Lets talk first about What Is The Covid Employee Retention Credit :
Our team here what do these people doing everybody in this space is helping teach people about ERC and uh always provide a lovely breakfast and have people actually learn about the program we must head to the space where we have the ability to display a few of the checks that we are getting for business and I wish to see that what is this this is uh hundreds of countless dollars actually Kevin numerous millions of dollars so these are replicate copies of the letters that go to clients verifying that the check is on the method I mean you know if you simply start to 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 imply it’s just I suggest think of the number of 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 IRS heading to the customer so that’s how you’re able to track it you know when you
get this you know the check is opted for sure which’s when they pay so they don’t pay anything till they actually get the cash they don’t pay bottom line Wonder trust anything until this letter is validated the check is on the method they transfer it into their bank account and they can genuinely trust Wonder trust that the process has been ended up and the number of you think you have actually processed considering that you started this we have to do with 35 000 of these for
about 6 billion dollars wow so plainly they understand what they’re doing which’s what you need you require experts 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 Wonderful here you’re at my YouTube channel we’re discussing something really crucial today the employee retention credit which the majority of you have never ever become aware of I definitely had not heard of it till very just recently and discovered a lot about it due to the fact that this is most likely the lowest expense of capital for any small company anywhere
anytime if you have workers between 5 and five hundred so I’ve got the expert with me this is Josh Fox he’s the creator and CEO of bottom line Concepts they’re the biggest processor of these ERC credits this is a 170 page program so it’s challenging this isn’t like PPP we simply phone your bank manager and say provide me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to tell 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 very 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 throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act used businesses 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everyone it makes a huge difference right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the cash cash payroll tax refund okay go on sorry I just have to make certain we got that point I mean that’s a big distinction a loan versus money money I like money cash 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 gorgeous tough check in the mail where you get actual money from the IRS 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 individual had to be an employee 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 staff members right you had to have owned a company but it’s based upon you having W-2 workers 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 eligible so you have to be on payroll in 2020 on the W-2 and you need to be on payroll for the very first 6 months of 2021 on the W-2 appropriate so there were six quarters the program was open well walk us through the 6 quarters so you had quarters 2 three and 4 of 2020 and you had quarters one 2 and 3 of 2021. okay so that’s how it’s determined you have to be on the W-2 during that period now let’s talk my favorite part cash how much can you return per staff member that was on a W-2 in those six quarters so the calculation in 2020 to be exact Kevin is 50 of the employee’s income to a maximum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers escalated to 70 of the employee’s wage 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 mayhem of the pandemic so they wanted 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 takes place 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 six thousand dollars per worker that is since that’s a lot of cash it is now there’s a caution here the PPP cash would need to be reduced from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would reduce the 26 000 so what we’re seeing on average Kevin is if you took PPP cash somewhere around ten thousand dollars a person so let’s state hypothetically you owned a dining establishment in New York City where I’m from and you had a hundred staff members and you took PPP cash you would still get a million dollar in the mail from the IRS so it’s big obviously now the huge concern is why does nobody learn about this because appearance when I initially became aware of this when I initially satisfied Josh you understand I have actually got lots of financial investments in great deals of companies I’m a major advocate for entrepreneurship in America and make numerous many financial investments in entrepreneurs of which lots of suffered through the pandemic when I initially heard about this I called BS I do not think it since 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 wisely 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 called to my politician pals Guv Senators they didn’t know about it I indicate that’s how you know that’s how false information is that there’s no information out there then a lot of individuals told me well you can’t get it because you took the PPP likewise not true so let’s ask Josh why does nobody understand about the worker retention credit you understand what’s intriguing you’re talking about the banks Kevin because in the PPP loan procedure 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 huge 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 mayhem due to the fact that keep in mind in the original cares act you could not do both programs so if you had actually done PPP you could not do ERC in the original program and when they changed 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 federal government never ever made it clear to anyone about how to.
do this does your CFO know how to do this not actually he or she’s never done it previously do the banks do it nope the banks do not do it the payroll business yeah a few of them are doing it as a payroll business your accounting professional no your accountant’s never ever done this before unless you have an account that went into this organization and bottom line my company Kevin has stayed in business since 2009 and we’ve been working with the federal government and the state federal government to recuperate money for Fortune 500 Fortune 1000 business so a lot of our big big business clients have worked with bottom line to recover other government programs we have actually done sales tax and utilize tax unemployment tax work chance tax credits research and development tax credits unclaimed home real estate tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit created to encourage.
employers to keep staff members on their payroll. The credit is 50% of up to $10,000 in incomes paid by an.
employer whose company is totally or partially suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
1. The credit is available to all employers regardless of size consisting of tax exempt companies. 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 needs to satisfy one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s business is fully or partly suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross invoices are below 50% of the comparable quarter in 2019. Once the.
employer’s gross invoices exceed 80% of a similar quarter in 2019 they no longer qualify.
after completion of that quarter.
Computation of the Credit.
The quantity of the credit is 50% of the certifying earnings paid up to $10,000 in total.
It works for incomes paid after March 13th and before December 31, 2020.
The definition of qualifying earnings differs by whether an employer had, on average, more or less than.
100 employees in 2019.
Companies that specialize in ERC filing support typically provide expertise and support to assist businesses browse the intricate procedure of declaring the credit. They can offer numerous services, consisting of:.
How is the employee retention credit calculated? What Is The Covid Employee Retention Credit
Eligibility Assessment: These business will examine your service’s eligibility for the ERC based on factors such as your market, earnings, and operations. If you satisfy the requirements for the credit and determine the maximum credit quantity you can claim, they can assist identify.
Documentation and Estimation: ERC filing services will help in gathering the required documentation, such as payroll records and monetary declarations, to support your claim. They will likewise help compute the credit quantity based on eligible salaries and other certifying expenses.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for previous quarters, these business can review your previous payroll records and financials to recognize possible chances for retroactive credits. They can help you amend previous income tax return to claim these refunds.
Filing Support: Companies specializing in ERC filings will prepare and submit the required types and documents in your place. This consists of completing Form 941 or any other required tax return.
Compliance and Updates: ERC regulations and guidance have actually developed with time. These companies remain updated with the latest changes and make sure that your filings comply with the most current guidelines. If the IRS requests additional info or performs an audit associated to your ERC claim, they can also provide ongoing support.
It is very important to research and vet any company providing ERC filing help to guarantee their reliability and know-how. Try to find recognized firms with experience in tax and payroll services, or consider connecting to relied on accounting firms or tax specialists who offer ERC filing support.
Bear in mind that while these business can offer valuable help, it’s constantly an excellent idea to have a fundamental understanding of the ERC requirements and process yourself. This will help you make informed decisions and ensure accurate filings.
The Worker Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief procedures. The goal of the ERC is to motivate companies to maintain and pay their workers during the pandemic, even if their operations have been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to eligible employers, consisting of for-profit businesses, tax-exempt organizations, and specific governmental entities. To qualify, employers need to fulfill one of two requirements:.
Business operations were totally or partly suspended due to a federal government order related to COVID-19.
The business experienced a substantial decline in gross invoices. As pointed out previously, 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% decrease in gross invoices compared to the exact 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 percentage (approximately 70%) of certified earnings paid to workers, including specific health plan expenses. The maximum credit per staff member 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 Defense 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 got a PPP loan. The same wages can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively broadened and enhanced, permitting qualified employers to declare the credit for certified wages paid as far back as March 13, 2020. This retroactive provision provides a chance for companies to modify prior-year tax returns and get refunds.
Declaring the Credit: Employers can declare the ERC by reporting it on their employment tax returns, usually Form 941. The excess can be refunded to the employer if the credit exceeds the quantity of employment taxes owed.
It is essential to note that the ERC provisions and eligibility criteria have actually developed over time. The very best course of action is to talk to a tax professional or check out the official IRS website for the most detailed and updated details concerning the ERC, consisting of any current legal changes or updates.
To qualify for the ERC, a business needs to fulfill one of the following requirements:.
The business operations were completely or partially suspended due to a government order related to COVID-19.
Business experienced a substantial decline in gross receipts. For 2021, a substantial decline is specified as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decrease in gross invoices compared to the immediately preceding quarter.
The ERC is offered to organizations of all sizes, including tax-exempt organizations, however there are some exceptions. Government entities and organizations that received a PPP loan might have limitations on declaring the credit.
The process for claiming the ERC involves completing the necessary kinds and including the credit on your work tax return (typically Type 941). The exact time it requires to process the credit can differ based on a number of aspects, consisting of the complexity of your service and the work of the internal revenue service. It’s recommended to seek advice from a tax professional for guidance particular to your scenario.
There are numerous companies that can aid with the process of claiming the ERC. These include accounting companies, tax advisory services, and payroll provider. Some popular companies that use assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research and call these business directly to ask about their costs and services.
Please note that the information provided here is based upon general knowledge and may not show the most recent updates or modifications to the ERC. It is very important to consult with a tax professional or visit the official IRS site for the most current and precise details concerning eligibility, claiming treatments, and available support.
Less than 100. The credit is based if the company had 100 or less staff members on average in 2019.
on incomes paid to all employees whether they in fact worked or not. Simply put, even if the.
staff members worked full-time and made money for full time work, the company still gets the credit.
Greater than 100. If the company had more than 100 staff members on average in 2019, then the credit is.
enabled only for salaries paid to staff members who did not work during the calendar quarter.
In both cases, “earnings” includes not simply cash payments but also a portion of the expense of employer.
offered health care. What Is The Covid Employee Retention Credit
Companies can be instantly repaid for the credit by reducing the amount of payroll taxes they.