Lets talk first about Understanding The Employee Retention Credit :
Our team here what do these men doing everyone in this space is helping teach individuals about ERC and uh constantly supply a stunning breakfast and have individuals really learn more about the program we ought to head to the room where we are able 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 countless dollars actually Kevin hundreds of millions of dollars so these are duplicate copies of the letters that go to clients confirming that the check is on the method I mean you know if you just begin to take a look at a few 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 consider 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 verified the numbers are verified 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 know when you
receive this you know the check is chosen sure and that’s when they pay so they don’t pay anything up until they really receive the cash they do not pay bottom line Wonder trust anything up until this letter is validated the check is on the way they transfer it into their bank account and they can genuinely rely on Wonder trust that the procedure has actually been completed and the number of you think you’ve processed considering that you started this we have to do with 35 000 of these for
about 6 billion dollars wow so plainly they know what they’re doing and that’s what you require you require 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 essential today the employee retention credit which the majority of you have never ever become aware of I certainly hadn’t become aware of it until very recently and learned a lot about it because this is most likely the lowest cost 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 Concepts they’re the largest processor of these ERC credits this is a 170 page program so it’s difficult this isn’t like PPP we simply phone your bank manager and state provide me a loan it does not 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 enjoy this program it’s going away very soon you got to learn everything 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 used services three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everyone it makes a big difference right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the money cash payroll tax refund alright go on sorry I simply need to make sure we got that point I indicate that’s a huge distinction a loan versus cash money I like money money that’s what we’re speaking about fine 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 tough check in the mail where you get real cash from the IRS all right so let’s discuss how it works due to the fact that it sounds like to me if it’s a if it’s employee retention credit that individual needed to be a staff member so I’m going to make the Presumption this money is not for the owner not for people on the cap table not for shareholders it’s for workers right you needed to have owned a company but it’s based on you having W-2 staff members in America not 10.99. As long as you had W-2 staff members 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 proper so there were 6 quarters the program was open well walk us through the six quarters so you had quarters two three and 4 of 2020 and you had quarters one two and 3 of 2021. fine so that’s how it’s measured you need to be on the W-2 during that period now let’s talk my favorite part cash how much can you return per employee that was on a W-2 in those 6 quarters so the calculation in 2020 to be specific Kevin is 50 of the staff member’s income to a maximum of 5 thousand dollars per staff member for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the worker’s wage to an optimum of 7 thousand per quarter how did that take place um they simply altered the rules in.
2021 versus because 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 five thousand Max and then what takes place 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 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 reduced from the twenty six 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 workers and you took PPP money you would still get a million dollar in the mail from the IRS so it’s substantial clearly now the huge concern is why does no one learn about this since appearance when I first found out about this when I first satisfied Josh you understand I have actually got great deals of investments in great deals of companies I’m a significant advocate for entrepreneurship in America and make many lots of investments in entrepreneurs of which numerous suffered through the pandemic when I initially found out about this I called BS I do not think it because I use the PPP we went through the cash 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 sensibly to survive 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 called to my political leader good friends Governor Senators they didn’t know about it I suggest that’s how you understand that’s how false information is that there’s no details out there then a bunch of individuals informed me well you can’t get it due to the fact that you took the PPP also not true so let’s ask Josh why does nobody learn about the staff member retention credit you know what’s fascinating you’re speaking about the banks Kevin since in the PPP loan process the federal government made it really 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 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 because keep in mind in the original cares act you might not do both programs so if you had done PPP you could refrain from doing ERC in the initial program and when they altered the law in 2021 the banks were not doing ERC since it’s not alone so you’re getting a tax refund so the government never ever made it clear to anybody about how to.
do this does your CFO know how to do this not really he or she’s never ever done it before do the banks do it nope the banks don’t 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 done this before unless you have an account that entered into this business 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 federal government to recuperate cash for Fortune 500 Fortune 1000 companies so a great deal of our huge huge business clients have worked with bottom line to recuperate other government programs we have actually done sales tax and use tax unemployment tax work opportunity tax credits research and development tax credits unclaimed home real estate tax all of these other federal government programs.
The staff member retention tax credit is a broad based refundable tax credit created to motivate.
employers to keep employees on their payroll. The credit is 50% of as much as $10,000 in incomes paid by an.
employer whose service is fully or partially suspended because of COVID-19 or whose gross invoices.
decrease by more than 50%.
1. The credit is available to all companies regardless of size consisting of tax exempt organizations. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) little.
companies who take Small Business Loans.
2. To certify, the company has to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s organization is completely or partly suspended by government order due to COVID-19.
during the calendar quarter or.
o the company’s gross receipts are listed below 50% of the comparable quarter in 2019. Once the.
employer’s gross receipts go above 80% of a comparable 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 earnings paid up to $10,000 in overall.
It is effective for salaries paid after March 13th and prior to December 31, 2020.
The meaning of qualifying earnings varies by whether a company had, on average, more or less than.
100 workers in 2019.
Companies that specialize in ERC filing help generally provide know-how and support to assist services browse the complicated procedure of claiming the credit. They can offer different services, including:.
How is the employee retention credit calculated? Understanding The Employee Retention Credit
Eligibility Assessment: These companies will examine your service’s eligibility for the ERC based upon factors such as your market, earnings, and operations. They can assist determine if you meet the requirements for the credit and determine the maximum credit amount you can declare.
Paperwork and Computation: ERC filing services will help in collecting the necessary documentation, such as payroll records and monetary declarations, to support your claim. They will also assist determine the credit amount based upon qualified salaries and other certifying expenditures.
Retroactive Claim Review: If you are qualified to claim the ERC for prior quarters, these business can review your past payroll records and financials to determine potential opportunities for retroactive credits. They can help you amend previous tax returns to declare these refunds.
Filing Support: Business specializing in ERC filings will prepare and send the required kinds and documents on your behalf. This includes completing Form 941 or any other required tax return.
Compliance and Updates: ERC guidelines and guidance have actually progressed with time. These business stay updated with the current changes and guarantee that your filings adhere to the most existing guidelines. They can also provide ongoing support if the internal revenue service requests additional details or performs an audit related to your ERC claim.
It is essential to research and veterinarian any company offering ERC filing assistance to ensure their credibility and knowledge. Search for established firms with experience in tax and payroll services, or think about reaching out to relied on accounting firms or tax specialists who use ERC filing support.
Bear in mind that while these companies can offer important support, it’s constantly a great concept to have a standard understanding of the ERC requirements and procedure yourself. This will assist you make notified choices and make sure 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 procedures. The goal of the ERC is to motivate businesses to keep and pay their employees during the pandemic, even if their operations have actually been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is available to eligible companies, including for-profit companies, tax-exempt organizations, and certain governmental entities. To certify, employers need to satisfy one of two requirements:.
Business operations were fully or partially suspended due to a government order related to COVID-19.
Business experienced a significant decline in gross invoices. As pointed out earlier, for 2021, a substantial decrease is specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a significant decrease is specified 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 immediately 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 portion (approximately 70%) of certified wages paid to workers, consisting of specific health plan costs. The maximum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, businesses that received an Income Defense Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 permits organizations to claim the ERC even if they received a PPP loan. Nevertheless, the exact same earnings can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and enhanced, enabling eligible companies to claim the credit for qualified wages paid as far back as March 13, 2020. This retroactive provision offers an opportunity for services to modify prior-year income tax return and get refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their employment tax returns, generally Type 941. The excess can be refunded to the company if the credit surpasses the amount of work taxes owed.
It is essential to keep in mind that the ERC provisions and eligibility requirements have evolved over time. The very best course of action is to talk to a tax professional or check out the official internal revenue service site for the most comprehensive and current information relating to the ERC, including any recent legal changes or updates.
To qualify for the ERC, a service must meet among the following requirements:.
Business operations were fully or partly suspended due to a federal government order related to COVID-19.
The business experienced a considerable decline in gross invoices. For 2021, a substantial decrease is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a significant decrease is specified 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.
The ERC is readily available to companies of all sizes, including tax-exempt organizations, but there are some exceptions. Federal government entities and services that got a PPP loan might have restrictions on declaring the credit.
The process for claiming the ERC involves completing the necessary types and including the credit on your work income tax return (generally Kind 941). The exact time it requires to process the credit can differ based on numerous aspects, consisting of the intricacy of your company and the workload of the internal revenue service. It’s recommended to consult with a tax professional for guidance specific to your circumstance.
There are several business that can assist with the process of claiming the ERC. Some popular business that provide assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the details offered here is based on general knowledge and might not show the most current updates or changes to the ERC. It’s important to consult with a tax expert or visit the official internal revenue service website for the most precise and updated information relating to eligibility, declaring procedures, and offered help.
Less than 100. If the company had 100 or less staff members typically in 2019, then the credit is based.
on incomes paid to all employees whether they really worked or not. Simply put, even if the.
employees worked full-time and earned money for full time work, the employer still gets the credit.
Greater than 100. The credit is if the employer had more than 100 workers on average in 2019.
enabled only for earnings paid to workers who did not work during the calendar quarter.
In both cases, “salaries” consists of not just money payments but likewise a portion of the cost of employer.
offered healthcare. Understanding The Employee Retention Credit
Employers can be instantly compensated for the credit by reducing the quantity of payroll taxes they.