Lets talk first about Eligibility Requirements For Employee Retention Credit :
Our group here what do these guys doing everybody in this room is assisting teach individuals about ERC and uh constantly provide a lovely breakfast and have people truly learn about the program we need to head to the room where we are able to display 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 countless dollars literally Kevin numerous millions of dollars so these are replicate copies of the letters that go to customers confirming that the check is on the way I imply you understand if you simply begin to look at some of these here I imply this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I imply it’s just I indicate think about how many actual customers that went through the program yeah this is the very end this is the celebration at the end when the check is confirmed 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’re able to track it you understand when you
receive this you know the check is opted for sure and that’s when they pay so they don’t pay anything until 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 deposit it into their savings account and they can truly trust Wonder trust that the procedure has actually been finished and how many you believe you have actually processed because you began this we’re about 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 Fantastic here you’re at my YouTube channel we’re talking about something truly essential today the staff member retention credit which most of you have actually never become aware of I definitely had not become aware of it up until really recently and found out a lot about it because this is probably the most affordable cost of capital for any small company anywhere
anytime if you have workers between five and five hundred so I’ve got the expert with me this is Josh Fox he’s the founder and CEO of bottom line Principles they’re the biggest processor of these ERC credits this is a 170 page program so it’s difficult this isn’t like PPP we simply 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 tell us all about it and how to get it and why I’ve ended up being yes the Ambassador and paid representative for this I enjoy this program it’s going away soon you got to learn everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just start there so throughout the Trump Administration when President Trump was enacted they developed the cares Act and the cares act offered 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 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 money payroll tax refund all right go on sorry I simply need to ensure we got that point I mean that’s a huge distinction a loan versus cash money I like money cash that’s what we’re talking 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 difficult check in the mail where you get real money from the internal revenue service all right so let’s speak about how it works since it sounds like to me if it’s a if it’s worker retention credit that individual needed to be an employee so I’m going to make the Assumption this money is not for the owner not for individuals on the cap table not for shareholders it’s for workers right you needed to have owned a business however it’s based on 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 first 6 months of 2021 on the W-2 correct so there were 6 quarters the program was open well walk us through the six quarters so you had quarters two 3 and 4 of 2020 and you had quarters one two and 3 of 2021. okay 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 return per worker that was on a W-2 in those six quarters so the calculation in 2020 to be precise Kevin is 50 of the worker’s wage to a maximum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the worker’s income to a maximum of seven thousand per quarter how did that occur um they simply altered the rules in.
2021 versus due to the fact that the mayhem 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 up to five thousand Max and then what occurs 21 000 Max in 2021 oh that’s how you develop twenty 6 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 since that’s a lot of cash it is now there’s a caveat here the PPP money would have to be lowered 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 somewhere around ten thousand dollars an individual so let’s state hypothetically you owned a restaurant 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 IRS so it’s substantial clearly now the huge question is why does no one understand about this because look when I first found out about this when I first met Josh you understand I have actually got great deals of financial investments in great deals of business I’m a major advocate for entrepreneurship in America and make numerous lots of investments in entrepreneurs of which lots of suffered through the pandemic when I initially heard about this I called BS I don’t believe it since 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 and that were well should have and we utilized them sensibly to survive during the pandemic so when I heard about this I stated nah it can’t be true but when I dug around I even contacted us to my politician pals Governor Senators they didn’t learn about it I imply that’s how you know that’s how misinformation is that there’s no information out there then a lot of individuals told me well you can’t get it due to the fact that you took the PPP also not real so let’s ask Josh why does no one understand about the staff member retention credit you know what’s interesting you’re discussing the banks Kevin due to the fact that in the PPP loan process 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 just procedure procedure that’s all um and here there was mayhem due to the fact that keep in mind in the initial cares act you could refrain from doing both programs so if you had actually done PPP you could not do ERC in the original program and when they altered the law in 2021 the banks were not doing ERC because it’s not alone so you’re getting a tax refund so the federal government never made it clear to anybody about how to.
do this does your CFO understand how to do this not truly 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 company your accounting professional no your accountant’s never done this before unless you have an account that entered into this company and bottom line my firm Kevin has actually stayed in business because 2009 and we’ve been working with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 business so a lot of our big big corporate customers have dealt with bottom line to recover other federal government programs we have actually done sales tax and utilize tax joblessness 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.
companies to keep staff members on their payroll. The credit is 50% of up to $10,000 in incomes paid by an.
employer whose organization is fully or partially suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
1. The credit is offered to all employers regardless of size including tax exempt organizations. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) small.
services who take Small company Loans.
2. To qualify, the company needs to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s company is completely or partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the company’s gross invoices are listed below 50% of the similar quarter in 2019. As soon as the.
company’s gross invoices go above 80% of an equivalent 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 qualifying wages paid up to $10,000 in total.
It is effective for incomes paid after March 13th and prior to December 31, 2020.
The meaning of qualifying incomes varies by whether a company had, typically, basically than.
100 workers in 2019.
Business that focus on ERC filing assistance normally provide knowledge and support to help organizations navigate the intricate procedure of declaring the credit. They can offer various services, including:.
How is the employee retention credit calculated? Eligibility Requirements For Employee Retention Credit
Eligibility Evaluation: These business will assess your company’s eligibility for the ERC based on factors such as your industry, earnings, and operations. They can help identify if you meet the requirements for the credit and identify the optimum credit quantity you can declare.
Documentation and Calculation: ERC filing services will assist in collecting the necessary documents, such as payroll records and financial declarations, to support your claim. They will likewise assist determine the credit amount based upon qualified wages and other qualifying expenditures.
Retroactive Claim Evaluation: If you are eligible to claim the ERC for previous quarters, these companies can evaluate your past payroll records and financials to identify potential chances for retroactive credits. They can help you amend prior income tax return to claim these refunds.
Filing Support: Companies concentrating on ERC filings will prepare and submit the needed types and documents on your behalf. This includes completing Kind 941 or any other necessary tax forms.
Compliance and Updates: ERC policies and assistance have actually evolved in time. These companies stay updated with the most recent modifications and make sure that your filings adhere to the most current guidelines. If the IRS demands additional information or performs an audit associated to your ERC claim, they can also supply continuous assistance.
It’s important to research study and vet any company offering ERC filing help to guarantee their reliability and proficiency. Look for established firms with experience in tax and payroll services, or think about reaching out to trusted accounting companies or tax professionals who provide ERC submitting assistance.
Remember that while these business can supply important help, it’s always a great idea to have a fundamental understanding of the ERC requirements and procedure yourself. This will help you make notified choices and ensure accurate filings.
The Worker Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief procedures. The goal of the ERC is to encourage businesses to maintain and pay their staff members throughout the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to eligible employers, consisting of for-profit companies, tax-exempt organizations, and specific governmental entities. To qualify, employers need to fulfill one of two criteria:.
Business operations were totally or partially suspended due to a government order related to COVID-19.
Business experienced a significant decline in gross invoices. As discussed earlier, 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 significant decrease is specified 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 right away preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity is equal to a portion (up to 70%) of certified earnings paid to employees, including certain health plan expenditures. 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, organizations that received an Income Defense Program (PPP) loan were not qualified 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 same incomes can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and enhanced, allowing eligible employers to declare the credit for certified earnings paid as far back as March 13, 2020. This retroactive arrangement offers 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, normally Kind 941. The excess can be reimbursed to the company if the credit goes beyond the amount of work taxes owed.
It is very important to note that the ERC arrangements and eligibility requirements have progressed in time. The very best course of action is to speak with a tax professional or visit the main IRS site for the most updated and comprehensive details relating to the ERC, including any recent legislative modifications or updates.
To receive the ERC, a company should meet one of the following criteria:.
The business operations were totally or partially suspended due to a government order related to COVID-19.
The business experienced a considerable decline in gross receipts. For 2021, a considerable decline is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross receipts compared to the right away preceding quarter.
The ERC is readily available to businesses of all sizes, consisting of tax-exempt organizations, but there are some exceptions. Government entities and services that received a PPP loan might have limitations on claiming the credit.
The process for claiming the ERC includes completing the needed kinds and including the credit on your employment tax return (typically Form 941). The exact time it requires to process the credit can vary based upon several aspects, including the complexity of your business and the workload of the IRS. It’s suggested to seek advice from a tax professional for guidance specific to your situation.
There are numerous companies that can assist with the process of claiming the ERC. These include accounting firms, tax advisory services, and payroll service providers. Some widely known business that use support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research study and contact these companies directly to ask about their costs and services.
Please keep in mind that the info offered here is based on general knowledge and might not show the most recent updates or changes to the ERC. It is necessary to consult with a tax professional or check out the official IRS website for the most accurate and updated info regarding eligibility, claiming procedures, and offered help.
Less than 100. The credit is based if the employer had 100 or fewer employees on average in 2019.
on incomes paid to all employees whether they actually worked or not. Simply put, even if the.
workers worked full-time and earned money for full-time work, the company still gets the credit.
Greater than 100. The credit is if the company 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, “wages” consists of not just cash payments however also a portion of the cost of employer.
provided healthcare. Eligibility Requirements For Employee Retention Credit
Employers can be immediately repaid for the credit by lowering the quantity of payroll taxes they.