Lets talk first about How Do You Qualify For Employee Retention Credit :
Our team here what do these men doing everyone in this space is helping teach individuals about ERC and uh constantly provide a beautiful breakfast and have individuals truly learn about the program we ought to 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 hundreds of countless dollars so these are duplicate copies of the letters that go to clients validating that the check is on the method I suggest you know if you simply start to take a look at some of these here I indicate this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s just I mean think of how many actual clients that went through the program yeah this is the very end this is the celebration at the end when the check is confirmed 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’re able to track it you understand when you
get this you understand the check is opted for sure which’s when they pay so they do not pay anything up until they really receive the cash they don’t pay bottom line Wonder trust anything up until this letter is confirmed the check is on the method they deposit it into their savings account and they can really rely on Wonder trust that the procedure has actually been completed and the number of you think you have actually processed since you began this we’re about 35 000 of these for
about 6 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 talking about something truly crucial today the employee retention credit which most of you have actually never heard of I definitely had not become aware of it up until extremely just recently and learned a lot about it due to the fact that this is most likely the most affordable expense of capital for any small company anywhere
anytime if you have workers in between five and five hundred so I’ve got the professional with me this is Josh Fox he’s the creator 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 call up your bank supervisor and state offer 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 have actually ended up being yes the Ambassador and paid representative for this I like this program it’s going away soon you got to find out all about it let’s talk worker retention credit Josh Fox what is an ERC let’s simply begin there so during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act provided companies 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically 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 alright go on sorry I simply need to ensure we got that point I imply that’s a big difference a loan versus cash cash I like money money that’s what we’re talking about 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 initial cares Act is the ERC and yes Kevin it is a beautiful tough check in the mail where you get real cash from the IRS all right so let’s talk about how it works because it seems like to me if it’s a if it’s worker retention credit that individual needed to be a staff member so I’m going to make the Assumption this cash is not for the owner not for individuals on the cap table not for investors it’s for staff members right you had to have owned a company but it’s based on you having W-2 workers 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 eligible 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 correct so there were six quarters the program was open well stroll us through the 6 quarters so you had quarters 2 three and four of 2020 and you had quarters one two and three of 2021. okay so that’s how it’s measured you have to be on the W-2 during that duration now let’s talk my favorite part cash just how much can you get back per staff member that was on a W-2 in those six quarters so the calculation in 2020 to be specific Kevin is 50 of the worker’s salary to a maximum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the employee’s income to an optimum of seven thousand per quarter how did that happen um they just altered the rules in.
2021 versus due to the fact that 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 as much as 5 thousand Max and after that what takes place 21 000 Max in 2021 oh that’s how you develop twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty 6 thousand dollars per worker that is because that’s a great deal of cash it is now there’s a caution 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 decrease 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 say hypothetically you owned a restaurant in New york city City where I’m from and you had a hundred workers and you took PPP cash you would still get a million dollar in the mail from the IRS so it’s huge undoubtedly now the big question is why does no one understand about this due to the fact that appearance when I first heard about this when I initially met Josh you understand I have actually got great deals of financial investments in great deals of companies I’m a major supporter for entrepreneurship in America and make lots of numerous investments in entrepreneurs of which numerous suffered through the pandemic when I first found out about this I called BS I do not believe it due to the fact that 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 which were well been worthy of and we used them carefully to stay alive during the pandemic so when I became aware of this I said nah it can’t be true however when I dug around I even contacted us to my politician pals Guv Senators they didn’t learn about it I suggest that’s how you know that’s how misinformation is that there’s no information out there then a bunch of people informed me well you can’t get it since you took the PPP also not true so let’s ask Josh why does nobody know about the employee retention credit you understand what’s interesting you’re speaking about the banks Kevin due to the fact that 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 huge 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 simply process procedure that’s all um and here there was chaos because keep in mind in the initial cares act you might refrain from doing both programs so if you had done PPP you could refrain from doing ERC in the original program and when they altered the law in 2021 the banks were refraining from doing ERC because it’s not alone so you’re getting a tax refund so the federal government never made it clear to any person about how to.
do this does your CFO know how to do this not really he or she’s never done it before do the banks do it nope the banks do not do it the payroll companies 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 company and bottom line my company Kevin has been in business considering that 2009 and we have actually been dealing with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 companies so a lot of our big huge corporate clients have dealt with bottom line to recuperate other government programs we have actually done sales tax and use tax unemployment tax work chance tax credits research and development tax credits unclaimed property property tax all of these other federal government programs.
The staff member retention tax credit is a broad based refundable tax credit designed to encourage.
companies to keep workers on their payroll. The credit is 50% of approximately $10,000 in incomes paid by an.
company whose service is completely or partly suspended because of COVID-19 or whose gross invoices.
decrease by more than 50%.
1. The credit is available to all companies no matter size including tax exempt companies. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
businesses who take Small company Loans.
2. To certify, the employer needs to satisfy one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s company is completely or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross receipts are below 50% of the comparable quarter in 2019. When the.
employer’s gross invoices exceed 80% of a comparable quarter in 2019 they no longer qualify.
after the end of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the qualifying earnings paid up to $10,000 in overall.
It is effective for incomes paid after March 13th and before December 31, 2020.
The meaning of certifying incomes differs by whether a company had, typically, more or less than.
100 workers in 2019.
Business that concentrate on ERC filing support generally supply proficiency and support to help services navigate the complex process of claiming the credit. They can provide different services, consisting of:.
How is the employee retention credit calculated? How Do You Qualify For Employee Retention Credit
Eligibility Evaluation: These business will evaluate your organization’s eligibility for the ERC based on factors such as your industry, earnings, and operations. If you fulfill the requirements for the credit and recognize the optimum credit quantity you can claim, they can assist determine.
Paperwork and Calculation: ERC filing services will help in gathering the required documents, such as payroll records and financial declarations, to support your claim. They will also assist determine the credit amount based upon qualified earnings and other certifying costs.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for previous quarters, these business can evaluate your past payroll records and financials to determine potential chances for retroactive credits. They can help you modify prior income tax return to declare these refunds.
Filing Help: Companies focusing on ERC filings will prepare and submit the needed kinds and documentation on your behalf. This includes finishing Form 941 or any other required tax forms.
Compliance and Updates: ERC regulations and guidance have evolved over time. These business stay updated with the current modifications and guarantee that your filings abide by the most current guidelines. They can likewise provide ongoing support if the IRS requests additional details or carries out an audit related to your ERC claim.
It’s important to research and veterinarian any company offering ERC filing assistance to ensure their credibility and know-how. Search for established companies with experience in tax and payroll services, or consider reaching out to trusted accounting companies or tax experts who provide ERC submitting support.
Bear in mind that while these business can supply important support, it’s constantly an excellent idea to have a standard understanding of the ERC requirements and process yourself. This will assist you make notified decisions and make sure accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief measures. The objective of the ERC is to motivate organizations to retain and pay their workers throughout the pandemic, even if their operations have actually been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to eligible employers, including for-profit services, tax-exempt organizations, and particular governmental entities. To qualify, employers must satisfy one of two criteria:.
The business operations were fully or partly suspended due to a government order related to COVID-19.
Business experienced a substantial decline in gross receipts. As discussed earlier, for 2021, a significant decrease is specified as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019, or a 20% decrease 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 amount amounts to a portion (approximately 70%) of qualified wages paid to workers, including specific health plan expenditures. The optimum 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 Security Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 permits services to claim the ERC even if they got a PPP loan. The exact same incomes can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and enhanced, enabling qualified companies to declare the credit for certified wages paid as far back as March 13, 2020. This retroactive arrangement provides an opportunity for organizations to amend prior-year income tax return and get refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their employment tax returns, normally Type 941. If the credit exceeds the amount of work taxes owed, the excess can be refunded to the employer.
It is very important to keep in mind that the ERC provisions and eligibility criteria have actually developed gradually. The best course of action is to speak with a tax expert or check out the official internal revenue service website for the most updated and in-depth info regarding the ERC, consisting of any recent legislative modifications or updates.
To receive the ERC, a company must meet one of the following criteria:.
The business operations were fully or partly suspended due to a government order related to COVID-19.
The business experienced a considerable decline in gross receipts. For 2021, a significant decline is defined as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a substantial decline is defined as a 20% decline in gross invoices compared to the very same quarter in 2019, or a 20% decrease in gross receipts compared to the right away preceding quarter.
The ERC is available to companies of all sizes, including tax-exempt companies, but there are some exceptions. For instance, federal government entities and services that got a PPP loan may have constraints on declaring the credit.
The process for claiming the ERC involves finishing the necessary types and consisting of the credit on your work tax return (usually Form 941). The exact time it requires 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 suggested to consult with a tax professional for guidance particular to your scenario.
There are numerous companies that can aid with the procedure of claiming the ERC. These consist of accounting companies, tax advisory services, and payroll company. Some widely known business that provide support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research study and call these business directly to inquire about their costs and services.
Please note that the information supplied here is based upon basic understanding and might not reflect the most current updates or changes to the ERC. It is essential to seek advice from a tax expert or visit the official IRS website for the most current and accurate details relating to eligibility, declaring procedures, and available support.
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 staff members whether they in fact worked or not. In other words, even if the.
employees worked full time and made money for full-time work, the company still gets the credit.
Greater than 100. The credit is if the employer had more than 100 staff members on average in 2019.
permitted just for incomes paid to employees who did not work during the calendar quarter.
In both cases, “earnings” includes not simply money payments however likewise a part of the cost of employer.
supplied health care. How Do You Qualify For Employee Retention Credit
Employers can be right away reimbursed for the credit by decreasing the quantity of payroll taxes they.