Lets talk first about Are Tips Eligible For Employee Retention Credit :
Our group here what do these people doing everybody in this room is assisting teach individuals about ERC and uh always offer a lovely breakfast and have people really learn more about the program we ought to head to the room where we have the ability to display some of the checks that we are getting for business and I wish to see that what is this this is uh hundreds of millions of dollars literally Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to clients verifying that the check is on the way I imply you understand if you simply begin to take a look at a few of these here I suggest this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I mean it’s simply I suggest think of the number of real clients that went through the program yeah this is the very end this is the party 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 client so that’s how you have the ability to track it you understand when you
receive this you understand the check is chosen sure and that’s when they pay so they don’t pay anything till they in fact receive the money they don’t pay bottom line Wonder trust anything up until this letter is confirmed the check is on the method they deposit it into their bank account and they can truly rely on Wonder trust that the process has been ended up and the number of you believe you’ve processed considering that you started this we have to do with 35 000 of these for
about six billion dollars wow so clearly they understand what they’re doing and that’s what you require you need 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 Fantastic here you’re at my YouTube channel we’re speaking about something actually essential today the staff member retention credit which the majority of you have never ever become aware of I definitely had not become aware of it till very just recently and found out 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 have actually 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 challenging this isn’t like PPP we just call your bank manager and say provide 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 become yes the Ambassador and paid representative for this I enjoy this program it’s disappearing soon you got to learn everything about it let’s talk worker retention credit Josh Fox what is an ERC let’s just begin there so during the Trump Administration when President Trump was enacted they created the cares Act and the cares act used businesses 3 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 two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the cash money payroll tax refund fine go on sorry I simply need to make sure we got that point I mean that’s a big difference a loan versus cash money I like cash money that’s what we’re discussing 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 hard check in the mail where you get real cash from the IRS all right so let’s speak 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 worker so I’m going to make the Presumption this cash is not for the owner not for people on the cap table not for shareholders it’s for staff members right you needed to have owned an organization however it’s based upon you having W-2 staff members in America not 10.99. As long as you had W-2 workers 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 6 quarters the program was open well walk us through the 6 quarters so you had quarters 2 3 and 4 of 2020 and you had quarters one 2 and three of 2021. okay so that’s how it’s measured you have to be on the W-2 throughout that period now let’s talk my preferred part cash just how much can you return per employee that was on a W-2 in those six quarters so the computation in 2020 to be precise Kevin is 50 of the employee’s salary to a maximum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers escalated to 70 of the worker’s wage to an optimum of seven thousand per quarter how did that happen um they simply altered 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 employees 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 takes place 21 000 Max in 2021 oh that’s how you create twenty 6 thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per employee that is because that’s a lot of cash it is now there’s a caution here the PPP money would need to be reduced from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would decrease the 26 000 so what we’re seeing typically Kevin is if you took PPP money someplace around 10 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 staff members and you took PPP money you would still get a million dollar in the mail from the IRS so it’s huge obviously now the huge question is why does nobody learn about this because look when I initially found out about this when I initially met Josh you understand I have actually got lots of investments in great deals of companies I’m a significant advocate for entrepreneurship in America and make lots of numerous investments in business owners of which lots of suffered through the pandemic when I initially became aware of this I called BS I do not 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 which were well should have and we utilized them sensibly to survive throughout the pandemic so when I became aware of this I stated nah it can’t be true however when I dug around I even contacted us to my politician friends Guv 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 lot of people told me well you can’t get it due to the fact that you took the PPP also not real so let’s ask Josh why does no one know about the employee retention credit you know what’s fascinating you’re discussing the banks Kevin because in the PPP loan process the federal government made it really clear that if you wanted a PPP loan you would call Wells Fargo Citibank Bank of America any of the huge banks in our nation and they would process process in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply procedure procedure that’s all um and here there was mayhem due to the fact that 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 changed the law in 2021 the banks were refraining from doing ERC because it’s not alone so you’re getting a tax refund so the government never made it clear to anyone about how to.
do this does your CFO understand how to do this not truly he or she’s never 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 accounting professional no your accountant’s never ever done this prior to unless you have an account that entered into this business and bottom line my firm Kevin has been in business given that 2009 and we have actually been working with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 business so a great deal of our big huge business clients have actually dealt with bottom line to recuperate other federal government programs we’ve done sales tax and use tax unemployment tax work chance tax credits research and development tax credits unclaimed property property tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit created to encourage.
employers to keep staff members on their payroll. The credit is 50% of up to $10,000 in wages paid by an.
Because of COVID-19 or whose gross invoices, company whose company is fully or partly suspended.
decrease by more than 50%.
1. The credit is readily available to all employers no matter size consisting of tax exempt companies. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
companies who take Small Business Loans.
2. To qualify, the employer needs to meet one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s business is completely or partially suspended by federal government order due to COVID-19.
during 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 go above 80% of a comparable quarter in 2019 they no longer certify.
after the end of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the qualifying earnings paid up to $10,000 in overall.
It works for incomes paid after March 13th and before December 31, 2020.
The definition of certifying earnings varies by whether an employer had, typically, more or less than.
100 staff members in 2019.
Companies that focus on ERC filing assistance usually provide knowledge and assistance to help organizations browse the intricate process of declaring the credit. They can offer numerous services, consisting of:.
How is the employee retention credit calculated? Are Tips Eligible For Employee Retention Credit
Eligibility Assessment: These companies will examine your service’s eligibility for the ERC based on aspects such as your market, income, and operations. They can help figure out if you fulfill the requirements for the credit and determine the optimum credit amount you can declare.
Documents and Calculation: ERC filing services will help in collecting the essential documentation, such as payroll records and financial statements, to support your claim. They will likewise help calculate the credit quantity based upon eligible earnings and other qualifying expenses.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for prior quarters, these business can review your previous payroll records and financials to identify potential chances for retroactive credits. They can assist you amend previous tax returns to claim these refunds.
Filing Support: Business focusing on ERC filings will prepare and send the essential kinds and paperwork on your behalf. This consists of completing Kind 941 or any other required tax return.
Compliance and Updates: ERC guidelines and assistance have actually progressed over time. These companies remain updated with the most recent modifications and guarantee that your filings adhere to the most existing guidelines. They can likewise supply continuous assistance if the internal revenue service demands additional info or performs an audit related to your ERC claim.
It is very important to research and vet any business offering ERC filing support to guarantee their reliability and competence. Search for recognized firms with experience in tax and payroll services, or think about reaching out to trusted accounting companies or tax experts who offer ERC filing support.
Remember that while these business can provide valuable support, it’s constantly a good concept to have a standard understanding of the ERC requirements and process yourself. This will assist you make notified decisions and ensure precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief measures. The objective of the ERC is to motivate businesses to keep and pay their workers during the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to qualified employers, including for-profit organizations, tax-exempt companies, and particular governmental entities. To qualify, companies should satisfy one of two requirements:.
Business operations were totally or partly suspended due to a government order related to COVID-19.
The business experienced a substantial decrease in gross receipts. As discussed previously, 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 substantial decline is specified as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decrease 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 amount amounts to a portion (up to 70%) of qualified earnings paid to employees, consisting of certain 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: Initially, companies that got a Paycheck Defense Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 permits companies to declare the ERC even if they received a PPP loan. Nevertheless, the very same earnings can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and boosted, permitting qualified employers to claim the credit for certified wages paid as far back as March 13, 2020. This retroactive arrangement supplies a chance for companies to change prior-year income tax return and get refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their work tax returns, generally Type 941. If the credit surpasses the quantity of employment taxes owed, the excess can be refunded to the company.
It is very important to note that the ERC arrangements and eligibility criteria have actually progressed over time. The very best strategy is to speak with a tax professional or go to the official internal revenue service website for the most updated and detailed information relating to the ERC, consisting of any recent legal modifications or updates.
To qualify for the ERC, a company needs to meet among the following requirements:.
The business operations were totally or partly suspended due to a government order related to COVID-19.
The business experienced a significant decrease in gross invoices. 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 considerable decrease is specified as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
The ERC is offered to organizations of all sizes, consisting of tax-exempt companies, however there are some exceptions. For example, government entities and businesses that got a PPP loan might have constraints on claiming the credit.
The process for claiming the ERC involves completing the essential types and consisting of the credit on your employment income tax return (generally Form 941). The exact time it requires to process the credit can differ based upon numerous factors, consisting of the complexity of your company and the workload of the internal revenue service. It’s recommended to consult with a tax professional for guidance specific to your situation.
There are several companies that can help with the procedure of declaring the ERC. These consist of accounting firms, tax advisory services, and payroll service providers. Some widely known companies that provide support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research and get in touch with these companies directly to ask about their services and charges.
Please keep in mind that the details supplied here is based on basic knowledge and may not reflect the most recent updates or modifications to the ERC. It’s important to talk to a tax professional or check out the official internal revenue service website for the most current and accurate info regarding eligibility, declaring procedures, and offered help.
Less than 100. If the employer had 100 or fewer employees usually in 2019, then the credit is based.
on incomes paid to all staff members whether they actually worked or not. Simply put, even if the.
staff members worked full-time and got paid for full-time work, the employer still gets the credit.
Greater than 100. If the employer had more than 100 workers typically in 2019, then the credit is.
allowed just for salaries paid to employees who did not work during the calendar quarter.
In both cases, “salaries” consists of not simply money payments however also a part of the cost of employer.
provided healthcare. Are Tips Eligible For Employee Retention Credit
Employers can be instantly reimbursed for the credit by minimizing the quantity of payroll taxes they.