Lets talk first about How Do You Qualify For The Employee Retention Credit :
Our team here what do these people doing everyone in this room is assisting teach people about ERC and uh always supply a gorgeous breakfast and have people actually find out about the program we should head to the room where we have the ability to display a few of the checks that we are getting for companies and I ‘d like to see that what is this this is uh numerous countless dollars actually Kevin numerous millions of dollars so these are duplicate copies of the letters that go to customers verifying that the check is on the method I mean you understand if you simply begin to take a look at some of these here I mean this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I mean it’s just I indicate think of how many real clients 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 validated 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 know the check is gone for sure which’s when they pay so they do not pay anything up until they in fact get the cash 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 checking account and they can genuinely trust Wonder trust that the process has actually been finished and how many you think you have actually processed given that you began this we’re about 35 000 of these for
about six billion dollars wow so plainly 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 among these that’s what matters all right Mr Wonderful here you’re at my YouTube channel we’re talking about something really important today the worker retention credit which the majority of you have never ever heard of I definitely hadn’t become aware of it till very just recently and learned a lot about it because this is probably 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 professional with me this is Josh Fox he’s the creator and CEO of bottom line Principles they’re the biggest processor of these ERC credits this is a 170 page program so it’s not easy this isn’t like PPP we simply call up your bank supervisor 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 spokesperson for this I like this program it’s disappearing soon you got to discover everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply begin there so during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act used organizations 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone it makes a big difference right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the cash cash payroll tax refund okay go on sorry I just need to ensure we got that point I imply that’s a huge difference a loan versus cash cash I like cash money 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 tough check in the mail where you get real money from the IRS all right so let’s talk about how it works due to the fact that it sounds like to me if it’s a if it’s worker retention credit that individual needed to be a worker so I’m going to make the Presumption this money is not for the owner not for people on the cap table not for shareholders it’s for staff members right you had to have owned a service but it’s based on you having W-2 staff members in America not 10.99. so as long as you had W-2 staff members and you paid federal payroll taxes that’s why you would be qualified so you need to be on payroll in 2020 on the W-2 and you have to be on payroll for the very first 6 months of 2021 on the W-2 correct so there were six quarters the program was open well walk us through the six quarters so you had quarters 2 3 and four of 2020 and you had quarters one 2 and three of 2021. fine so that’s how it’s determined you have to be on the W-2 during that period now let’s talk my favorite part money how much can you get back per staff member that was on a W-2 in those six quarters so the computation in 2020 to be specific Kevin is 50 of the staff member’s wage to a maximum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers increased to 70 of the worker’s wage to an optimum of seven thousand per quarter how did that happen um they simply changed the rules in.
2021 versus since the turmoil 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 after that what happens 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 because that’s a lot of cash it is now there’s a caveat here the PPP money would have to be minimized from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would lower the 26 000 so what we’re seeing on average Kevin is if you took PPP cash someplace around 10 thousand dollars an individual so let’s say hypothetically you owned a dining establishment in New York 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 certainly now the big question is why does no one learn about this due to the fact that appearance when I initially found out about this when I initially fulfilled Josh you know I’ve got lots of financial investments in lots of business I’m a significant supporter for entrepreneurship in America and make lots of 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 since I utilize 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 deserved and we utilized them sensibly to stay alive during the pandemic so when I heard about this I said nah it can’t hold true but when I dug around I even contacted us to my political leader good friends Guv Senators they didn’t understand about it I suggest that’s how you know that’s how false information is that there’s no information 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 true so let’s ask Josh why does no one learn about the employee retention credit you understand what’s interesting you’re discussing the banks Kevin since 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 huge 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 just process procedure that’s all um and here there was chaos because remember in the original cares act you could not do both programs so if you had done PPP you could not do ERC in the initial 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 anybody about how to.
do this does your CFO understand how to do this not really he or she’s never done it previously 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 accountant no your accounting professional’s never done this prior to unless you have an account that entered into this company and bottom line my firm Kevin has actually been in business because 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 lot of our huge huge business customers have actually worked with bottom line to recuperate other government programs we have actually done sales tax and use tax unemployment tax work chance tax credits research and development tax credits unclaimed home property tax all of these other federal government programs.
The staff member retention tax credit is a broad based refundable tax credit designed to encourage.
companies to keep workers on their payroll. The credit is 50% of approximately $10,000 in incomes paid by an.
company whose business is fully or partially suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is offered to all companies despite size consisting of tax exempt organizations. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
organizations who take Small company Loans.
2. To certify, the company needs to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s company is fully or partially suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross receipts are below 50% of the comparable quarter in 2019. Once the.
employer’s gross invoices 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 qualifying incomes paid up to $10,000 in overall.
It is effective for wages paid after March 13th and prior to December 31, 2020.
The definition of qualifying wages differs by whether an employer had, usually, basically than.
100 workers in 2019.
Companies that focus on ERC filing assistance usually supply knowledge and support to assist services navigate the complex procedure of declaring the credit. They can offer numerous services, including:.
How is the employee retention credit calculated? How Do You Qualify For The Employee Retention Credit
Eligibility Assessment: These business will examine your service’s eligibility for the ERC based upon elements such as your market, income, and operations. If you satisfy the requirements for the credit and recognize the maximum credit amount you can claim, they can assist figure out.
Documents and Computation: ERC filing services will assist in gathering the necessary paperwork, such as payroll records and financial statements, to support your claim. They will also assist calculate the credit amount based upon qualified salaries and other qualifying costs.
Retroactive Claim Review: If you are qualified to declare the ERC for prior quarters, these companies can review your previous payroll records and financials to identify prospective opportunities for retroactive credits. They can assist you change prior income tax return to claim these refunds.
Filing Help: Companies concentrating on ERC filings will prepare and send the needed forms and documentation in your place. This consists of completing Kind 941 or any other necessary tax return.
Compliance and Updates: ERC guidelines and assistance have actually evolved gradually. These companies stay updated with the most recent modifications and guarantee that your filings abide by the most current guidelines. They can likewise provide continuous assistance if the IRS requests additional information or conducts an audit related to your ERC claim.
It is essential to research study and veterinarian any business providing ERC filing support to ensure their reliability and knowledge. Look for established companies with experience in tax and payroll services, or think about connecting to trusted accounting companies or tax professionals who offer ERC submitting support.
Remember that while these companies can offer valuable help, it’s always a good idea to have a fundamental understanding of the ERC requirements and procedure yourself. This will assist you make informed choices and ensure precise filings.
The Worker Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief measures. The objective of the ERC is to encourage organizations to keep and pay their workers during the pandemic, even if their operations have actually been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to qualified employers, including for-profit organizations, tax-exempt organizations, and particular governmental entities. To qualify, companies should fulfill one of two criteria:.
The business operations were totally or partially suspended due to a government order related to COVID-19.
The business experienced a significant decline in gross invoices. As pointed out previously, 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 significant decrease is defined as a 20% decrease 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 amount amounts to a percentage (approximately 70%) of certified salaries paid to staff members, including certain health plan costs. 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, services 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 got a PPP loan. Nevertheless, the same wages can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively expanded and improved, permitting qualified companies to declare the credit for certified wages paid as far back as March 13, 2020. This retroactive provision offers an opportunity for organizations to modify prior-year income tax return and receive refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their work tax returns, normally Type 941. The excess can be reimbursed to the company if the credit goes beyond the quantity of employment taxes owed.
It is very important to keep in mind that the ERC provisions and eligibility criteria have actually progressed with time. The best strategy is to consult with a tax expert or visit the main IRS site for the most up-to-date and detailed info concerning the ERC, including any current legal modifications or updates.
To get approved for the ERC, a service should meet one of the following requirements:.
Business operations were totally or partly suspended due to a federal government order related to COVID-19.
The business experienced a significant decline in gross receipts. For 2021, a substantial decline is defined as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a significant decline 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.
The ERC is available to companies of all sizes, including tax-exempt companies, however there are some exceptions. For instance, government entities and businesses that got a PPP loan may have limitations on claiming the credit.
The procedure for claiming the ERC includes completing the essential forms and consisting of the credit on your work income tax return (usually Kind 941). The exact time it requires to process the credit can vary based on a number of aspects, consisting of the complexity of your service and the work of the IRS. It’s recommended to consult with a tax expert for guidance specific to your circumstance.
There are a number of business that can assist with the process of claiming the ERC. Some popular business that offer assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the info supplied here is based on general knowledge and may not reflect the most recent updates or modifications to the ERC. It is essential to speak with a tax expert or visit the official IRS website for the most precise and up-to-date info regarding eligibility, claiming treatments, and readily available help.
Less than 100. The credit is based if the company had 100 or fewer employees on average in 2019.
on incomes paid to all staff members whether they actually worked or not. To put it simply, even if the.
workers worked full time and made money for full-time work, the employer still gets the credit.
Greater than 100. The credit is if the employer had more than 100 workers on average in 2019.
enabled only for incomes paid to workers who did not work during the calendar quarter.
In both cases, “earnings” includes not simply cash payments but likewise a part of the cost of employer.
provided healthcare. How Do You Qualify For The Employee Retention Credit
Employers can be right away reimbursed for the credit by lowering the amount of payroll taxes they.