Lets talk first about How To Set Up And Track The Employee Retention Credit :
Our team here what do these guys doing everyone in this space is helping teach people about ERC and uh constantly provide a beautiful breakfast and have people really learn more about the program we should head to the room where we have the ability to display some 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 actually Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to clients confirming that the check is on the method I mean you understand if you simply start to take a look at a few of these here I imply this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s just I suggest think about the number of 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 IRS heading to the customer so that’s how you have the ability to track it you understand when you
receive this you understand the check is gone for sure which’s when they pay so they do not pay anything till 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 method they transfer it into their bank account and they can really rely on Wonder trust that the procedure has actually been finished and the number of you believe you have actually processed considering that you began this we have to do with 35 000 of these for
about 6 billion dollars wow so clearly they understand what they’re doing which’s what you require 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 Fantastic here you’re at my YouTube channel we’re discussing something actually crucial today the employee retention credit which most of you have actually never become aware of I definitely had not heard of it till very recently and learned a lot about it because this is probably the most affordable expense of capital for any small business anywhere
anytime if you have workers in between 5 and five hundred so I’ve got the specialist with me this is Josh Fox he’s the founder 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 just contact your bank manager and say offer me a loan it does not work there’s not a loan it’s an application and Josh is going to inform all of us about it and how to get it and why I have actually become yes the Ambassador and paid spokesperson for this I enjoy this program it’s going away very soon you got to find out 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 created the cares Act and the cares act offered services three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everybody it makes a big 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 cash payroll tax refund okay go on sorry I just need to ensure we got that point I indicate that’s a big difference a loan versus cash money I like cash money that’s what we’re discussing okay 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 stunning tough check in the mail where you get real money from the internal revenue service all right so let’s discuss how it works due to the fact that it seems like to me if it’s a if it’s staff member retention credit that person needed to be a staff member so I’m going to make the Assumption this money is not for the owner not for people on the cap table not for investors it’s for employees right you had to have actually owned a company however it’s based upon you having W-2 staff members 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 very first 6 months of 2021 on the W-2 proper so there were six quarters the program was open well stroll us through the six quarters so you had quarters two three and 4 of 2020 and you had quarters one two and three of 2021. all right so that’s how it’s measured you have to be on the W-2 throughout that duration now let’s talk my preferred part cash how much can you return per employee that was on a W-2 in those 6 quarters so the computation in 2020 to be exact Kevin is 50 of the worker’s wage to a maximum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers increased to 70 of the employee’s salary to an optimum of seven thousand per quarter how did that occur um they just changed the rules in.
2021 versus due to the fact that the turmoil of the pandemic so they wished to even get more to keep those workers on payroll 100 so if you can get 5 000 per person Max in twenty that was 50 in 2020 approximately 5 thousand Max and then 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 worker that is since that’s a lot of money it is now there’s a caution here the PPP money would need to be minimized from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would lower the 26 000 so what we’re seeing usually 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 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 undoubtedly now the big question is why does no one know about this since look when I first heard about this when I initially fulfilled Josh you understand I’ve got great deals of investments in great deals of companies I’m a significant advocate for entrepreneurship in America and make many lots of investments in business owners of which lots of 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 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 deserved and we utilized them wisely to stay alive during the pandemic so when I found out about this I said nah it can’t be true but when I dug around I even contacted us to my politician buddies Governor Senators they didn’t learn about it I indicate that’s how you know that’s how false information is that there’s no information out there then a bunch of people told 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 know about the employee retention credit you know what’s fascinating 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 huge banks in our nation and they would process procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s just process process that’s all um and here there was turmoil because keep in mind in the original cares act you could not do both programs so if you had done PPP you might refrain from doing ERC in the initial program and when they altered the law in 2021 the banks were not doing ERC since 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 ever 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 company your accounting professional no your accounting professional’s never done this before unless you have an account that went into this service and bottom line my firm Kevin has actually been in business because 2009 and we’ve been dealing with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 companies so a lot of our big huge corporate clients have actually worked with bottom line to recuperate other federal government programs we have actually done sales tax and utilize tax unemployment tax work chance 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 designed to motivate.
companies to keep staff members on their payroll. The credit is 50% of up to $10,000 in earnings paid by an.
Since of COVID-19 or whose gross invoices, employer whose organization is completely or partially suspended.
decline by more than 50%.
1. The credit is offered to all employers regardless of size consisting of tax exempt organizations. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) little.
organizations who take Small Business Loans.
2. To certify, the company has to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s service is totally or partially suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross invoices are listed below 50% of the equivalent quarter in 2019. As soon as the.
company’s gross receipts exceed 80% of a similar quarter in 2019 they no longer qualify.
after completion of that quarter.
Computation of the Credit.
The quantity 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 before December 31, 2020.
The definition of certifying salaries differs by whether a company had, typically, more or less than.
100 workers in 2019.
Business that specialize in ERC filing help normally offer competence and assistance to help businesses navigate the intricate procedure of declaring the credit. They can provide numerous services, consisting of:.
How is the employee retention credit calculated? How To Set Up And Track The Employee Retention Credit
Eligibility Evaluation: These companies will examine your organization’s eligibility for the ERC based upon factors such as your industry, income, and operations. If you satisfy the requirements for the credit and determine the maximum credit amount you can declare, they can assist identify.
Paperwork and Estimation: ERC filing services will assist in gathering the required paperwork, such as payroll records and financial declarations, to support your claim. They will also assist compute the credit quantity based upon eligible salaries and other qualifying expenses.
Retroactive Claim Review: If you are qualified to declare the ERC for previous quarters, these business can examine your previous payroll records and financials to determine prospective chances for retroactive credits. They can help you modify prior income tax return to claim these refunds.
Filing Assistance: Business focusing on ERC filings will prepare and submit the required kinds and documentation on your behalf. This consists of finishing Kind 941 or any other required tax return.
Compliance and Updates: ERC regulations and assistance have progressed with time. These companies remain upgraded with the most recent modifications and make sure that your filings adhere to the most existing standards. If the Internal revenue service requests extra details or carries out an audit associated to your ERC claim, they can likewise offer ongoing assistance.
It is essential to research study and veterinarian any business offering ERC filing support to guarantee their credibility and knowledge. Search for established companies with experience in tax and payroll services, or consider connecting to trusted accounting companies or tax specialists who use ERC filing assistance.
Bear in mind that while these business can provide important assistance, it’s constantly an excellent concept to have a standard understanding of the ERC requirements and procedure yourself. This will help you make notified choices and make sure accurate filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief measures. The goal of the ERC is to encourage businesses to maintain and pay their employees during the pandemic, even if their operations have actually been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to eligible employers, including for-profit businesses, tax-exempt organizations, and specific governmental entities. To qualify, employers must fulfill one of two requirements:.
Business operations were fully or partially suspended due to a government order related to COVID-19.
The business experienced a considerable decline in gross receipts. As mentioned earlier, for 2021, a considerable decrease is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a substantial 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.
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 percentage (approximately 70%) of certified salaries paid to staff members, consisting of specific health insurance costs. The optimum credit per staff member is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, organizations that received an Income Defense Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 allows services to claim the ERC even if they got a PPP loan. Nevertheless, the very same wages can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and boosted, permitting qualified companies to declare the credit for certified incomes paid as far back as March 13, 2020. This retroactive arrangement supplies an opportunity for organizations to amend prior-year tax returns and get refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their work income tax return, generally Type 941. The excess can be refunded to the company if the credit surpasses the quantity of employment taxes owed.
It is essential to note that the ERC provisions and eligibility requirements have developed in time. The best course of action is to speak with a tax professional or check out the main internal revenue service website for the most in-depth and up-to-date details regarding the ERC, including any current legal modifications or updates.
To qualify for the ERC, a company must meet among the following criteria:.
The business operations were completely or partially suspended due to a federal government order related to COVID-19.
The business experienced a significant decline in gross receipts. For 2021, a considerable decrease is defined as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant 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 right away preceding quarter.
The ERC is available to businesses of all sizes, consisting of tax-exempt organizations, but there are some exceptions. For example, government entities and organizations that got a PPP loan might have constraints on claiming the credit.
The process for declaring the ERC involves finishing the required forms and consisting of the credit on your work income tax return (normally Type 941). The exact time it takes to process the credit can differ based upon several elements, consisting of the intricacy of your organization and the workload of the IRS. It’s suggested to seek advice from a tax expert for guidance specific to your circumstance.
There are several business that can assist with the procedure of declaring the ERC. Some well-known business that use assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the information offered here is based upon basic understanding and might not show the most recent updates or changes to the ERC. It is very important to seek advice from a tax professional or check out the official internal revenue service website for the most accurate and updated info concerning eligibility, declaring procedures, and readily available support.
Less than 100. The credit is based if the company had 100 or less staff members on average in 2019.
on incomes paid to all staff members whether they actually worked or not. Simply put, even if the.
workers worked full time and got paid for full-time work, the employer still gets the credit.
Greater than 100. If the company had more than 100 employees usually in 2019, then the credit is.
permitted just for salaries paid to employees who did not work throughout the calendar quarter.
In both cases, “salaries” consists of not just cash payments however also a part of the expense of employer.
offered healthcare. How To Set Up And Track The Employee Retention Credit
Employers can be immediately reimbursed for the credit by reducing the amount of payroll taxes they.