Lets talk first about Employee Retention Credit Do I Qualify :
Our team here what do these guys doing everybody in this space is assisting teach people about ERC and uh always provide a lovely breakfast and have people truly learn more about the program we must head to the space where we are able to display some of the checks that we are getting for companies and I ‘d like to see that what is this this is uh hundreds of countless dollars actually Kevin numerous countless dollars so these are replicate copies of the letters that go to clients verifying that the check is on the method I suggest you understand if you just begin to take a 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 simply I suggest think of how many actual clients that went through the program yeah this is the very end this is the party 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 client so that’s how you’re able to track it you understand when you
receive this you understand the check is gone for sure and that’s when they pay so they don’t pay anything until they in fact receive the money they do not pay bottom line Wonder trust anything up until this letter is verified the check is on the method they deposit it into their checking account and they can truly trust Wonder trust that the process has actually been finished and the number of you believe you have actually processed considering that you started this we’re about 35 000 of these for
about six billion dollars wow so clearly they know what they’re doing which’s what you need 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 Wonderful here you’re at my YouTube channel we’re talking about something truly essential today the employee retention credit which the majority of you have never heard of I certainly hadn’t become aware of it up until extremely recently and learned a lot about it because 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 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 just phone your bank manager and state offer me a loan it does not 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 become yes the Ambassador and paid representative for this I like this program it’s going away soon you got to find out all about it let’s talk worker retention credit Josh Fox what is an ERC let’s simply start there so during the Trump Administration when President Trump was enacted they created the cares Act and the cares act provided companies three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everybody it makes a big distinction right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
remedy the cash cash payroll tax refund all right go on sorry I simply need to make certain we got that point I imply that’s a huge distinction a loan versus money money I like money money that’s what we’re discussing all right 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 hard check in the mail where you get real money from the internal revenue service all right so let’s discuss how it works since it sounds 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 Assumption this cash is not for the owner not for individuals on the cap table not for shareholders it’s for employees right you needed to have owned an organization but it’s based upon you having W-2 employees 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 eligible so you have to be on payroll in 2020 on the W-2 and you have to be on payroll for the first six months of 2021 on the W-2 correct so there were six quarters the program was open well stroll us through the 6 quarters so you had quarters two three and four of 2020 and you had quarters one two and 3 of 2021. alright so that’s how it’s measured you have to be on the W-2 throughout that period now let’s talk my preferred part money 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 specific Kevin is 50 of the employee’s income to an optimum of 5 thousand dollars per staff member 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 just changed the rules in.
2021 versus because the chaos 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 5 thousand Max and after that what occurs 21 000 Max in 2021 oh that’s how you create 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 great deal of money it is now there’s a caveat here the PPP money would have to be reduced from the twenty 6 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 a person 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 undoubtedly now the big question is why does nobody learn about this because appearance when I first heard about this when I first satisfied Josh you understand I have actually got lots of financial investments in great deals of companies I’m a major supporter for entrepreneurship in America and make many numerous investments in entrepreneurs of which lots of suffered through the pandemic when I first heard about this I called BS I don’t believe 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 utilized them carefully to stay alive throughout the pandemic so when I heard about this I said nah it can’t hold true however when I dug around I even contacted us to my politician friends Guv Senators they didn’t understand about it I indicate that’s how you know that’s how misinformation is that there’s no details out there then a bunch of individuals informed me well you can’t get it due to the fact that you took the PPP likewise not real so let’s ask Josh why does nobody understand about the staff member retention credit you understand what’s fascinating 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 country and they would process process in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply procedure procedure that’s all um and here there was mayhem since remember in the original cares act you could refrain from doing both programs so if you had actually done PPP you might refrain from doing ERC in the original program and when they changed the law in 2021 the banks were refraining from doing ERC since it’s not alone so you’re getting a tax refund so the federal government never ever made it clear to anybody about how to.
do this does your CFO know how to do this not actually he or she’s never ever done it in the past do the banks do it nope the banks don’t do it the payroll business yeah some of them are doing it as a payroll business your accountant no your accounting professional’s never ever done this prior to unless you have an account that went into this business and bottom line my firm Kevin has been in business given that 2009 and we’ve been dealing with the federal government and the state government to recover money for Fortune 500 Fortune 1000 companies so a lot of our big huge business customers have actually worked with bottom line to recuperate other government programs we’ve done sales tax and use tax unemployment tax work opportunity tax credits research and development tax credits unclaimed home property tax all of these other government programs.
The worker retention tax credit is a broad based refundable tax credit created to motivate.
companies to keep staff members on their payroll. The credit is 50% of approximately $10,000 in wages paid by an.
employer whose business is completely or partially suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
1. The credit is readily available to all companies no matter size consisting of tax exempt organizations. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) small.
organizations who take Small company Loans.
2. To certify, the employer has to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s service is fully or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross receipts are listed below 50% of the comparable quarter in 2019. When the.
company’s gross receipts exceed 80% of an equivalent quarter in 2019 they no longer certify.
after the end of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the certifying incomes paid up to $10,000 in total.
It is effective for incomes paid after March 13th and before December 31, 2020.
The definition of certifying salaries varies by whether a company had, on average, basically than.
100 staff members in 2019.
Companies that focus on ERC filing support usually provide knowledge and support to assist services browse the complex procedure of claiming the credit. They can use numerous services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Do I Qualify
Eligibility Assessment: These business will examine your company’s eligibility for the ERC based upon factors such as your industry, revenue, and operations. If you satisfy the requirements for the credit and recognize the maximum credit amount you can claim, they can assist figure out.
Paperwork 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 also help calculate the credit quantity based upon qualified earnings and other certifying costs.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for previous quarters, these business can review your previous payroll records and financials to recognize potential chances for retroactive credits. They can assist you amend prior income tax return to claim these refunds.
Filing Help: Business specializing in ERC filings will prepare and send the needed forms and documentation in your place. This consists of finishing Form 941 or any other necessary tax return.
Compliance and Updates: ERC guidelines and guidance have actually progressed gradually. These companies stay upgraded with the latest modifications and make sure that your filings comply with the most existing standards. They can likewise supply continuous assistance if the internal revenue service demands extra details or carries out an audit related to your ERC claim.
It is necessary to research and vet any company providing ERC filing help to ensure their trustworthiness and proficiency. Look for recognized firms with experience in tax and payroll services, or consider reaching out to relied on accounting firms or tax professionals who provide ERC submitting support.
Bear in mind that while these business can supply important help, it’s always a great concept to have a fundamental understanding of the ERC requirements and process yourself. This will help you make informed decisions and make sure precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief steps. The goal of the ERC is to encourage companies to maintain and pay their workers throughout the pandemic, even if their operations have actually been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to qualified companies, consisting of for-profit services, tax-exempt companies, and certain governmental entities. To qualify, companies must fulfill one of two criteria:.
The business operations were fully or partly suspended due to a federal government order related to COVID-19.
The business experienced a considerable decrease in gross receipts. As discussed earlier, for 2021, a substantial decline is specified as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decline in gross invoices 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 amount is equal to a percentage (up to 70%) of certified earnings paid to staff members, consisting of specific health insurance expenses. The maximum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, services that got a Paycheck Protection Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 permits organizations to claim the ERC even if they got a PPP loan. However, the same incomes can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and enhanced, permitting eligible companies to declare the credit for certified earnings paid as far back as March 13, 2020. This retroactive provision offers a chance for companies to change prior-year income tax return and receive refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their employment tax returns, typically Kind 941. If the credit surpasses the amount of work taxes owed, the excess can be refunded to the employer.
It is essential to keep in mind that the ERC arrangements and eligibility requirements have developed with time. The best course of action is to talk to a tax professional or visit the official IRS website for the most detailed and updated details concerning the ERC, including any recent legal changes or updates.
To receive the ERC, a business needs to meet one of the following requirements:.
The business operations were totally or partly suspended due to a government order related to COVID-19.
The business experienced a considerable decline in gross invoices. For 2021, a substantial decline is defined as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decline in gross invoices compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the instantly preceding quarter.
The ERC is readily available to companies of all sizes, including tax-exempt organizations, however there are some exceptions. Government entities and businesses that received a PPP loan may have constraints on claiming the credit.
The procedure for declaring the ERC includes finishing 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 vary based on numerous aspects, including the complexity of your organization and the workload of the internal revenue service. It’s suggested to talk to a tax professional for assistance specific to your situation.
There are several business that can help with the process of declaring the ERC. Some popular business that provide support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the information offered here is based upon basic understanding and might not reflect the most current updates or changes to the ERC. It is very important to seek advice from a tax expert or visit the main internal revenue service site for the most accurate and up-to-date information relating to eligibility, claiming procedures, and available support.
Less than 100. The credit is based if the employer had 100 or fewer employees on average in 2019.
on earnings paid to all workers whether they actually worked or not. Simply put, even if the.
workers worked full time and got paid for full time work, the company still gets the credit.
Greater than 100. If the employer had more than 100 employees usually in 2019, then the credit is.
allowed just for salaries paid to workers who did not work during the calendar quarter.
In both cases, “earnings” includes not simply cash payments however also a part of the expense of company.
provided healthcare. Employee Retention Credit Do I Qualify
Employers can be immediately compensated for the credit by decreasing the quantity of payroll taxes they.