Lets talk first about Employee Retention Credit Refundable Or Nonrefundable :
Our team here what do these men doing everybody in this space is assisting teach people about ERC and uh always supply a beautiful breakfast and have people actually learn more about the program we ought to head to the space where we have the ability to display some of the checks that we are getting for business and I want to see that what is this this is uh numerous millions of dollars actually Kevin numerous countless dollars so these are duplicate copies of the letters that go to customers confirming that the check is on the way I imply you know if you just begin to take a look at a few of these here I mean this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s simply I imply think of the number of real customers 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 validated and the check is on the mail in the mail from the IRS heading to the customer so that’s how you have the ability to track it you know when you
get this you know the check is gone for sure which’s when they pay so they do not pay anything up until they actually get the money they do not pay bottom line Wonder trust anything up until this letter is confirmed the check is on the method they deposit it into their checking account and they can truly rely on Wonder trust that the process has 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 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 Fantastic here you’re at my YouTube channel we’re talking about something actually crucial today the worker retention credit which the majority of you have never ever become aware of I definitely hadn’t heard of it till extremely just recently and found out a lot about it since this is probably the most affordable cost of capital for any small business anywhere
anytime if you have employees 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 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 just call your bank manager and say provide me a loan it does not 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 enjoy this program it’s going away soon you got to learn everything 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 came up with the cares Act and the cares act offered businesses three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everyone it makes a huge distinction right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
remedy the cash cash payroll tax refund fine go on sorry I simply have to make sure we got that point I indicate that’s a big distinction a loan versus money cash I like money money that’s what we’re discussing 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 initial cares Act is the ERC and yes Kevin it is a beautiful hard check in the mail where you get actual money from the internal revenue service all right so let’s speak about how it works because 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 Presumption this cash is not for the owner not for individuals on the cap table not for investors it’s for workers right you needed to have actually owned an organization but it’s based on you having W-2 employees 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 qualified so you have to be on payroll in 2020 on the W-2 and you need to be on payroll for the first six months of 2021 on the W-2 right so there were 6 quarters the program was open well stroll us through the six quarters so you had quarters 2 three and four of 2020 and you had quarters one 2 and three of 2021. alright so that’s how it’s determined 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 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 five thousand dollars per staff member for the year of 2020 and in 2021 the numbers escalated to 70 of the staff member’s salary to a maximum of 7 thousand per quarter how did that occur um they simply altered the rules in.
2021 versus since the chaos of the pandemic so they wished to even get more to keep those staff members 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 occurs 21 000 Max in 2021 oh that’s how you create twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty 6 thousand dollars per staff member that is since that’s a great deal of money it is now there’s a caveat here the PPP cash would need to be minimized from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would decrease the 26 000 so what we’re seeing on average Kevin is if you took PPP cash somewhere around 10 thousand dollars a person so let’s say hypothetically you owned a dining establishment in New york city City where I’m from and you had a hundred employees and you took PPP money you would still get a million dollar in the mail from the IRS so it’s huge undoubtedly now the huge concern is why does nobody understand about this since appearance when I first found out about this when I initially met Josh you know I have actually got lots of investments in great deals of business I’m a significant supporter for entrepreneurship in America and make lots of many financial investments in business owners of which lots of suffered through the pandemic when I first became aware of this I called BS I do not think it due to the fact that I use the PPP we went through the money center Banks to get it it was really easy to do we had our CEOs call the banks they got their loans and that were well should have 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 however when I dug around I even contacted us to my politician buddies Governor Senators they didn’t understand about it I imply that’s how you know that’s how false information is that there’s no details out there then a lot of individuals informed me well you can’t get it due to the fact that you took the PPP likewise not true so let’s ask Josh why does nobody learn about the staff member retention credit you understand what’s intriguing you’re talking about the banks Kevin because in the PPP loan process 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 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 simply procedure process that’s all um and here there was chaos because remember in the original cares act you might 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 government never made it clear to anyone about how to.
do this does your CFO know how to do this not truly he or she’s never done it before do the banks do it nope the banks do not do it the payroll companies yeah a few of them are doing it as a payroll business your accountant no your accountant’s never ever done this before unless you have an account that went into this service and bottom line my firm Kevin has actually stayed in business given that 2009 and we have actually been dealing with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 business so a great deal of our huge huge corporate customers have worked with bottom line to recuperate other federal government programs we have actually done sales tax and utilize tax unemployment tax work opportunity tax credits research and development tax credits unclaimed property property tax all of these other federal government programs.
The staff member retention tax credit is a broad based refundable tax credit created to encourage.
employers to keep employees on their payroll. The credit is 50% of approximately $10,000 in earnings paid by an.
employer whose business is completely or partially suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
1. The credit is readily available to all employers regardless of size including tax exempt companies. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
businesses who take Small company Loans.
2. To certify, the employer needs to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s business is fully or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross receipts are below 50% of the similar quarter in 2019. Once the.
employer’s gross invoices exceed 80% of an equivalent quarter in 2019 they no longer certify.
after completion of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the qualifying earnings paid up to $10,000 in total.
It is effective for salaries paid after March 13th and before December 31, 2020.
The definition of certifying earnings varies by whether an employer had, usually, more or less than.
100 employees in 2019.
Business that specialize in ERC filing support generally offer expertise and assistance to help services browse the complex procedure of claiming the credit. They can offer various services, including:.
How is the employee retention credit calculated? Employee Retention Credit Refundable Or Nonrefundable
Eligibility Assessment: These business will assess your service’s eligibility for the ERC based on factors such as your market, profits, and operations. If you fulfill the requirements for the credit and identify the optimum credit quantity you can declare, they can help figure out.
Documents and Calculation: ERC filing services will assist in collecting the required documents, such as payroll records and financial statements, to support your claim. They will likewise assist calculate the credit quantity based on qualified incomes and other qualifying expenses.
Retroactive Claim Evaluation: If you are eligible to claim the ERC for previous quarters, these business can evaluate your previous payroll records and financials to determine prospective opportunities for retroactive credits. They can assist you modify prior tax returns to claim these refunds.
Filing Help: Companies focusing on ERC filings will prepare and send the needed types and documents in your place. This includes completing Form 941 or any other necessary tax forms.
Compliance and Updates: ERC policies and assistance have actually developed gradually. These companies stay updated with the most recent modifications and ensure that your filings abide by the most present standards. If the IRS requests additional info or conducts an audit associated to your ERC claim, they can likewise provide continuous support.
It is necessary to research study and vet any business providing ERC filing help to ensure their trustworthiness and knowledge. Look for established companies with experience in tax and payroll services, or consider reaching out to relied on accounting firms or tax specialists who offer ERC filing support.
Remember that while these business can provide valuable assistance, it’s always a good concept to have a fundamental understanding of the ERC requirements and procedure yourself. This will assist you make informed decisions and guarantee precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief steps. The goal of the ERC is to encourage companies to retain and pay their employees during the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to qualified companies, including for-profit services, tax-exempt companies, and specific governmental entities. To certify, employers must meet one of two requirements:.
Business operations were fully or partly suspended due to a federal government order related to COVID-19.
Business experienced a substantial decline in gross receipts. As discussed previously, for 2021, a considerable decline is specified as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a substantial decline is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross invoices compared to the immediately preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount is equal to a portion (approximately 70%) of qualified salaries paid to workers, consisting of certain health insurance expenditures. 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, 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 services to claim the ERC even if they received a PPP loan. The very same earnings can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and boosted, allowing eligible employers to claim the credit for qualified earnings paid as far back as March 13, 2020. This retroactive arrangement offers an opportunity for services 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, usually Form 941. The excess can be refunded to the company if the credit goes beyond the quantity of work taxes owed.
It is necessary to note that the ERC provisions and eligibility requirements have actually developed over time. The very best strategy is to talk to a tax professional or go to the main internal revenue service website for the most comprehensive and current info regarding the ERC, including any recent legal changes or updates.
To qualify for the ERC, a company should meet one of the following criteria:.
Business operations were completely or partly suspended due to a federal government order related to COVID-19.
The business experienced a considerable decline in gross invoices. For 2021, a considerable decrease is specified as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a considerable decrease is specified as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decline in gross invoices compared to the immediately preceding quarter.
The ERC is available to organizations of all sizes, consisting of tax-exempt companies, but there are some exceptions. For example, federal government entities and companies that got a PPP loan might have restrictions on declaring the credit.
The process for claiming the ERC includes finishing the needed kinds and consisting of the credit on your work tax return (typically Kind 941). The exact time it requires to process the credit can vary based on several elements, including the intricacy of your organization and the work of the internal revenue service. It’s recommended to consult with a tax expert for assistance specific 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 widely known companies that use assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research and call these business straight to inquire about their services and costs.
Please note that the information provided here is based on general understanding and may not reflect the most current updates or changes to the ERC. It is necessary to seek advice from a tax professional or check out the main IRS site for the most precise and updated info regarding eligibility, claiming treatments, and readily available assistance.
Less than 100. If the company had 100 or less staff members typically in 2019, then the credit is based.
on wages paid to all workers whether they in fact worked or not. Simply put, even if the.
employees worked full-time and earned money for full time work, the company still gets the credit.
Greater than 100. If the company had more than 100 staff members usually in 2019, then the credit is.
enabled only for incomes paid to staff members who did not work throughout the calendar quarter.
In both cases, “wages” includes not simply cash payments however likewise a portion of the expense of company.
provided health care. Employee Retention Credit Refundable Or Nonrefundable
Companies can be instantly reimbursed for the credit by reducing the amount of payroll taxes they.