Lets talk first about What Is Non Refundable Employee Retention Credit :
Our group here what do these guys doing everybody in this space is helping teach individuals about ERC and uh constantly provide a gorgeous breakfast and have individuals really learn more about the program we need to head to the room where we are able to display some of the checks that we are getting for companies and I want to see that what is this this is uh numerous countless dollars actually Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to customers confirming that the check is on the way I mean you know if you simply start to take a look at a few of these here I indicate this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s simply I mean think about 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 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
get this you know the check is gone for sure which’s when they pay so they don’t pay anything until they really get the cash they do not pay bottom line Wonder trust anything until this letter is confirmed the check is on the method they transfer it into their checking account and they can really trust Wonder trust that the procedure has been finished and the number of you think you have actually processed because you began this we’re about 35 000 of these for
about 6 billion dollars wow so clearly they know what they’re doing which’s what you need 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 Fantastic here you’re at my YouTube channel we’re talking about something really important today the employee retention credit which most of you have never become aware of I certainly hadn’t become aware of it until really recently and found out a lot about it because this is most likely the lowest cost of capital for any small business anywhere
anytime if you have employees in between 5 and five hundred so I’ve got the professional with me this is Josh Fox he’s the founder and CEO of bottom line Principles 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 just call your bank manager and state provide 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 love this program it’s disappearing soon you got to discover everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply start there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act provided organizations three opportunities 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 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
remedy the cash cash payroll tax refund okay go on sorry I just have to make sure we got that point I imply that’s a huge difference a loan versus cash cash I like money cash that’s what we’re speaking 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 stunning tough check in the mail where you get real money from the IRS all right so let’s talk about how it works since it sounds 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 Presumption this money is not for the owner not for individuals on the cap table not for investors it’s for workers right you had to have owned an organization but it’s based on you having W-2 employees in America not 10.99. so as long as you had W-2 employees 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 have to be on payroll for the first 6 months of 2021 on the W-2 appropriate so there were 6 quarters the program was open well walk us through the 6 quarters so you had quarters 2 3 and 4 of 2020 and you had quarters one 2 and three of 2021. alright so that’s how it’s measured you need to be on the W-2 throughout that period now let’s talk my favorite part cash how much can you get back per employee that was on a W-2 in those 6 quarters so the calculation in 2020 to be exact Kevin is 50 of the employee’s income to an optimum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers increased to 70 of the staff member’s salary to a maximum of 7 thousand per quarter how did that happen um they just altered the rules in.
2021 versus because the chaos of the pandemic so they wished to even get more to keep those staff members on payroll 100 so if you can get 5 000 per person Max in twenty that was 50 in 2020 up to five thousand Max and after that what happens 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 six thousand dollars per employee that is because 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 lower the 26 000 so what we’re seeing on average Kevin is if you took PPP money someplace around ten thousand dollars a person so let’s state hypothetically you owned a dining establishment in New york city 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 IRS so it’s substantial clearly now the big question is why does nobody know about this since appearance when I first became aware of 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 lots of many investments in entrepreneurs of which lots of suffered through the pandemic when I initially heard about this I called BS I don’t think it due to the fact that I use the PPP we went through the money center Banks to get it it was very 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 throughout the pandemic so when I found out about this I said nah it can’t be true but when I dug around I even called to my politician buddies Guv Senators they didn’t learn about it I mean that’s how you know that’s how false information is that there’s no information out there then a lot of people 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 know about the employee retention credit you know what’s fascinating you’re speaking about the banks Kevin due to the fact that in the PPP loan procedure the federal government made it extremely clear that if you desired a PPP loan you would call Wells Fargo Citibank Bank of America any of the big 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 process procedure that’s all um and here there was turmoil since remember in the initial cares act you might not do both programs so if you had done PPP you might refrain from doing ERC in the initial program and when they altered 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 government never ever made it clear to anyone about how to.
do this does your CFO understand how to do this not actually she or he’s never done it previously 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 business your accounting professional no your accounting professional’s never done this before unless you have an account that went into this company and bottom line my company Kevin has stayed in business given that 2009 and we have actually been working with the federal government and the state government to recuperate money for Fortune 500 Fortune 1000 business so a lot of our huge big business customers have actually dealt with bottom line to recover other federal government programs we have actually done sales tax and utilize tax unemployment tax work opportunity tax credits research and development tax credits unclaimed property real estate tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit developed to encourage.
employers to keep workers on their payroll. The credit is 50% of approximately $10,000 in incomes paid by an.
employer whose business is totally or partially suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
1. The credit is readily available to all companies regardless of size including tax exempt companies. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
companies who take Small company Loans.
2. To qualify, the employer has to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s service is totally or partially suspended by 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.
company’s gross receipts go above 80% of a similar quarter in 2019 they no longer qualify.
after the end of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the certifying wages paid up to $10,000 in total.
It is effective for wages paid after March 13th and before December 31, 2020.
The meaning of qualifying incomes varies by whether a company had, typically, more or less than.
100 employees in 2019.
Companies that specialize in ERC filing help generally provide proficiency and assistance to assist businesses browse the intricate procedure of claiming the credit. They can provide various services, consisting of:.
How is the employee retention credit calculated? What Is Non Refundable Employee Retention Credit
Eligibility Assessment: These business will examine your service’s eligibility for the ERC based upon aspects such as your market, income, and operations. If you fulfill the requirements for the credit and determine the maximum credit amount you can declare, they can help identify.
Documentation and Calculation: ERC filing services will assist in gathering the required documentation, such as payroll records and monetary declarations, to support your claim. They will likewise assist compute the credit amount based upon eligible incomes and other certifying costs.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for previous quarters, these business can examine your past payroll records and financials to recognize possible chances for retroactive credits. They can help you change prior tax returns to claim these refunds.
Filing Help: Companies concentrating on ERC filings will prepare and send the needed kinds and documents in your place. This consists of completing Form 941 or any other necessary tax return.
Compliance and Updates: ERC regulations and guidance have progressed in time. These companies remain updated with the latest changes and guarantee that your filings adhere to the most present guidelines. If the Internal revenue service demands extra info or conducts an audit related to your ERC claim, they can likewise offer ongoing support.
It is necessary to research study and vet any company using ERC filing support to guarantee their credibility and expertise. Try to find recognized companies with experience in tax and payroll services, or think about reaching out to relied on accounting companies or tax professionals who provide ERC submitting support.
Remember that while these business can offer valuable assistance, it’s always an excellent concept to have a fundamental understanding of the ERC requirements and procedure yourself. This will help you make informed choices and guarantee accurate filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief steps. The objective of the ERC is to motivate services to keep and pay their staff members throughout the pandemic, even if their operations have been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is available to qualified companies, consisting of for-profit companies, tax-exempt organizations, and certain governmental entities. To certify, companies must meet one of two criteria:.
Business operations were fully or partly suspended due to a federal government order related to COVID-19.
The business experienced a significant decrease in gross receipts. As pointed out previously, for 2021, a significant decrease is specified as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decline 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 instantly preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount is equal to a percentage (as much as 70%) of certified earnings paid to workers, consisting of certain health plan expenditures. The optimum 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 an Income Protection Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 enables organizations to declare 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 Provision: The ERC has actually been retroactively expanded and enhanced, enabling eligible employers to claim the credit for certified earnings paid as far back as March 13, 2020. This retroactive arrangement offers a chance for organizations to amend prior-year income tax return and receive refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their work income tax return, usually Type 941. The excess can be reimbursed to the company if the credit exceeds the amount of employment taxes owed.
It’s important to note that the ERC provisions and eligibility requirements have evolved gradually. The very best course of action is to talk to a tax professional or go to the main IRS website for the most current and in-depth details regarding the ERC, including any current legislative changes or updates.
To qualify for the ERC, a company needs to satisfy among the following requirements:.
The business operations were fully or partially suspended due to a government order related to COVID-19.
The business experienced a substantial decline in gross invoices. For 2021, a significant 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 defined as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decline in gross invoices compared to the instantly preceding quarter.
The ERC is readily available to companies of all sizes, consisting of tax-exempt organizations, but there are some exceptions. For example, federal government entities and businesses that got a PPP loan may have limitations on declaring the credit.
The procedure for claiming the ERC involves finishing the needed forms and consisting of the credit on your employment tax return (usually Kind 941). The exact time it requires to process the credit can differ based upon numerous factors, consisting of the complexity of your organization and the workload of the IRS. It’s suggested to speak with a tax expert for assistance specific to your circumstance.
There are a number of companies that can help with the process of declaring the ERC. These consist of accounting firms, tax advisory services, and payroll provider. Some well-known business that offer assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research study and call these companies directly to inquire about their services and fees.
Please note that the information offered here is based on basic understanding and might not show the most current updates or modifications to the ERC. It’s important to consult with a tax expert or check out the official IRS site for the most current and precise info relating to eligibility, declaring procedures, and available help.
Less than 100. The credit is based if the company had 100 or less employees on average in 2019.
on incomes paid to all workers whether they in fact worked or not. To put it simply, even if the.
staff members worked full-time and earned money for full-time work, the company still gets the credit.
Greater than 100. If the employer had more than 100 workers usually in 2019, then the credit is.
enabled just for salaries paid to workers who did not work throughout the calendar quarter.
In both cases, “incomes” consists of not simply money payments but also a portion of the expense of employer.
supplied health care. What Is Non Refundable Employee Retention Credit
Employers can be right away repaid for the credit by reducing the quantity of payroll taxes they.