Lets talk first about How Do We Receive The Employee Retention Credit :
Our group here what do these guys doing everybody in this room is helping teach individuals about ERC and uh always supply a beautiful breakfast and have individuals actually learn more about the program we should head to the space where we have the ability to show some of the checks that we are getting for companies and I wish to see that what is this this is uh numerous countless dollars actually Kevin numerous countless dollars so these are replicate copies of the letters that go to clients confirming that the check is on the way I mean you know if you simply begin to take a 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 imply it’s simply I suggest 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 validated the numbers are confirmed and the check is on the mail in the mail from the internal revenue service heading to the client so that’s how you have the ability to track it you understand when you
receive this you know the check is chosen sure which’s when they pay so they don’t pay anything till they really get the cash they don’t pay bottom line Wonder trust anything until this letter is validated the check is on the way they transfer it into their bank account and they can truly rely on Wonder trust that the procedure has actually been completed and how many you think you’ve processed since you began this we have to do with 35 000 of these for
about six billion dollars wow so plainly they know what they’re doing and that’s what you require 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 Terrific here you’re at my YouTube channel we’re speaking about something actually important today the employee retention credit which the majority of you have never ever become aware of I definitely had not become aware of it up until extremely just recently and discovered a lot about it due to the fact that this is most likely the lowest cost of capital for any small business anywhere
anytime if you have employees between 5 and five hundred so I have actually got the professional 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 hard this isn’t like PPP we just phone your bank supervisor and say give me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to inform 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 disappearing very soon you got to discover all about it let’s talk worker 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 used companies three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody it makes a huge distinction right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the money money payroll tax refund okay go on sorry I just need to ensure we got that point I indicate that’s a huge difference a loan versus money money I like money money that’s what we’re talking 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 initial cares Act is the ERC and yes Kevin it is a beautiful difficult check in the mail where you get actual cash from the internal revenue service all right so let’s talk 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 an employee so I’m going to make the Assumption this money is not for the owner not for individuals on the cap table not for investors it’s for workers right you needed to have actually owned a company however it’s based on you having W-2 employees in America not 10.99. As long as you had W-2 workers 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 proper so there were six quarters the program was open well walk us through the 6 quarters so you had quarters two 3 and 4 of 2020 and you had quarters one 2 and 3 of 2021. okay so that’s how it’s determined you have to be on the W-2 during that duration now let’s talk my favorite part cash just how much can you return per worker that was on a W-2 in those six quarters so the calculation in 2020 to be exact Kevin is 50 of the staff member’s income to an optimum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers increased to 70 of the worker’s wage to an optimum of 7 thousand per quarter how did that happen um they simply altered the rules in.
2021 versus due to the fact that the chaos 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 as much as 5 thousand Max and then what happens 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 6 thousand dollars per employee that is because that’s a great deal of cash it is now there’s a caveat 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 minimize the 26 000 so what we’re seeing typically Kevin is if you took PPP money someplace around 10 thousand dollars a person so let’s say hypothetically you owned a dining establishment in New York 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 internal revenue service so it’s huge clearly now the big concern is why does nobody learn about this since look when I initially found out about this when I initially fulfilled Josh you know I’ve got lots of financial investments in lots of companies I’m a significant advocate for entrepreneurship in America and make lots of numerous investments in business owners of which lots of suffered through the pandemic when I initially became aware of this I called BS I don’t believe it since 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 and that were well deserved and we utilized them wisely to stay alive during the pandemic so when I became aware of this I said nah it can’t hold true however when I dug around I even contacted us to my politician good friends Guv Senators they didn’t know about it I indicate 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 because you took the PPP also not real so let’s ask Josh why does no one know about the employee retention credit you know what’s fascinating you’re discussing the banks Kevin because 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 turmoil because remember in the initial cares act you might 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 anyone about how to.
do this does your CFO understand how to do this not really he or she’s never ever done it previously do the banks do it nope the banks don’t do it the payroll business yeah a few of them are doing it as a payroll business your accounting professional no your accountant’s never done this prior to unless you have an account that entered into this organization and bottom line my company Kevin has actually 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 companies so a great deal of our big huge business clients have actually dealt with bottom line to recover other government programs we’ve done sales tax and utilize tax joblessness tax work opportunity tax credits research and development tax credits unclaimed home property tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit developed to motivate.
employers to keep staff members on their payroll. The credit is 50% of approximately $10,000 in salaries paid by an.
employer whose organization is totally or partially suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is readily available to all employers despite size including tax exempt companies. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
companies who take Small Business Loans.
2. To certify, the company needs to satisfy one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s company is fully or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross receipts are listed below 50% of the similar quarter in 2019. As soon as the.
employer’s gross invoices exceed 80% of a similar quarter in 2019 they no longer certify.
after the end of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the qualifying earnings paid up to $10,000 in total.
It works for incomes paid after March 13th and before December 31, 2020.
The meaning of certifying earnings differs by whether a company had, typically, basically than.
100 workers in 2019.
Companies that concentrate on ERC filing support typically offer proficiency and support to help services browse the complex procedure of claiming the credit. They can offer various services, consisting of:.
How is the employee retention credit calculated? How Do We Receive The Employee Retention Credit
Eligibility Evaluation: These companies will evaluate your service’s eligibility for the ERC based on elements such as your industry, earnings, and operations. If you fulfill the requirements for the credit and identify the optimum credit amount you can claim, they can assist determine.
Documents and Calculation: ERC filing services will assist in collecting the required documentation, such as payroll records and financial declarations, to support your claim. They will likewise assist compute the credit quantity based on qualified incomes and other qualifying expenditures.
Retroactive Claim Review: If you are qualified to claim the ERC for previous quarters, these business can evaluate your previous payroll records and financials to recognize potential chances for retroactive credits. They can help you modify prior income tax return to claim these refunds.
Filing Support: Business concentrating on ERC filings will prepare and submit the needed forms and documentation on your behalf. This consists of completing Kind 941 or any other required tax forms.
Compliance and Updates: ERC regulations and guidance have actually progressed with time. These companies stay updated with the latest modifications and guarantee that your filings adhere to the most present standards. If the Internal revenue service demands additional details or performs an audit related to your ERC claim, they can likewise supply ongoing support.
It’s important to research and veterinarian any business using ERC filing help to guarantee their reliability and competence. 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 submitting support.
Bear in mind that while these business can supply valuable assistance, it’s constantly an excellent concept to have a basic understanding of the ERC requirements and procedure yourself. This will assist you make notified 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 steps. The goal of the ERC is to encourage companies to keep and pay their employees during the pandemic, even if their operations have been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is available to qualified companies, consisting of for-profit services, tax-exempt organizations, and certain governmental entities. To qualify, companies must fulfill one of two criteria:.
Business operations were fully or partially suspended due to a government order related to COVID-19.
Business experienced a substantial decrease in gross receipts. As discussed earlier, 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 substantial decrease is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019, or a 20% decrease in gross invoices 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 quantity is equal to a percentage (approximately 70%) of qualified wages paid to workers, consisting of particular 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, services that got an Income Defense Program (PPP) loan were not qualified 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. The exact same earnings can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively expanded and improved, permitting qualified companies to declare the credit for certified incomes paid as far back as March 13, 2020. This retroactive provision supplies a chance for services to modify prior-year tax returns and get refunds.
Claiming the Credit: Companies can declare the ERC by reporting it on their work tax returns, usually Form 941. The excess can be reimbursed to the employer if the credit exceeds the amount of work taxes owed.
It is very important to keep in mind that the ERC provisions and eligibility requirements have actually developed gradually. The best strategy is to talk to a tax professional or visit the main internal revenue service site for the most up-to-date and detailed info relating to the ERC, including any current legislative modifications or updates.
To receive the ERC, a company needs to fulfill among the following requirements:.
The business operations were completely or partially suspended due to a federal government order related to COVID-19.
The business experienced a considerable decline 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 considerable decrease is specified as a 20% decline 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.
The ERC is available to organizations of all sizes, including tax-exempt organizations, however there are some exceptions. For instance, federal government entities and services that got a PPP loan might have restrictions on declaring the credit.
The procedure for claiming the ERC includes finishing the required forms and including the credit on your work income tax return (normally Kind 941). The exact time it takes to process the credit can differ based on numerous elements, including the intricacy of your organization and the workload of the internal revenue service. It’s recommended to seek advice from a tax expert for guidance specific to your situation.
There are numerous business that can help with the procedure of claiming the ERC. Some popular business that use support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the information provided here is based upon basic knowledge and may not show the most current updates or modifications to the ERC. It’s important to consult with a tax expert or visit the official IRS website for the most current and accurate info relating to eligibility, declaring procedures, and available support.
Less than 100. If the employer had 100 or fewer employees on average in 2019, then the credit is based.
on salaries paid to all staff members whether they in fact worked or not. Simply put, even if the.
workers worked full time and got paid for full time work, the company still gets the credit.
Greater than 100. The credit is if the employer had more than 100 workers on average in 2019.
permitted only for incomes paid to staff members who did not work during the calendar quarter.
In both cases, “wages” includes not just money payments but likewise a part of the expense of company.
provided healthcare. How Do We Receive The Employee Retention Credit
Employers can be right away repaid for the credit by minimizing the amount of payroll taxes they.