Lets talk first about What Are Considered Qualified Wages For Employee Retention Credit :
Our team here what do these men doing everybody in this space is assisting teach people about ERC and uh constantly offer a gorgeous breakfast and have people actually learn about the program we need to head to the space where we have the ability to show some of the checks that we are getting for business and I ‘d like to see that what is this this is uh numerous millions of dollars literally Kevin numerous millions of dollars so these are replicate copies of the letters that go to customers validating that the check is on the way I imply you understand if you simply start to look at some of these here I suggest this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s just I mean consider 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 verified the numbers are verified and the check is on the mail in the mail from the IRS heading to the client 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 really get the cash they don’t pay bottom line Wonder trust anything till this letter is validated the check is on the way they deposit it into their savings account and they can genuinely rely on Wonder trust that the procedure has been ended up and the number of you believe you’ve processed since you started this we’re about 35 000 of these for
about six billion dollars wow so plainly they understand what they’re doing which’s what you need you require professionals 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 Wonderful here you’re at my YouTube channel we’re talking about something really important today the staff member retention credit which the majority of you have never ever heard of I definitely had not become aware of it till really just recently and learned a lot about it because this is most likely the lowest cost of capital for any small company anywhere
anytime if you have employees in between five 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 hard this isn’t like PPP we simply contact your bank supervisor and state provide 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 ended up being yes the Ambassador and paid representative for this I enjoy this program it’s disappearing soon you got to learn all about it let’s talk worker retention credit Josh Fox what is an ERC let’s simply start there so throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act used services 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 difference right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the cash cash payroll tax refund alright go on sorry I just have to ensure we got that point I imply that’s a huge difference a loan versus cash money I like cash cash that’s what we’re discussing alright 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 real cash from the IRS 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 employee retention credit that person had to be an employee so I’m going to make the Assumption this cash is not for the owner not for people on the cap table not for shareholders it’s for employees right you had to have owned a company but it’s based upon you having W-2 employees in America not 10.99. so as long as you had W-2 workers and you paid federal payroll taxes that’s why you would be eligible so you need to be on payroll in 2020 on the W-2 and you need to be on payroll for the very first six months of 2021 on the W-2 right so there were six quarters the program was open well walk 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 determined you need to be on the W-2 during that duration now let’s talk my favorite part money just how much can you get back per employee that was on a W-2 in those six quarters so the computation in 2020 to be exact Kevin is 50 of the worker’s income to an optimum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the employee’s salary to a maximum of seven thousand per quarter how did that happen um they simply changed the rules in.
2021 versus due to the fact that the turmoil of the pandemic so they wanted 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 as much as 5 thousand Max and after that what happens 21 000 Max in 2021 oh that’s how you develop twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty 6 thousand dollars per worker that is because that’s a lot of money it is now there’s a caution here the PPP money would need to be lowered from the twenty 6 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 money someplace around 10 thousand dollars an individual so let’s say hypothetically you owned a restaurant in New York 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 internal revenue service so it’s big undoubtedly now the huge concern is why does nobody know about this since appearance when I initially found out about this when I initially met Josh you know I have actually got great deals of financial investments in great deals of business I’m a major supporter for entrepreneurship in America and make numerous numerous investments in entrepreneurs of which lots of suffered through the pandemic when I first found out about this I called BS I do not think it due to the fact that I use the PPP we went through the cash center Banks to get it it was extremely easy to do we had our CEOs call the banks they got their loans and that were well deserved and we utilized them carefully to stay alive throughout the pandemic so when I became aware of this I stated nah it can’t hold true however when I dug around I even contacted us to my politician friends Guv Senators they didn’t know about it I suggest that’s how you understand that’s how misinformation is that there’s no information out there then a lot of individuals told me well you can’t get it because you took the PPP also not real so let’s ask Josh why does nobody understand about the staff member retention credit you understand what’s interesting you’re discussing the banks Kevin since in the PPP loan procedure 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 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 could not do ERC in the initial 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 made it clear to anybody about how to.
do this does your CFO understand how to do this not actually she or he’s never ever done it before do the banks do it nope the banks don’t do it the payroll companies yeah a few of them are doing it as a payroll business your accountant no your accounting professional’s never done this before unless you have an account that went into this company and bottom line my company Kevin has stayed in business since 2009 and we’ve been dealing with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 business so a great deal of our big huge business clients have actually worked with bottom line to recuperate other federal government programs we have actually done sales tax and use tax unemployment tax work chance tax credits research and development tax credits unclaimed property real estate tax all of these other federal government programs.
The staff member retention tax credit is a broad based refundable tax credit developed to encourage.
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 partially suspended because of COVID-19 or whose gross invoices.
decrease by more than 50%.
1. The credit is readily available to all employers regardless of size consisting of tax exempt organizations. There are.
just two exceptions: (1) state and city governments and their instrumentalities and (2) little.
companies who take Small company Loans.
2. To certify, the employer has to satisfy one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s company is completely or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are listed below 50% of the similar quarter in 2019. When the.
employer’s gross receipts exceed 80% of a comparable quarter in 2019 they no longer certify.
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 overall.
It is effective for wages paid after March 13th and prior to December 31, 2020.
The definition of qualifying incomes differs by whether an employer had, usually, basically than.
100 staff members in 2019.
Business that specialize in ERC filing support usually provide know-how and assistance to help organizations navigate the complex process of declaring the credit. They can use various services, including:.
How is the employee retention credit calculated? What Are Considered Qualified Wages For Employee Retention Credit
Eligibility Evaluation: These business will evaluate your business’s eligibility for the ERC based upon elements such as your industry, revenue, and operations. They can assist figure out if you satisfy the requirements for the credit and identify the optimum credit quantity you can declare.
Documents and Estimation: ERC filing services will help in gathering the necessary documentation, such as payroll records and monetary statements, to support your claim. They will likewise assist calculate the credit quantity based upon eligible salaries and other qualifying costs.
Retroactive Claim Review: If you are eligible to declare the ERC for prior quarters, these business can review your past payroll records and financials to recognize potential opportunities for retroactive credits. They can help you amend prior income tax return to claim these refunds.
Filing Assistance: Companies specializing in ERC filings will prepare and submit the required forms and paperwork on your behalf. This consists of finishing Type 941 or any other necessary tax forms.
Compliance and Updates: ERC policies and assistance have developed gradually. These business remain updated with the most recent changes and ensure that your filings abide by the most present guidelines. If the IRS requests additional details or carries out an audit related to your ERC claim, they can also supply continuous support.
It’s important to research and vet any company offering ERC filing assistance to ensure their reliability and know-how. Try to find established companies with experience in tax and payroll services, or consider connecting to trusted accounting companies or tax specialists who use ERC filing assistance.
Remember that while these business can supply valuable assistance, it’s always a great idea to have a basic understanding of the ERC requirements and process yourself. This will help you make notified decisions and ensure accurate 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 motivate services to maintain and pay their employees throughout the pandemic, even if their operations have actually been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to qualified employers, consisting of for-profit businesses, tax-exempt organizations, and specific governmental entities. To certify, companies need to fulfill one of two requirements:.
The business operations were completely or partially suspended due to a government order related to COVID-19.
The business experienced a substantial decline in gross receipts. As discussed earlier, for 2021, a substantial decline is specified as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decline 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 quantity amounts to a portion (up to 70%) of qualified incomes paid to employees, including certain health plan 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: At first, organizations that received an Income Protection Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 allows services to claim the ERC even if they received a PPP loan. Nevertheless, the exact same wages can not be used 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 wages paid as far back as March 13, 2020. This retroactive arrangement offers an opportunity for organizations to modify prior-year income tax return and get refunds.
Claiming the Credit: Companies can declare the ERC by reporting it on their work income tax return, normally Kind 941. If the credit surpasses the amount of work taxes owed, the excess can be refunded to the company.
It’s important to keep in mind that the ERC provisions and eligibility criteria have actually progressed with time. The very best course of action is to talk to a tax professional or go to the main internal revenue service site for the most comprehensive and up-to-date information concerning the ERC, consisting of any recent legal modifications or updates.
To qualify for the ERC, an organization should fulfill among the following requirements:.
The business operations were completely or partially suspended due to a government order related to COVID-19.
The business experienced a considerable decrease in gross receipts. For 2021, a significant decrease is specified as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decline in gross invoices compared to the instantly preceding quarter.
The ERC is available to services of all sizes, including tax-exempt companies, but there are some exceptions. For instance, government entities and businesses that received a PPP loan might have constraints on declaring the credit.
The procedure for declaring the ERC involves finishing the required types and including the credit on your work tax return (typically Type 941). The exact time it takes to process the credit can vary based on several factors, consisting of the intricacy of your company and the work of the internal revenue service. It’s recommended to talk to a tax professional for guidance particular to your situation.
There are several business that can help with the procedure of declaring the ERC. Some widely known business that use assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the info provided here is based on basic knowledge and may not show the most recent updates or modifications to the ERC. It is essential to consult with a tax expert or visit the official IRS website for the most updated and accurate information concerning eligibility, declaring procedures, and offered support.
Less than 100. If the company had 100 or less workers typically in 2019, then the credit is based.
on wages paid to all workers whether they actually worked or not. In other words, even if the.
staff members worked full-time and earned money for full-time work, the employer still gets the credit.
Greater than 100. If the company had more than 100 staff members on average in 2019, then the credit is.
allowed just for wages paid to staff members who did not work during the calendar quarter.
In both cases, “incomes” includes not just cash payments however likewise a portion of the cost of employer.
offered health care. What Are Considered Qualified Wages For Employee Retention Credit
Companies can be right away repaid for the credit by decreasing the amount of payroll taxes they.