Lets talk first about Who Can Claim Employee Retention Credit :
Our group here what do these men doing everybody in this space is assisting teach individuals about ERC and uh constantly offer a lovely breakfast and have people really find out about the program we must head to the room where we have the ability to show some of the checks that we are getting for business and I wish to see that what is this this is uh hundreds of millions of dollars actually Kevin hundreds of countless dollars so these are duplicate copies of the letters that go to customers verifying that the check is on the method I imply you know if you simply 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 suggest it’s simply I mean think of the number of actual clients that went through the program yeah this is the very end this is the party 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 customer so that’s how you have the ability to track it you know when you
receive this you know the check is gone for sure and that’s when they pay so they don’t pay anything till they in fact get the money they don’t pay bottom line Wonder trust anything until this letter is confirmed the check is on the way they transfer it into their savings account and they can really trust Wonder trust that the procedure has been completed and how many you believe you’ve processed considering that you started this we have to do with 35 000 of these for
about 6 billion dollars wow so clearly they know what they’re doing which’s what you need you need professionals 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 Fantastic here you’re at my YouTube channel we’re discussing something actually important today the employee retention credit which most of you have never become aware of I certainly hadn’t become aware of it up until really just recently and learned a lot about it since this is most likely the most affordable cost of capital for any small business anywhere
anytime if you have staff members in between five and five hundred so I’ve 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 challenging this isn’t like PPP we simply contact 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 spokesperson for this I like this program it’s going away very soon you got to find out all about it let’s talk employee retention credit Josh Fox what is an ERC let’s just begin there so throughout the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act provided businesses 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 huge distinction right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
fix the cash cash payroll tax refund fine go on sorry I just have to make certain we got that point I imply that’s a huge distinction a loan versus money cash I like money money that’s what we’re discussing 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 difficult check in the mail where you get real money from the IRS all right so let’s discuss how it works since 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 people on the cap table not for shareholders it’s for workers right you needed to have actually owned an organization but it’s based upon you having W-2 staff members 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 eligible so you have to be on payroll in 2020 on the W-2 and you need to be on payroll for the first 6 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 four of 2020 and you had quarters one two and three of 2021. fine so that’s how it’s measured you have to be on the W-2 during that period now let’s talk my preferred part cash how much can you get back per worker that was on a W-2 in those six quarters so the estimation in 2020 to be exact Kevin is 50 of the employee’s income to a maximum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s salary to a maximum of seven thousand per quarter how did that take place um they just altered the rules in.
2021 versus because 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 occurs 21 000 Max in 2021 oh that’s how you come up with twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty 6 thousand dollars per staff member that is because that’s a great deal of money it is now there’s a caveat here the PPP cash would need to be decreased 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 on average Kevin is if you took PPP money somewhere around ten thousand dollars an individual so let’s say hypothetically you owned a restaurant in New york city 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 IRS so it’s huge certainly now the huge concern is why does nobody learn about this since look when I first heard about this when I initially satisfied Josh you know I have actually got great deals of investments in great deals of companies I’m a major advocate for entrepreneurship in America and make many many investments in entrepreneurs of which many 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 extremely easy to do we had our CEOs call the banks they got their loans which were well deserved and we used them sensibly to stay alive 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 contacted us to my politician good friends Guv Senators they didn’t know about it I suggest that’s how you understand that’s how misinformation is that there’s no details out there then a lot of people 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 understand about the worker retention credit you know what’s interesting you’re speaking about the banks Kevin since 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 big banks in our nation 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 mayhem since remember in the initial cares act you might not do both programs so if you had actually 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 due to the fact that it’s not alone so you’re getting a tax refund so the federal government never made it clear to any person about how to.
do this does your CFO know how to do this not truly she or he’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 business your accountant no your accountant’s never done this prior to unless you have an account that entered into this business and bottom line my company Kevin has stayed in business since 2009 and we have actually been dealing with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 companies so a great deal of our big huge corporate customers have actually worked with bottom line to recuperate other government programs we’ve done sales tax and utilize tax joblessness tax work opportunity tax credits research and development tax credits unclaimed home real estate tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit created to encourage.
employers to keep workers on their payroll. The credit is 50% of up to $10,000 in earnings paid by an.
Because of COVID-19 or whose gross invoices, employer whose service is totally or partly suspended.
decrease by more than 50%.
1. The credit is available to all companies regardless of size including tax exempt organizations. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
businesses who take Small Business Loans.
2. To certify, the employer has to meet 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 receipts are listed below 50% of the similar quarter in 2019. When the.
employer’s gross invoices exceed 80% of a comparable quarter in 2019 they no longer certify.
after completion of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the certifying salaries paid up to $10,000 in overall.
It works for earnings paid after March 13th and prior to December 31, 2020.
The definition of qualifying incomes differs by whether an employer had, on average, basically than.
100 staff members in 2019.
Business that focus on ERC filing support normally offer know-how and support to help companies navigate the complex process of claiming the credit. They can use various services, consisting of:.
How is the employee retention credit calculated? Who Can Claim Employee Retention Credit
Eligibility Evaluation: These business will assess your company’s eligibility for the ERC based on factors such as your market, profits, and operations. They can assist identify if you meet the requirements for the credit and identify the optimum credit quantity you can claim.
Documents and Calculation: ERC filing services will assist in collecting the essential paperwork, such as payroll records and monetary statements, to support your claim. They will likewise assist determine the credit quantity based upon eligible incomes and other qualifying costs.
Retroactive Claim Review: If you are qualified to claim the ERC for previous quarters, these business can review your previous payroll records and financials to identify prospective opportunities for retroactive credits. They can help you modify previous income tax return to declare these refunds.
Filing Assistance: Companies focusing on ERC filings will prepare and submit the necessary types and documents in your place. This consists of finishing Form 941 or any other necessary tax forms.
Compliance and Updates: ERC regulations and guidance have evolved gradually. These companies stay updated with the current modifications and ensure that your filings adhere to the most current guidelines. They can likewise supply ongoing support if the internal revenue service requests additional details or performs an audit related to your ERC claim.
It is very important to research study and veterinarian any business offering ERC filing assistance to guarantee their reliability and knowledge. Try to find recognized firms with experience in tax and payroll services, or think about connecting to trusted accounting firms or tax professionals who offer ERC filing assistance.
Bear in mind that while these companies can offer valuable help, it’s constantly an excellent idea to have a basic understanding of the ERC requirements and process yourself. This will assist you make informed choices and ensure accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief measures. The goal of the ERC is to encourage services to maintain and pay their staff members during the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to eligible employers, including for-profit businesses, tax-exempt companies, and certain governmental entities. To qualify, companies should meet one of two criteria:.
The business operations were completely or partly suspended due to a federal government order related to COVID-19.
Business experienced a significant decrease in gross invoices. As mentioned previously, for 2021, a significant decrease is defined as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decline in gross invoices compared to the very same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit amount amounts to a portion (up to 70%) of certified wages paid to employees, consisting of specific health insurance expenses. The maximum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, companies that received an Income Protection Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 permits services to declare the ERC even if they received a PPP loan. Nevertheless, the very same earnings can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and boosted, enabling eligible employers to declare the credit for certified salaries paid as far back as March 13, 2020. This retroactive provision supplies a chance for companies to modify prior-year income tax return and receive refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their work tax returns, usually Kind 941. If the credit surpasses the amount of work taxes owed, the excess can be refunded to the company.
It is essential to note that the ERC provisions and eligibility criteria have actually developed in time. The best course of action is to talk to a tax professional or visit the main IRS website for the most comprehensive and updated info regarding the ERC, including any current legislative modifications or updates.
To get approved for the ERC, a company should satisfy one of the following requirements:.
Business operations were completely or partly suspended due to a government order related to COVID-19.
The business experienced a considerable decrease in gross invoices. For 2021, a considerable decrease is defined as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019, or a 20% decrease in gross invoices compared to the right away preceding quarter.
The ERC is readily available to organizations of all sizes, including tax-exempt companies, but there are some exceptions. Government entities and organizations that received a PPP loan may have constraints on claiming the credit.
The procedure for declaring the ERC includes finishing the necessary forms and consisting of the credit on your work tax return (generally Form 941). The exact time it takes to process the credit can vary based on a number of factors, consisting of the complexity of your company and the work of the internal revenue service. It’s suggested to speak with a tax professional for assistance particular to your scenario.
There are several companies that can assist with the procedure of claiming the ERC. These consist of accounting firms, tax advisory services, and payroll company. Some widely known business that provide support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research and call these companies straight to ask about their services and fees.
Please note that the information offered here is based on basic knowledge and may not show the most current updates or modifications to the ERC. It is necessary to speak with a tax professional or go to the official internal revenue service site for the most accurate and current details relating to eligibility, claiming procedures, and readily available assistance.
Less than 100. The credit is based if the company had 100 or less staff members on average in 2019.
on salaries paid to all employees whether they actually worked or not. In other words, even if the.
staff members 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 employees on average in 2019.
permitted just for incomes paid to staff members who did not work throughout the calendar quarter.
In both cases, “salaries” includes not simply cash payments however likewise a part of the expense of employer.
offered health care. Who Can Claim Employee Retention Credit
Companies can be right away repaid for the credit by lowering the quantity of payroll taxes they.