Lets talk first about Gross Receipts Test For Employee Retention Credit :
Our team here what do these men doing everyone in this room is assisting teach individuals about ERC and uh always supply a beautiful breakfast and have people really learn more about the program we must head to the space where we have the ability to show a few of the checks that we are getting for companies and I wish to see that what is this this is uh numerous millions of dollars literally Kevin numerous countless dollars so these are replicate copies of the letters that go to customers validating that the check is on the way I imply you know if you just begin to look at some of these here I indicate this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s simply I mean consider how many real customers 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 confirmed and the check is on the mail in the mail from the internal revenue service heading to the consumer so that’s how you have the ability to track it you know when you
get this you understand the check is opted for sure and that’s when they pay so they don’t pay anything until they actually get the cash they do not pay bottom line Wonder trust anything until this letter is verified the check is on the method they transfer it into their savings account and they can truly trust Wonder trust that the process has actually been completed and how many you think you’ve processed given that you started this we’re about 35 000 of these for
about 6 billion dollars wow so clearly they know what they’re doing which’s what you require you need specialists 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 Terrific here you’re at my YouTube channel we’re discussing something truly crucial today the staff member retention credit which most of you have actually never heard of I certainly hadn’t become aware of it up until extremely recently and found out a lot about it since this is most likely the most affordable cost of capital for any small business anywhere
anytime if you have employees in between five and five hundred so I have actually got the expert with me this is Josh Fox he’s the creator and CEO of bottom line Principles they’re the largest processor of these ERC credits this is a 170 page program so it’s not easy this isn’t like PPP we simply phone your bank supervisor and say offer me a loan it doesn’t 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 have actually become yes the Ambassador and paid representative for this I enjoy this program it’s disappearing very soon you got to learn all about it let’s talk employee retention credit Josh Fox what is an ERC let’s just start there so during the Trump Administration when President Trump was enacted they developed 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 big distinction right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
remedy the money cash payroll tax refund okay go on sorry I just have to make certain we got that point I imply that’s a big distinction a loan versus money cash I like cash cash that’s what we’re speaking about 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 initial cares Act is the ERC and yes Kevin it is a beautiful tough check in the mail where you get actual 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 person needed to be a staff member so I’m going to make the Presumption this money is not for the owner not for individuals on the cap table not for investors it’s for workers right you needed to have owned a business but it’s based upon you having W-2 workers in America not 10.99. 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 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 walk us through the 6 quarters so you had quarters two three and four of 2020 and you had quarters one 2 and 3 of 2021. okay so that’s how it’s determined you need 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 6 quarters so the estimation in 2020 to be specific Kevin is 50 of the staff member’s salary to an optimum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the employee’s wage to an optimum of 7 thousand per quarter how did that happen um they just altered the rules in.
2021 versus since the chaos of the pandemic so they wanted 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 as much as five thousand Max and then what occurs 21 000 Max in 2021 oh that’s how you develop twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty six thousand dollars per worker that is because that’s a lot of money it is now there’s a caveat here the PPP cash would need to be decreased from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would decrease the 26 000 so what we’re seeing typically Kevin is if you took PPP cash someplace around ten thousand dollars a person so let’s state hypothetically you owned a restaurant in New york city City where I’m from and you had a hundred workers and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s big obviously now the huge question is why does nobody know about this since look when I first heard about this when I first satisfied Josh you know I have actually got lots of financial investments in great deals of companies I’m a major supporter for entrepreneurship in America and make numerous lots of investments in business owners of which many suffered through the pandemic when I initially became aware of this I called BS I don’t believe it due to the fact that I utilize 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 utilized them carefully to survive throughout the pandemic so when I heard about this I stated nah it can’t hold true however when I dug around I even contacted us to my political leader friends Guv Senators they didn’t know about it I mean that’s how you know that’s how misinformation is that there’s no information out there then a lot of people told me well you can’t get it due to the fact that you took the PPP also not true so let’s ask Josh why does nobody understand about the worker retention credit you know what’s interesting you’re talking about the banks Kevin because in the PPP loan procedure the federal government made it very 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 procedure 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 due to the fact that keep in mind in the initial cares act you could refrain from doing both programs so if you had done PPP you might not do ERC in the initial program and when they altered the law in 2021 the banks were refraining from doing ERC because 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 understand how to do this not truly she or he’s never ever done it before 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 accounting professional’s never done this prior to unless you have an account that went into this business and bottom line my company Kevin has actually stayed in business because 2009 and we have actually been dealing with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 business so a great deal of our huge big corporate clients have actually dealt with bottom line to recuperate other federal government programs we’ve done sales tax and use tax joblessness tax work chance tax credits research and development tax credits unclaimed property real estate tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit created to motivate.
employers to keep workers on their payroll. The credit is 50% of as much as $10,000 in earnings paid by an.
company whose service is fully or partly suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
1. The credit is available to all companies no matter size including tax exempt organizations. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) little.
companies who take Small company Loans.
2. To qualify, the employer needs to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s company is completely or partly suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are listed below 50% of the equivalent quarter in 2019. As soon as the.
company’s gross receipts go above 80% of a similar 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 incomes paid up to $10,000 in total.
It works for incomes paid after March 13th and prior to December 31, 2020.
The definition of qualifying incomes varies by whether an employer had, typically, more or less than.
100 staff members in 2019.
Companies that specialize in ERC filing help typically supply proficiency and assistance to help businesses browse the complex process of claiming the credit. They can use numerous services, including:.
How is the employee retention credit calculated? Gross Receipts Test For Employee Retention Credit
Eligibility Assessment: These business will evaluate your business’s eligibility for the ERC based upon aspects such as your market, income, and operations. If you meet the requirements for the credit and identify the optimum credit quantity you can claim, they can help identify.
Documents and Computation: ERC filing services will help in gathering the necessary documents, such as payroll records and financial statements, to support your claim. They will likewise help determine the credit quantity based on eligible earnings and other qualifying expenses.
Retroactive Claim Review: If you are eligible to claim the ERC for prior quarters, these business can evaluate your previous payroll records and financials to identify prospective opportunities for retroactive credits. They can help you modify previous tax returns to claim these refunds.
Filing Assistance: Companies specializing in ERC filings will prepare and send the necessary kinds and paperwork in your place. This includes finishing Type 941 or any other required tax forms.
Compliance and Updates: ERC guidelines and guidance have progressed over time. These business stay updated with the most recent modifications and make sure that your filings comply with the most current guidelines. They can likewise offer ongoing support if the internal revenue service demands additional info or conducts an audit related to your ERC claim.
It is very important to research and vet any company using ERC filing assistance to ensure their credibility and know-how. Look for established firms with experience in tax and payroll services, or think about reaching out to relied on accounting companies or tax experts who provide ERC submitting assistance.
Remember that while these companies can provide valuable support, it’s always a good idea to have a basic understanding of the ERC requirements and procedure yourself. This will assist you make informed decisions and make sure precise filings.
The Staff Member 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 staff members during the pandemic, even if their operations have actually been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to eligible employers, consisting of for-profit companies, tax-exempt companies, and particular governmental entities. To certify, employers should satisfy one of two criteria:.
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. As pointed out previously, for 2021, a significant decrease is specified as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decline in gross receipts compared to the immediately 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 incomes paid to staff members, including certain health plan expenditures. The optimum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, businesses that got an Income Protection Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 allows businesses to declare the ERC even if they received a PPP loan. The same salaries can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and improved, allowing qualified companies to declare the credit for qualified incomes paid as far back as March 13, 2020. This retroactive arrangement supplies a chance for services to change prior-year tax returns and get refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their work income tax return, typically Form 941. The excess can be refunded to the company if the credit surpasses the quantity of work taxes owed.
It is essential to keep in mind that the ERC provisions and eligibility requirements have actually evolved with time. The best course of action is to seek advice from a tax professional or check out the official IRS site for the most updated and in-depth details regarding the ERC, including any recent legislative modifications or updates.
To receive the ERC, a company should meet one of the following requirements:.
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 significant 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 specified as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
The ERC is available to organizations of all sizes, including tax-exempt companies, however there are some exceptions. Federal government entities and organizations that got a PPP loan may have constraints on claiming the credit.
The process for claiming the ERC includes finishing the essential types and including the credit on your employment tax return (normally Type 941). The exact time it requires to process the credit can vary based upon numerous factors, including the complexity of your organization and the workload of the internal revenue service. It’s advised to speak with a tax expert for guidance particular to your situation.
There are several companies that can assist with the process of declaring the ERC. Some well-known business that use assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the info offered here is based on general understanding and may not reflect the most recent updates or modifications to the ERC. It is necessary to seek advice from a tax professional or go to the official IRS site for the most current and precise details relating to eligibility, claiming treatments, and available assistance.
Less than 100. If the company had 100 or less employees on average in 2019, then the credit is based.
on earnings paid to all workers whether they really worked or not. Simply put, 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 staff members on average in 2019.
enabled only for salaries paid to workers who did not work during the calendar quarter.
In both cases, “earnings” consists of not just cash payments however also a part of the cost of employer.
provided health care. Gross Receipts Test For Employee Retention Credit
Employers can be right away repaid for the credit by minimizing the quantity of payroll taxes they.