Lets talk first about How Do I Qualify For Employee Retention Credit :
Our team here what do these people doing everybody in this space is helping teach individuals about ERC and uh constantly offer a beautiful breakfast and have individuals actually discover the program we ought to head to the room where we have the ability to show some of the checks that we are getting for business and I want to see that what is this this is uh hundreds of millions of dollars actually Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to clients verifying that the check is on the way I mean you know if you just start to look at some of these here I suggest this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s simply I indicate 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 verified and the check is on the mail in the mail from the IRS heading to the customer so that’s how you have the ability to track it you know when you
receive this you understand the check is chosen sure which’s when they pay so they do not pay anything up until they actually get the cash they do not pay bottom line Wonder trust anything until this letter is confirmed the check is on the way they transfer it into their checking account and they can genuinely trust Wonder trust that the procedure has actually been completed and the number of you believe you have actually processed because you started this we’re about 35 000 of these for
about six billion dollars wow so plainly they know 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 one of these that’s what matters all right Mr Fantastic here you’re at my YouTube channel we’re discussing something actually important today the employee retention credit which most of you have never ever become aware of I certainly hadn’t become aware of it until extremely recently and discovered a lot about it due to the fact that this is probably the most affordable 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 creator and CEO of bottom line Concepts 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 just call up your bank supervisor and say offer me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to tell 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 like 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 begin there so throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act provided businesses 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 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 okay go on sorry I simply need to make sure we got that point I suggest that’s a big distinction a loan versus money money I like cash money that’s what we’re speaking about okay 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 stunning hard check in the mail where you get actual cash from the internal revenue service all right so let’s speak about how it works because it sounds like to me if it’s a if it’s employee retention credit that individual had to be a staff member so I’m going to make the Assumption this money is not for the owner not for people on the cap table not for investors it’s for staff members right you had to have actually owned a company however it’s based upon you having W-2 staff members 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 need to be on payroll in 2020 on the W-2 and you need to be on payroll for the very first six months of 2021 on the W-2 proper so there were 6 quarters the program was open well stroll us through the 6 quarters so you had quarters two 3 and four of 2020 and you had quarters one 2 and three of 2021. all right so that’s how it’s determined you need to be on the W-2 throughout that period now let’s talk my preferred part cash just how much can you return per employee that was on a W-2 in those six quarters so the computation in 2020 to be exact Kevin is 50 of the employee’s income to an optimum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the employee’s income to a maximum of 7 thousand per quarter how did that happen um they just altered the rules in.
2021 versus since the chaos of the pandemic so they wished to even get more to keep those workers on payroll 100 so if you can get 5 000 per person Max in twenty that was 50 in 2020 as much as five thousand Max and after that what occurs 21 000 Max in 2021 oh that’s how you come up with 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 need to be minimized from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would decrease the 26 000 so what we’re seeing on average Kevin is if you took PPP cash somewhere around 10 thousand dollars an individual 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 internal revenue service so it’s substantial obviously now the big question is why does nobody know about this since look when I first heard about this when I first met Josh you know I have actually got great deals of financial investments in great deals of companies I’m a major advocate for entrepreneurship in America and make numerous lots of investments in business owners of which lots of suffered through the pandemic when I first found out about this I called BS I don’t think it since I use the PPP we went through the money 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 been worthy of and we used them carefully to stay alive during the pandemic so when I heard about this I stated nah it can’t be true but when I dug around I even called to my political leader buddies Governor Senators they didn’t understand about it I imply that’s how you understand that’s how misinformation is that there’s no info out there then a bunch of people told me well you can’t get it due to the fact that you took the PPP also not real so let’s ask Josh why does no one know about the worker retention credit you know what’s fascinating you’re speaking about the banks Kevin due to the fact that in the PPP loan process the federal government made it extremely clear that if you wanted a PPP loan you would call Wells Fargo Citibank Bank of America any of the huge banks in our nation and they would process process in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply procedure procedure that’s all um and here there was mayhem due to the fact that remember in the original cares act you could not do both programs so if you had actually done PPP you could 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 federal government never ever made it clear to anybody about how to.
do this does your CFO understand how to do this not actually he or she’s never ever done it before do the banks do it nope the banks do not do it the payroll companies yeah a few of them are doing it as a payroll company your accounting professional no your accounting professional’s never ever done this prior to unless you have an account that went into this company and bottom line my company Kevin has actually stayed in business given that 2009 and we have actually been dealing with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 companies so a lot of our huge big business clients have dealt 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 government programs.
The staff member retention tax credit is a broad based refundable tax credit designed to encourage.
companies to keep staff members on their payroll. The credit is 50% of up to $10,000 in earnings paid by an.
Because of COVID-19 or whose gross receipts, company whose business is totally or partially suspended.
decline by more than 50%.
1. The credit is available to all employers despite size including tax exempt companies. There are.
just 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
organizations who take Small company Loans.
2. To qualify, the employer needs to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s service is totally or partly suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross receipts are below 50% of the comparable quarter in 2019. Once the.
employer’s gross invoices go above 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 qualifying earnings paid up to $10,000 in overall.
It works for incomes paid after March 13th and prior to December 31, 2020.
The meaning of certifying salaries differs by whether a company had, typically, basically than.
100 employees in 2019.
Business that specialize in ERC filing assistance usually offer proficiency and support to help companies browse the complex procedure of declaring the credit. They can offer various services, including:.
How is the employee retention credit calculated? How Do I Qualify For Employee Retention Credit
Eligibility Assessment: These business will evaluate your organization’s eligibility for the ERC based upon elements such as your market, revenue, and operations. They can assist identify if you satisfy the requirements for the credit and identify the maximum credit amount you can declare.
Paperwork and Estimation: ERC filing services will help in collecting the essential documentation, such as payroll records and monetary declarations, to support your claim. They will likewise help determine the credit amount based upon eligible wages and other qualifying expenses.
Retroactive Claim Evaluation: If you are eligible to claim the ERC for previous quarters, these business can review your previous payroll records and financials to determine possible chances for retroactive credits. They can assist you modify prior tax returns to declare these refunds.
Filing Assistance: Business concentrating on ERC filings will prepare and submit the necessary types and documents in your place. This includes completing Type 941 or any other necessary tax return.
Compliance and Updates: ERC guidelines and guidance have progressed gradually. These business stay upgraded with the latest modifications and ensure that your filings comply with the most current standards. If the IRS requests extra information or conducts an audit associated to your ERC claim, they can also supply continuous assistance.
It’s important to research and veterinarian any company providing ERC filing assistance to ensure their trustworthiness and expertise. Search for recognized companies with experience in tax and payroll services, or consider connecting to trusted accounting firms or tax specialists who use ERC submitting assistance.
Bear in mind that while these companies can supply valuable assistance, it’s constantly a good idea to have a basic understanding of the ERC requirements and procedure yourself. This will assist you make notified choices and guarantee accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief steps. The objective of the ERC is to encourage companies to keep and pay their workers during the pandemic, even if their operations have actually been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to qualified employers, consisting of for-profit organizations, tax-exempt companies, and specific governmental entities. To certify, companies need to satisfy one of two criteria:.
Business operations were completely or partly suspended due to a government order related to COVID-19.
The business experienced a considerable decrease in gross receipts. As pointed out previously, for 2021, a significant decline is defined as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the instantly preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity is equal to a percentage (approximately 70%) of qualified wages paid to staff members, consisting of certain health plan expenses. 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, companies that got a Paycheck Protection Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 enables businesses to claim the ERC even if they received a PPP loan. The very same incomes can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and enhanced, enabling qualified employers to claim the credit for qualified wages paid as far back as March 13, 2020. This retroactive provision provides an opportunity for companies to amend prior-year income tax return and receive refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their work income tax return, normally Type 941. If the credit exceeds the amount of work taxes owed, the excess can be refunded to the company.
It’s important to keep in mind that the ERC provisions and eligibility requirements have progressed with time. The best strategy is to talk to a tax professional or visit the main IRS site for the most updated and detailed info concerning the ERC, including any current legislative modifications or updates.
To get approved for the ERC, an organization needs to satisfy among the following criteria:.
The business operations were fully or partly suspended due to a federal government order related to COVID-19.
The business experienced a substantial decline in gross receipts. For 2021, a substantial decrease is defined as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019, or a 20% decrease in gross receipts compared to the right away preceding quarter.
The ERC is available to services of all sizes, including tax-exempt organizations, however there are some exceptions. Government entities and organizations that received a PPP loan might have limitations on declaring the credit.
The procedure for claiming the ERC includes completing the essential types and consisting of the credit on your employment income tax return (generally Form 941). The exact time it requires to process the credit can differ based upon a number of elements, consisting of the intricacy of your service and the workload of the IRS. It’s suggested to seek advice from a tax expert for guidance specific to your circumstance.
There are several business that can help with the process of claiming the ERC. Some well-known business that provide assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the details provided here is based upon general understanding and might not show the most current updates or modifications to the ERC. It is very important to consult with a tax professional or visit the main internal revenue service website for the most accurate and current details relating to eligibility, claiming treatments, and available support.
Less than 100. The credit is based if the company had 100 or fewer employees on average in 2019.
on wages paid to all staff members whether they in fact worked or not. To put it simply, even if the.
staff members worked full-time and made money for full-time work, the employer still gets the credit.
Greater than 100. The credit is if the company had more than 100 workers on average in 2019.
permitted just for wages paid to staff members who did not work throughout the calendar quarter.
In both cases, “wages” includes not simply money payments but likewise a portion of the cost of company.
provided health care. How Do I Qualify For Employee Retention Credit
Companies can be immediately repaid for the credit by reducing the quantity of payroll taxes they.