Lets talk first about What Is A Partial Shutdown For Employee Retention Credit :
Our team here what do these guys doing everybody in this room is assisting teach individuals about ERC and uh constantly provide a stunning breakfast and have people actually find out about the program we ought to head to the space 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 hundreds of countless dollars actually Kevin numerous millions of dollars so these are duplicate copies of the letters that go to customers validating that the check is on the method I imply you understand if you just begin to take a look at a few 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 imply 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 validated the numbers are confirmed and the check is on the mail in the mail from the IRS heading to the customer so that’s how you’re able to track it you know when you
get this you know the check is chosen sure which’s when they pay so they don’t pay anything up until they actually get the money they don’t pay bottom line Wonder trust anything till this letter is validated the check is on the method they transfer it into their checking account and they can genuinely rely on Wonder trust that the process has actually been finished and the number of you believe you have actually processed since you began this we’re about 35 000 of these for
about six billion dollars wow so clearly 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 among these that’s what matters all right Mr Terrific here you’re at my YouTube channel we’re talking about something really crucial today the employee retention credit which most of you have actually never become aware of I certainly had not heard of it until really just recently and discovered a lot about it due to the fact that this is probably the lowest expense of capital for any small business anywhere
anytime if you have workers 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 largest processor of these ERC credits this is a 170 page program so it’s difficult this isn’t like PPP we just call your bank supervisor and state give me a loan it does not work there’s not a loan it’s an application and Josh is going to inform us all about it and how to get it and why I’ve ended up being yes the Ambassador and paid spokesperson for this I like this program it’s disappearing soon you got to find out all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just begin there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act provided businesses 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 difference right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the money money payroll tax refund okay go on sorry I simply need to make certain we got that point I suggest that’s a huge difference a loan versus cash cash I like money cash that’s what we’re discussing 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 stunning hard check in the mail where you get actual cash from the IRS all right so let’s talk about how it works because it seems like to me if it’s a if it’s staff member retention credit that individual had to be a staff member so I’m going to make the Assumption this cash is not for the owner not for individuals on the cap table not for shareholders it’s for workers right you needed to have actually owned a business but it’s based upon you having W-2 employees 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 qualified 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 appropriate 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 two and 3 of 2021. all right so that’s how it’s measured you need to be on the W-2 throughout that duration now let’s talk my preferred part money how much can you return per staff member that was on a W-2 in those six quarters so the estimation in 2020 to be specific Kevin is 50 of the staff member’s income to an optimum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the worker’s wage to a maximum of 7 thousand per quarter how did that take place um they simply changed the rules in.
2021 versus due to the fact that the chaos 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 five thousand Max and after that what takes place 21 000 Max in 2021 oh that’s how you create twenty 6 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 cash it is now there’s a caveat here the PPP cash would have to be lowered from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would reduce the 26 000 so what we’re seeing typically Kevin is if you took PPP cash someplace around ten thousand dollars an individual so let’s state hypothetically you owned a restaurant in New york city City where I’m from and you had a hundred employees and you took PPP cash you would still get a million dollar in the mail from the IRS so it’s big clearly now the big question is why does nobody know about this because appearance when I first found out about this when I initially met Josh you know I’ve got lots of investments in lots of companies I’m a major supporter for entrepreneurship in America and make lots of lots of investments in business owners of which lots of suffered through the pandemic when I initially found out about this I called BS I don’t believe it since I use 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 should have and we utilized them wisely to stay alive during the pandemic so when I found out about this I stated nah it can’t hold true however when I dug around I even called to my politician friends Guv Senators they didn’t learn about it I mean that’s how you know that’s how misinformation is that there’s no information out there then a bunch of individuals told me well you can’t get it because you took the PPP likewise not true so let’s ask Josh why does no one learn about the worker retention credit you know what’s interesting you’re discussing the banks Kevin since in the PPP loan process the federal government made it extremely 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 process 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 chaos since remember in the initial cares act you might not do both programs so if you had actually done PPP you could not do ERC in the original program and when they altered 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 ever made it clear to any person about how to.
do this does your CFO know how to do this not actually 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 accountant’s never done this before unless you have an account that entered into this company and bottom line my company Kevin has actually been in business considering that 2009 and we’ve been dealing with the federal government and the state government to recuperate money for Fortune 500 Fortune 1000 companies so a lot of our big big corporate clients have actually worked with bottom line to recuperate other federal government programs we’ve done sales tax and use tax unemployment tax work opportunity tax credits research and development tax credits unclaimed property real estate tax all of these other government programs.
The staff member retention tax credit is a broad based refundable tax credit designed to encourage.
companies to keep employees on their payroll. The credit is 50% of up to $10,000 in salaries paid by an.
Since of COVID-19 or whose gross invoices, employer whose company is completely or partially suspended.
decrease by more than 50%.
1. The credit is offered to all companies despite size including tax exempt organizations. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) small.
companies who take Small Business Loans.
2. To qualify, the company has to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s organization is completely or partly suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross invoices are below 50% of the comparable quarter in 2019. As soon as the.
company’s gross invoices go above 80% of a similar 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 salaries paid up to $10,000 in total.
It works for incomes paid after March 13th and before December 31, 2020.
The meaning of qualifying earnings varies by whether a company had, typically, basically than.
100 workers in 2019.
Business that specialize in ERC filing assistance usually supply know-how and assistance to help services navigate the complex process of declaring the credit. They can offer different services, consisting of:.
How is the employee retention credit calculated? What Is A Partial Shutdown For Employee Retention Credit
Eligibility Assessment: These business will assess your company’s eligibility for the ERC based upon factors such as your market, profits, and operations. If you meet the requirements for the credit and recognize the optimum credit quantity you can claim, they can help figure out.
Documents and Estimation: ERC filing services will assist in collecting the necessary paperwork, such as payroll records and financial declarations, to support your claim. They will likewise help calculate the credit quantity based on eligible wages and other qualifying expenditures.
Retroactive Claim Review: If you are eligible to declare the ERC for previous quarters, these business can evaluate your previous payroll records and financials to identify possible chances for retroactive credits. They can assist you modify prior tax returns to claim these refunds.
Filing Help: Business specializing in ERC filings will prepare and send the essential forms and documentation on your behalf. This consists of completing Kind 941 or any other necessary tax forms.
Compliance and Updates: ERC guidelines and assistance have actually evolved over time. These companies stay updated with the latest changes and make sure that your filings comply with the most present guidelines. If the Internal revenue service demands additional info or carries out an audit associated to your ERC claim, they can likewise supply continuous assistance.
It’s important to research study and veterinarian any company offering ERC filing help to ensure their credibility and knowledge. Try to find recognized companies with experience in tax and payroll services, or think about reaching out to relied on accounting companies or tax specialists who offer ERC filing assistance.
Remember that while these business can provide important help, it’s constantly a great idea to have a standard understanding of the ERC requirements and process yourself. This will help you make informed decisions and make sure accurate filings.
The Worker Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief steps. The objective of the ERC is to motivate organizations to keep and pay their staff members during the pandemic, even if their operations have actually been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to eligible employers, including for-profit businesses, tax-exempt organizations, and particular governmental entities. To qualify, employers should meet one of two criteria:.
Business operations were fully or partially suspended due to a federal government order related to COVID-19.
The business experienced a considerable decrease in gross receipts. As discussed earlier, for 2021, a substantial decrease is defined as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019, or a 20% decline in gross invoices compared to the instantly preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit quantity is equal to a percentage (approximately 70%) of certified incomes paid to staff members, consisting of particular health plan costs. The maximum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, services that received a Paycheck Security Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 permits companies to claim the ERC even if they received a PPP loan. The very same incomes can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and improved, allowing qualified companies to claim the credit for certified incomes paid as far back as March 13, 2020. This retroactive arrangement provides a chance for services to amend prior-year income tax return and get refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their work tax returns, usually Type 941. The excess can be refunded to the company if the credit goes beyond the quantity of work taxes owed.
It is very important to keep in mind that the ERC provisions and eligibility criteria have actually progressed in time. The very best strategy is to talk to a tax professional or visit the official IRS website for the most detailed and up-to-date information relating to the ERC, including any recent legal changes or updates.
To qualify for the ERC, an organization should satisfy one of the following requirements:.
The business operations were completely or partly suspended due to a government order related to COVID-19.
Business experienced a substantial decline in gross receipts. For 2021, a considerable decline is specified as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a substantial decline is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross receipts compared to the right away preceding quarter.
The ERC is readily available to services of all sizes, consisting of tax-exempt companies, but there are some exceptions. Government entities and services that got a PPP loan might have constraints on claiming the credit.
The process for claiming the ERC involves completing the needed types and including the credit on your work tax return (normally Kind 941). The exact time it takes to process the credit can differ based upon a number of factors, consisting of the intricacy of your service and the work of the IRS. It’s recommended to speak with a tax professional for assistance particular to your circumstance.
There are a number of business that can help with the process of claiming the ERC. These consist of accounting companies, tax advisory services, and payroll company. Some widely known companies that use support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research study and get in touch with these business directly to ask about their fees and services.
Please keep in mind that the details offered here is based upon basic knowledge and might not show the most current updates or modifications to the ERC. It’s important to consult with a tax expert or check out the official IRS website for the most up-to-date and accurate info regarding eligibility, claiming treatments, and available support.
Less than 100. The credit is based if the company had 100 or fewer workers on average in 2019.
on wages paid to all staff members 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 workers on average in 2019, then the credit is.
enabled only for salaries paid to staff members who did not work during the calendar quarter.
In both cases, “salaries” includes not simply cash payments however likewise a portion of the cost of company.
provided health care. What Is A Partial Shutdown For Employee Retention Credit
Companies can be instantly reimbursed for the credit by minimizing the quantity of payroll taxes they.