Lets talk first about Internal Revenue Bulletin Employee Retention Credit :
Our team here what do these people doing everybody in this room is helping teach individuals about ERC and uh constantly provide a stunning breakfast and have people actually discover the program we must head to the space where we are able to display a few of the checks that we are getting for business and I want to see that what is this this is uh numerous countless dollars literally Kevin hundreds of countless dollars so these are replicate copies of the letters that go to clients validating that the check is on the method I indicate you know if you simply begin to take a 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 imply think about the number of 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 internal revenue service heading to the customer so that’s how you’re able to track it you understand when you
receive this you understand the check is chosen sure which’s when they pay so they do not pay anything till they really receive the cash they don’t pay bottom line Wonder trust anything till this letter is verified the check is on the way they transfer it into their checking account and they can really rely on Wonder trust that the procedure has actually been finished and the number of you believe you’ve processed because you started this we have to do with 35 000 of these for
about six billion dollars wow so clearly they know what they’re doing which’s what you require you require professionals 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 Wonderful here you’re at my YouTube channel we’re discussing something actually crucial today the staff member retention credit which the majority of you have never ever become aware of I certainly had not heard of it till very recently and found out a lot about it due to the fact that this is probably the lowest cost of capital for any small company anywhere
anytime if you have staff members between five and five hundred so I have actually got the specialist 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 difficult this isn’t like PPP we simply call up your bank supervisor and state give 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 have actually ended up being yes the Ambassador and paid spokesperson for this I like this program it’s going away soon you got to learn all about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply start there so throughout the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act provided services 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everybody it makes a big difference right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
fix the money cash payroll tax refund alright go on sorry I just have to make sure we got that point I suggest that’s a huge distinction a loan versus cash cash I like money cash 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 gorgeous tough check in the mail where you get actual cash from the IRS all right so let’s talk about how it works due to the fact that it seems like to me if it’s a if it’s staff member 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 shareholders it’s for workers right you needed to have owned an organization however it’s based on you having W-2 workers in America not 10.99. so as long as you had W-2 workers 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 first six 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 4 of 2020 and you had quarters one 2 and 3 of 2021. okay 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 money just how much can you get back per employee that was on a W-2 in those six quarters so the estimation in 2020 to be specific Kevin is 50 of the staff member’s salary to an optimum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers escalated to 70 of the employee’s salary to an optimum of 7 thousand per quarter how did that occur um they simply changed the rules in.
2021 versus due to the fact that 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 up to 5 thousand Max and then what happens 21 000 Max in 2021 oh that’s how you create twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty 6 thousand dollars per employee that is since that’s a lot of cash it is now there’s a caution here the PPP money would need to be minimized 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 cash somewhere around ten thousand dollars a person so let’s say hypothetically you owned a restaurant 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 big clearly now the huge question is why does nobody know about this due to the fact that look when I first became aware of this when I first met Josh you understand I’ve got great deals of investments in great deals of business I’m a major advocate for entrepreneurship in America and make lots of lots of financial investments in entrepreneurs of which numerous suffered through the pandemic when I initially became aware of this I called BS I don’t believe it because I utilize 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 been worthy of and we utilized them carefully to stay alive during the pandemic so when I became aware of this I said nah it can’t hold true but when I dug around I even contacted us to my political leader good friends Guv Senators they didn’t understand 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 individuals told me well you can’t get it since you took the PPP likewise not true so let’s ask Josh why does no one understand about the employee retention credit you know what’s interesting you’re talking about the banks Kevin since in the PPP loan process the federal government made it very clear that if you wanted 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 process procedure that’s all um and here there was turmoil due to the fact that remember 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 changed 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 ever made it clear to anybody about how to.
do this does your CFO understand how to do this not actually she or he’s never done it in the past 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 company your accountant no your accountant’s never ever done this prior to unless you have an account that entered into this business and bottom line my company Kevin has actually stayed in business since 2009 and we’ve been dealing with the federal government and the state federal government to recuperate money for Fortune 500 Fortune 1000 business so a lot of our huge huge corporate customers have worked with bottom line to recuperate other government programs we have actually 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 federal government programs.
The staff member retention tax credit is a broad based refundable tax credit designed to motivate.
employers to keep workers on their payroll. The credit is 50% of as much as $10,000 in wages paid by an.
Since of COVID-19 or whose gross receipts, employer whose company is completely or partly suspended.
decrease by more than 50%.
1. The credit is available to all companies regardless of size including tax exempt companies. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) little.
organizations who take Small company Loans.
2. To qualify, the employer needs to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s company is totally or partly suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the similar quarter in 2019. Once the.
employer’s gross invoices exceed 80% of a comparable 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 wages paid up to $10,000 in total.
It is effective for salaries paid after March 13th and before December 31, 2020.
The meaning of certifying incomes varies by whether a company had, on average, more or less than.
100 staff members in 2019.
Business that focus on ERC filing support generally provide knowledge and support to help businesses navigate the complicated process of claiming the credit. They can use various services, including:.
How is the employee retention credit calculated? Internal Revenue Bulletin Employee Retention Credit
Eligibility Evaluation: These business will evaluate your organization’s eligibility for the ERC based on aspects such as your market, income, and operations. They can assist determine if you satisfy the requirements for the credit and recognize the maximum credit amount you can claim.
Documents and Calculation: ERC filing services will assist in collecting the essential paperwork, such as payroll records and financial statements, to support your claim. They will likewise assist calculate the credit quantity based upon qualified salaries and other qualifying costs.
Retroactive Claim Evaluation: If you are eligible to claim the ERC for prior quarters, these business can examine your past payroll records and financials to recognize possible opportunities for retroactive credits. They can assist you amend previous tax returns to declare these refunds.
Filing Support: Business specializing in ERC filings will prepare and submit the essential kinds and documentation on your behalf. This consists of finishing Type 941 or any other required tax forms.
Compliance and Updates: ERC policies and assistance have actually evolved gradually. These companies remain upgraded with the most recent changes and guarantee that your filings adhere to the most present standards. They can also supply ongoing support if the internal revenue service requests additional details or carries out an audit related to your ERC claim.
It is essential to research and veterinarian any business offering ERC filing assistance to ensure their trustworthiness and competence. Look for recognized companies with experience in tax and payroll services, or think about reaching out to relied on accounting companies or tax professionals who offer ERC submitting support.
Bear in mind that while these business can offer valuable help, it’s constantly a good concept to have a basic understanding of the ERC requirements and procedure yourself. This will help you make notified choices and guarantee accurate filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief measures. The goal of the ERC is to encourage services 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 eligible employers, including for-profit companies, tax-exempt companies, and certain governmental entities. To certify, companies must meet one of two criteria:.
Business operations were fully or partially suspended due to a government order related to COVID-19.
Business experienced a significant decrease in gross invoices. As mentioned previously, for 2021, a considerable decline is defined as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a considerable decline is defined 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 right away preceding quarter.
Credit Quantity: 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 (up to 70%) of certified earnings paid to employees, consisting of specific 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, organizations that got an Income Defense Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 permits businesses to declare the ERC even if they received a PPP loan. The exact same wages can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and enhanced, allowing eligible companies to declare the credit for certified incomes paid as far back as March 13, 2020. This retroactive arrangement provides a chance for businesses to modify prior-year tax returns and get refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their work income tax return, normally Type 941. The excess can be reimbursed to the employer if the credit surpasses the quantity of employment taxes owed.
It is essential to note that the ERC arrangements and eligibility requirements have progressed in time. The best course of action is to seek advice from a tax expert or check out the main IRS website for the most up-to-date and in-depth details concerning the ERC, including any current legal modifications or updates.
To get approved for the ERC, an organization must fulfill among the following requirements:.
Business operations were completely or partially suspended due to a federal government order related to COVID-19.
Business experienced a substantial decrease in gross receipts. For 2021, a substantial decline is defined as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decline in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
The ERC is readily available to services of all sizes, consisting of tax-exempt companies, but there are some exceptions. For instance, federal government entities and businesses that got a PPP loan might have restrictions on declaring the credit.
The process for declaring the ERC involves finishing the required kinds and including the credit on your work income tax return (usually Form 941). The exact time it requires to process the credit can vary based upon numerous aspects, including the complexity of your business and the work of the IRS. It’s advised to seek advice from a tax professional for guidance particular to your circumstance.
There are several companies that can help with the process of declaring the ERC. Some popular companies that use help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the details provided here is based upon basic understanding and may not show the most current updates or changes to the ERC. It’s important to consult with a tax expert or go to the official internal revenue service site for the most current and accurate details regarding eligibility, declaring treatments, and readily available support.
Less than 100. The credit is based if the employer had 100 or less staff members on average in 2019.
on earnings paid to all employees whether they really 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.
allowed only for salaries paid to staff members who did not work during the calendar quarter.
In both cases, “salaries” consists of not just money payments however likewise a portion of the expense of company.
offered health care. Internal Revenue Bulletin Employee Retention Credit
Employers can be instantly compensated for the credit by lowering the amount of payroll taxes they.