Lets talk first about What Is Nonrefundable Portion Of Employee Retention Credit :
Our group here what do these guys doing everybody in this room is helping teach people about ERC and uh always provide a beautiful breakfast and have people really find out about the program we must head to the space where we are able to show a few 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 literally Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to clients confirming that the check is on the method I indicate you understand if you just start 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 indicate 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 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’re able to track it you know when you
get this you know the check is gone for sure and that’s when they pay so they do not pay anything till they in fact 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 really trust Wonder trust that the process has actually been completed and how many you think you’ve processed given that you began this we’re about 35 000 of these for
about six billion dollars wow so clearly they understand what they’re doing and that’s what you require you need experts 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 talking about something truly essential today the worker retention credit which most of you have never ever become aware of I definitely hadn’t heard of it until very recently and found out a lot about it since this is most likely the lowest cost of capital for any small business anywhere
anytime if you have employees in between five and five hundred so I’ve got the expert 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 hard this isn’t like PPP we just phone 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 tell all of us about it and how to get it and why I’ve become yes the Ambassador and paid representative for this I love this program it’s disappearing soon you got to find out everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just begin there so during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act offered organizations 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody it makes a big distinction right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the money money payroll tax refund fine go on sorry I just have to ensure we got that point I suggest that’s a huge difference a loan versus money cash I like cash cash that’s what we’re discussing 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 original cares Act is the ERC and yes Kevin it is a stunning hard check in the mail where you get real money 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 worker retention credit that person had to be a worker so I’m going to make the Assumption this cash is not for the owner not for people on the cap table not for investors it’s for workers right you needed to have owned an organization however it’s based upon you having W-2 workers 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 qualified 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 appropriate so there were six quarters the program was open well stroll us through the 6 quarters so you had quarters 2 three and 4 of 2020 and you had quarters one two and 3 of 2021. all right so that’s how it’s determined you need to be on the W-2 throughout that duration now let’s talk my favorite part cash how much can you get back per staff member that was on a W-2 in those 6 quarters so the estimation in 2020 to be precise 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 happen um they just changed the rules in.
2021 versus due to the fact that the turmoil of the pandemic so they wished 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 approximately five thousand Max and after that what happens 21 000 Max in 2021 oh that’s how you come up with twenty 6 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 lot of money it is now there’s a caveat here the PPP money would have to be lowered 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 ten thousand dollars an individual 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 cash you would still get a million dollar in the mail from the internal revenue service so it’s substantial clearly now the big question is why does no one learn about this since appearance when I first became aware of this when I initially fulfilled Josh you know I’ve got great deals of investments in lots of business I’m a significant advocate for entrepreneurship in America and make many lots of financial investments in business owners of which many suffered through the pandemic when I first heard about this I called BS I do not think 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 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 but when I dug around I even called to my political leader friends Governor Senators they didn’t learn about it I indicate that’s how you know that’s how misinformation is that there’s no info out there then a bunch of individuals informed me well you can’t get it because you took the PPP also not true so let’s ask Josh why does no one learn 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 procedure the federal government made it really 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 mayhem since keep in mind in the original cares act you could 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 not doing ERC since it’s not alone so you’re getting a tax refund so the government never made it clear to anybody about how to.
do this does your CFO understand how to do this not actually he or she’s never done it in the past 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 accountant’s never ever done this prior to unless you have an account that entered into this company and bottom line my company Kevin has stayed 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 business so a lot of our huge huge business clients have worked with bottom line to recover other government programs we have actually done sales tax and utilize tax unemployment tax work opportunity tax credits research and development tax credits unclaimed home property tax all of these other government programs.
The staff member retention tax credit is a broad based refundable tax credit created to motivate.
employers to keep workers on their payroll. The credit is 50% of as much as $10,000 in incomes paid by an.
employer whose service is fully or partly suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
1. The credit is offered to all companies regardless of size consisting of tax exempt organizations. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
organizations who take Small company Loans.
2. To qualify, the company needs to satisfy one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s company is completely or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are below 50% of the comparable quarter in 2019. As soon as the.
company’s gross receipts exceed 80% of a similar quarter in 2019 they no longer certify.
after the end of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the certifying salaries 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 wages differs by whether an employer had, typically, basically than.
100 workers in 2019.
Business that focus on ERC filing support generally supply competence and assistance to assist services browse the complicated process of claiming the credit. They can use various services, including:.
How is the employee retention credit calculated? What Is Nonrefundable Portion Of Employee Retention Credit
Eligibility Evaluation: These business will assess your business’s eligibility for the ERC based on elements such as your industry, earnings, and operations. If you satisfy the requirements for the credit and determine the optimum credit amount you can declare, they can assist figure out.
Documentation and Estimation: ERC filing services will help in collecting the necessary paperwork, such as payroll records and financial declarations, to support your claim. They will likewise assist determine the credit amount based upon qualified incomes and other certifying expenses.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for previous quarters, these business can evaluate your previous payroll records and financials to identify potential opportunities for retroactive credits. They can help you change prior income tax return to claim these refunds.
Filing Help: Companies concentrating on ERC filings will prepare and submit the essential forms and documents on your behalf. This includes completing Type 941 or any other required tax forms.
Compliance and Updates: ERC regulations and assistance have evolved in time. These business remain updated with the current changes and guarantee that your filings adhere to the most existing guidelines. If the IRS requests additional details or conducts an audit associated to your ERC claim, they can likewise offer ongoing support.
It is very important to research study and vet any company offering ERC filing help to ensure their credibility and proficiency. Search for recognized companies with experience in tax and payroll services, or consider connecting to relied on accounting firms or tax experts who offer ERC submitting assistance.
Keep in mind that while these business can provide important support, it’s always an excellent concept to have a basic understanding of the ERC requirements and process yourself. This will help you make notified choices and make sure precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief steps. The objective of the ERC is to encourage services to retain and pay their employees during the pandemic, even if their operations have actually been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is available to eligible companies, including for-profit organizations, tax-exempt organizations, and certain governmental entities. To qualify, companies need to satisfy one of two requirements:.
The business operations were totally or partially suspended due to a federal government order related to COVID-19.
The business experienced a substantial decline in gross invoices. As pointed out earlier, for 2021, a considerable decrease is specified as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019, or a 20% decline in gross invoices 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 (up to 70%) of certified salaries paid to workers, including particular health insurance costs. The optimum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, businesses that received a Paycheck Protection Program (PPP) loan were not eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 permits companies to claim the ERC even if they received a PPP loan. Nevertheless, the exact same wages can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and improved, permitting eligible employers to declare the credit for certified earnings paid as far back as March 13, 2020. This retroactive provision supplies an opportunity for organizations to change prior-year income tax return and get refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their work income tax return, typically Form 941. The excess can be refunded to the company if the credit goes beyond the quantity of work taxes owed.
It is essential to keep in mind that the ERC arrangements and eligibility requirements have actually developed over time. The very best course of action is to talk to a tax expert or go to the main IRS site for the most current and detailed information relating to the ERC, including any current legal modifications or updates.
To receive the ERC, a service must meet one of the following requirements:.
Business operations were fully or partially suspended due to a government order related to COVID-19.
The business experienced a substantial decrease in gross invoices. For 2021, a significant decrease is defined as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a substantial decline is specified as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decrease in gross receipts compared to the immediately preceding quarter.
The ERC is offered to companies of all sizes, consisting of tax-exempt organizations, but there are some exceptions. For instance, federal government entities and organizations that received a PPP loan might have constraints on declaring the credit.
The process for declaring the ERC includes completing the needed kinds and consisting of the credit on your work income tax return (generally Form 941). The exact time it requires to process the credit can vary based upon a number of elements, consisting of the intricacy of your company and the work of the IRS. It’s suggested to speak with a tax expert for assistance particular to your situation.
There are several companies that can assist with the process of claiming the ERC. Some well-known business that provide assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the info provided here is based on basic understanding and might not reflect the most recent updates or modifications to the ERC. It is necessary to seek advice from a tax professional or check out the official IRS website for the most precise and current info regarding eligibility, claiming treatments, and offered support.
Less than 100. If the company had 100 or less workers usually in 2019, then the credit is based.
on earnings paid to all workers whether they really worked or not. Simply put, even if the.
staff members worked full time and got paid for full time work, the employer still gets the credit.
Greater than 100. If the company had more than 100 workers usually in 2019, then the credit is.
allowed only for incomes paid to workers who did not work throughout the calendar quarter.
In both cases, “wages” consists of not just money payments but also a part of the expense of employer.
offered healthcare. What Is Nonrefundable Portion Of Employee Retention Credit
Companies can be immediately reimbursed for the credit by reducing the quantity of payroll taxes they.