help you make informed choices and ensure accurate filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief steps. The goal of the ERC is to encourage organizations to keep and pay their staff members during the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to qualified companies, consisting of for-profit organizations, tax-exempt companies, and specific governmental entities. To qualify, employers need to meet one of two requirements:.
Business operations were totally or partially suspended due to a federal government order related to COVID-19.
Business experienced a considerable decrease in gross receipts. As mentioned 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 considerable decline is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decline in gross receipts compared to the right away preceding quarter.
Credit Quantity: 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 salaries paid to workers, consisting of specific health insurance expenses. 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, services that got a Paycheck Protection Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 permits organizations to declare the ERC even if they received a PPP loan. The same incomes can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and boosted, allowing eligible companies to declare the credit for qualified salaries paid as far back as March 13, 2020. This retroactive arrangement supplies an opportunity for services to modify prior-year income tax return and get refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their employment tax returns, generally Kind 941. If the credit exceeds the quantity of employment taxes owed, the excess can be refunded to the company.
It is very important to keep in mind that the ERC arrangements and eligibility criteria have progressed with time. The best course of action is to consult with a tax expert or check out the official internal revenue service website for the most in-depth and up-to-date info relating to the ERC, including any recent legislative modifications or updates.
To receive the ERC, an organization needs to satisfy among the following criteria:.
Business operations were fully or partially suspended due to a federal government order related to COVID-19.
Business experienced a substantial decrease in gross invoices. For 2021, a substantial decline is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a considerable 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 immediately preceding quarter.
The ERC is offered to businesses of all sizes, including tax-exempt companies, however there are some exceptions. For example, government entities and businesses that received a PPP loan might have restrictions on declaring the credit.
The process for claiming the ERC includes completing the essential types and including the credit on your employment income tax return (usually Kind 941). The exact time it takes to process the credit can vary based upon a number of aspects, consisting of the intricacy of your organization and the workload of the internal revenue service. It’s advised to seek advice from a tax professional for guidance particular to your scenario.
There are a number of companies that can aid with the process of declaring the ERC. These consist of accounting firms, tax advisory services, and payroll service providers. Some popular companies that use help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research study and get in touch with these companies straight to ask about their costs and services.
Please keep in mind that the info supplied here is based upon basic knowledge and might not reflect the most recent updates or changes to the ERC. It is very important to speak with a tax professional or visit the official internal revenue service website for the most accurate and updated information concerning eligibility, claiming treatments, and readily available assistance.
Less than 100. The credit is based if the employer had 100 or fewer staff members on average in 2019.
on salaries paid to all staff members whether they actually worked or not. In other words, 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 staff members typically in 2019, then the credit is.
allowed only for wages paid to employees who did not work throughout the calendar quarter.
In both cases, “salaries” consists of not simply cash payments but also a portion of the cost of employer.
supplied health care. Employee Retention Credit Eligible Wages
Companies can be right away repaid for the credit by reducing the quantity of payroll taxes they.