Lets talk first about What Qualifies For Employee Retention Credit :
Our team here what do these people doing everyone in this room is helping teach individuals about ERC and uh always provide a lovely breakfast and have people truly discover the program we should head to the room where we have the ability to show a few of the checks that we are getting for business and I want to see that what is this this is uh numerous millions of dollars actually Kevin hundreds of countless dollars so these are replicate copies of the letters that go to customers verifying that the check is on the method I indicate you know if you just start to 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 mean it’s simply I mean think of how many actual customers 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 verified and the check is on the mail in the mail from the internal revenue service heading to the consumer so that’s how you’re able to track it you understand when you
receive this you understand the check is opted for sure and that’s when they pay so they don’t pay anything till they actually get the cash they do not pay bottom line Wonder trust anything till this letter is validated the check is on the method they deposit it into their checking account and they can truly trust Wonder trust that the procedure has been completed and how many you believe you’ve processed since you began this we’re about 35 000 of these for
about 6 billion dollars wow so plainly they understand what they’re doing and that’s what you require you require experts 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 discussing something truly essential today the employee retention credit which most of you have never ever become aware of I definitely had not become aware of it until extremely just recently and discovered a lot about it since this is probably the most affordable 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 biggest processor of these ERC credits this is a 170 page program so it’s not easy this isn’t like PPP we just call your bank supervisor and say give 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’ve ended up being yes the Ambassador and paid spokesperson for this I love this program it’s going away very soon you got to learn 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 used organizations three 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 distinction right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
remedy the money cash payroll tax refund fine go on sorry I just need to ensure we got that point I suggest that’s a huge difference a loan versus cash money I like cash money 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 original cares Act is the ERC and yes Kevin it is a beautiful hard check in the mail where you get actual money from the IRS all right so let’s discuss how it works because it sounds like to me if it’s a if it’s staff member retention credit that person had to be an employee so I’m going to make the Presumption this cash is not for the owner not for individuals on the cap table not for investors it’s for employees right you had to have owned a company however it’s based on you having W-2 employees in America not 10.99. As long as you had W-2 staff members 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 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 3 and four of 2020 and you had quarters one two and 3 of 2021. fine so that’s how it’s measured you need to be on the W-2 throughout that period now let’s talk my preferred part money just how much can you get back per employee that was on a W-2 in those 6 quarters so the calculation in 2020 to be precise Kevin is 50 of the staff member’s wage to an optimum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers escalated to 70 of the employee’s income to a maximum of 7 thousand per quarter how did that happen um they just altered the rules in.
2021 versus since the mayhem 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 approximately 5 thousand Max and after that what happens 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 need to be reduced from the twenty 6 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 money someplace around ten 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 money you would still get a million dollar in the mail from the IRS so it’s substantial obviously now the big question is why does nobody know about this because appearance when I initially heard about this when I initially fulfilled Josh you know I have actually got great deals of financial investments in great deals of companies I’m a significant advocate for entrepreneurship in America and make many many investments in entrepreneurs of which many suffered through the pandemic when I first became aware of this I called BS I do not believe it because I utilize 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 which were well been worthy of and we utilized them wisely to survive throughout the pandemic so when I heard about this I stated nah it can’t be true but when I dug around I even contacted us to my politician friends Governor Senators they didn’t understand about it I suggest that’s how you know that’s how misinformation is that there’s no info out there then a bunch 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 no one understand about the worker retention credit you understand what’s fascinating you’re discussing the banks Kevin due to the fact that in the PPP loan process 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 process 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 due to the fact that remember in the initial cares act you might refrain from doing both programs so if you had actually done PPP you might refrain from doing ERC in the original program and when they changed the law in 2021 the banks were refraining from doing ERC due to the fact that 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 actually he or she’s never ever done it before do the banks do it nope the banks do not do it the payroll business yeah some of them are doing it as a payroll company your accountant no your accounting professional’s never ever done this before unless you have an account that entered into this service and bottom line my firm Kevin has actually stayed in business given that 2009 and we’ve been working with the federal government and the state government to recuperate money for Fortune 500 Fortune 1000 business so a lot of our big huge 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 home real estate tax all of these other federal government programs.
The staff member retention tax credit is a broad based refundable tax credit designed to encourage.
employers to keep employees on their payroll. The credit is 50% of approximately $10,000 in incomes paid by an.
company whose organization is fully or partially suspended because of COVID-19 or whose gross invoices.
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) little.
organizations who take Small company Loans.
2. To certify, the company has to fulfill one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s organization is totally or partly suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross receipts are below 50% of the similar quarter in 2019. Once the.
company’s gross invoices exceed 80% of a comparable quarter in 2019 they no longer qualify.
after the end of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the certifying earnings paid up to $10,000 in overall.
It works for salaries paid after March 13th and prior to December 31, 2020.
The meaning of qualifying incomes differs by whether a company had, typically, more or less than.
100 staff members in 2019.
Companies that specialize in ERC filing help generally supply know-how and support to assist services browse the complicated procedure of declaring the credit. They can provide numerous services, consisting of:.
How is the employee retention credit calculated? What Qualifies For Employee Retention Credit
Eligibility Assessment: These companies will examine your company’s eligibility for the ERC based on factors such as your market, earnings, and operations. If you fulfill the requirements for the credit and determine the optimum credit amount you can declare, they can help figure out.
Documentation and Estimation: ERC filing services will assist in collecting the essential documents, such as payroll records and monetary declarations, to support your claim. They will likewise help determine the credit quantity based on qualified earnings and other qualifying expenditures.
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 prospective chances for retroactive credits. They can assist you modify prior tax returns to claim these refunds.
Filing Assistance: Companies concentrating on ERC filings will prepare and submit the necessary kinds and paperwork in your place. This consists of finishing Type 941 or any other necessary tax forms.
Compliance and Updates: ERC regulations and assistance have progressed in time. These business stay upgraded with the most recent changes and make sure that your filings abide by the most current guidelines. They can also supply ongoing assistance if the IRS requests extra details or carries out an audit related to your ERC claim.
It is necessary to research and veterinarian any company providing ERC filing assistance to guarantee their reliability and expertise. Search for recognized firms with experience in tax and payroll services, or think about reaching out to relied on accounting firms or tax specialists who use ERC submitting assistance.
Remember that while these business can supply important help, it’s always a great idea to have a basic understanding of the ERC requirements and process yourself. This will assist you make notified decisions and guarantee precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief steps. The objective of the ERC is to motivate services to maintain and pay their workers 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 services, tax-exempt organizations, and certain governmental entities. To certify, employers need to meet one of two criteria:.
The business operations were fully or partially suspended due to a federal government order related to COVID-19.
Business experienced a substantial decrease in gross receipts. As mentioned earlier, for 2021, a substantial decline is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019, or a 20% decrease in gross invoices compared to the right away preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit quantity amounts to a percentage (approximately 70%) of qualified incomes paid to employees, including specific health insurance expenditures. 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, companies that received a Paycheck Security Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 enables businesses to declare the ERC even if they received a PPP loan. The very same salaries can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and improved, enabling qualified employers to declare the credit for qualified earnings paid as far back as March 13, 2020. This retroactive arrangement supplies an opportunity for services to change prior-year income tax return and receive refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their employment tax returns, normally Form 941. The excess can be refunded to the company if the credit goes beyond the quantity of employment taxes owed.
It is essential to keep in mind that the ERC provisions and eligibility requirements have actually developed in time. The very best course of action is to speak with a tax expert or check out the official IRS site for the most updated and detailed details regarding the ERC, consisting of any current legal changes or updates.
To receive the ERC, a business needs to fulfill one of the following requirements:.
Business operations were totally or partially suspended due to a federal government order related to COVID-19.
The business experienced a considerable decline in gross receipts. For 2021, a considerable decrease is specified as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a substantial decline is specified as a 20% decline in gross invoices compared to the very same quarter in 2019, or a 20% decline in gross invoices compared to the instantly preceding quarter.
The ERC is offered to companies of all sizes, consisting of tax-exempt organizations, but there are some exceptions. Federal government entities and businesses that got a PPP loan may have restrictions on claiming the credit.
The process for claiming the ERC includes completing the required forms and consisting of the credit on your employment tax return (usually Kind 941). The exact time it requires to process the credit can differ based upon a number of factors, consisting of the intricacy of your business and the workload of the internal revenue service. It’s suggested to seek advice from a tax professional for assistance particular to your circumstance.
There are numerous companies that can help with the procedure of declaring the ERC. Some popular business that use support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the info provided here is based on general knowledge and might not show the most current updates or modifications to the ERC. It’s important to speak with a tax expert or go to the main IRS website for the most current and accurate info relating to eligibility, declaring procedures, and offered support.
Less than 100. The credit is based if the employer had 100 or fewer staff members on average in 2019.
on earnings paid to all staff members whether they actually worked or not. Simply put, even if the.
employees 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 usually in 2019, then the credit is.
allowed only for wages paid to employees who did not work during the calendar quarter.
In both cases, “earnings” consists of not simply money payments however likewise a portion of the expense of employer.
offered health care. What Qualifies For Employee Retention Credit
Employers can be immediately compensated for the credit by reducing the quantity of payroll taxes they.