Lets talk first about Claiming Retroactive Employee Retention Credit :
Our group here what do these people doing everyone in this room is assisting teach individuals about ERC and uh always provide a gorgeous breakfast and have people really learn about the program we ought to head to the room where we are able to display some of the checks that we are getting for companies and I wish to see that what is this this is uh hundreds of millions of dollars literally Kevin hundreds of countless dollars so these are replicate copies of the letters that go to customers confirming that the check is on the way I suggest you understand if you just start to look at some of these here I mean this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I mean it’s just I indicate 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 confirmed the numbers are verified and the check is on the mail in the mail from the internal revenue service heading to the client so that’s how you have the ability to track it you understand when you
get this you understand the check is opted for sure which’s when they pay so they do not pay anything up until they actually get the cash they do not pay bottom line Wonder trust anything until this letter is confirmed the check is on the way they deposit it into their savings account and they can genuinely trust Wonder trust that the procedure has been finished and how many you think you have actually processed because you began this we’re about 35 000 of these for
about 6 billion dollars wow so plainly they know what they’re doing and that’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 Wonderful here you’re at my YouTube channel we’re talking about something really crucial today the staff member retention credit which most of you have actually never ever heard of I certainly hadn’t become aware of it till very just recently and discovered a lot about it because this is probably the lowest expense of capital for any small business anywhere
anytime if you have staff members in between 5 and five hundred so I’ve got the expert with me this is Josh Fox he’s the creator and CEO of bottom line Concepts 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 up your bank manager and state provide me a loan it doesn’t 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 love this program it’s disappearing very soon you got to discover everything about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply begin there so during the Trump Administration when President Trump was enacted they came up with 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 nearly everybody it makes a huge difference right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
fix the money money payroll tax refund alright go on sorry I simply have to make sure we got that point I suggest that’s a huge difference a loan versus cash cash 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 initial cares Act is the ERC and yes Kevin it is a lovely hard check in the mail where you get real cash from the internal revenue service all right so let’s talk about how it works due to the fact that it sounds like to me if it’s a if it’s employee retention credit that person 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 investors it’s for employees right you needed to have actually owned an organization however it’s based on you having W-2 workers 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 correct so there were six quarters the program was open well walk us through the six quarters so you had quarters two three and four of 2020 and you had quarters one 2 and three of 2021. alright so that’s how it’s measured you need to be on the W-2 during that duration now let’s talk my preferred part money just how much can you return per worker that was on a W-2 in those 6 quarters so the calculation in 2020 to be precise Kevin is 50 of the employee’s income to a maximum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the employee’s wage to an optimum of seven thousand per quarter how did that happen um they just changed the rules in.
2021 versus since the chaos of the pandemic so they wished 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 up to five thousand Max and then what takes place 21 000 Max in 2021 oh that’s how you develop twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty six thousand dollars per staff member that is because that’s a lot of money it is now there’s a caution here the PPP money would need to be reduced from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would decrease the 26 000 so what we’re seeing usually Kevin is if you took PPP cash someplace around 10 thousand dollars a person so let’s say 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 internal revenue service so it’s huge certainly now the big question is why does nobody know about this because appearance when I first became aware of this when I initially fulfilled Josh you understand I have actually got great deals of investments in great deals of companies I’m a major supporter for entrepreneurship in America and make many numerous investments in business owners of which numerous suffered through the pandemic when I initially found out about this I called BS I do not think it since 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 should have and we used them carefully to stay alive during the pandemic so when I became aware of 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 learn about it I suggest that’s how you understand that’s how false information is that there’s no info out there then a lot of people told me well you can’t get it since you took the PPP likewise not real so let’s ask Josh why does nobody know about the worker retention credit you understand what’s fascinating you’re discussing the banks Kevin because in the PPP loan procedure 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 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 procedure that’s all um and here there was chaos due to the fact that remember in the original cares act you might not do both programs so if you had 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 government never made it clear to anybody about how to.
do this does your CFO know how to do this not truly he or she’s never ever done it in the past do the banks do it nope the banks don’t do it the payroll companies 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 business and bottom line my company Kevin has actually stayed in business considering that 2009 and we have actually been working with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 business so a great deal of our big big corporate clients have dealt with bottom line to recover 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 home real estate tax all of these other federal government programs.
The worker 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.
Because of COVID-19 or whose gross invoices, company whose service is fully or partly suspended.
decrease by more than 50%.
1. The credit is offered to all employers no matter size including tax exempt organizations. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
organizations who take Small Business Loans.
2. To qualify, the company needs to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s organization is fully or partially suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the similar quarter in 2019. Once the.
employer’s gross invoices go above 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 earnings paid up to $10,000 in total.
It works for incomes paid after March 13th and before December 31, 2020.
The definition of certifying incomes differs by whether an employer had, usually, more or less than.
100 staff members in 2019.
Business that concentrate on ERC filing help usually provide expertise and assistance to help businesses navigate the complicated procedure of declaring the credit. They can use various services, consisting of:.
How is the employee retention credit calculated? Claiming Retroactive Employee Retention Credit
Eligibility Assessment: These business will examine your business’s eligibility for the ERC based upon aspects such as your industry, revenue, and operations. They can assist figure out if you satisfy the requirements for the credit and determine the maximum credit amount you can claim.
Documentation and Estimation: ERC filing services will help in collecting the necessary paperwork, such as payroll records and monetary statements, to support your claim. They will also help compute the credit quantity based on qualified earnings and other certifying costs.
Retroactive Claim Review: If you are eligible to claim the ERC for prior quarters, these companies can review your previous payroll records and financials to recognize potential chances for retroactive credits. They can help you modify previous income tax return to claim these refunds.
Filing Assistance: Companies focusing on ERC filings will prepare and send the needed kinds and documents in your place. This consists of completing Kind 941 or any other necessary tax return.
Compliance and Updates: ERC regulations and assistance have actually evolved gradually. These companies stay updated with the current modifications and guarantee that your filings comply with the most present guidelines. They can likewise supply ongoing assistance if the internal revenue service demands extra info 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 credibility 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 experts who offer ERC filing assistance.
Bear in mind that while these companies can offer valuable support, it’s always a good concept to have a standard understanding of the ERC requirements and procedure yourself. This will help you make notified decisions and make sure precise filings.
The Staff Member 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 companies to retain and pay their staff members 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 companies, consisting of for-profit businesses, tax-exempt organizations, and certain governmental entities. To qualify, employers need to fulfill one of two requirements:.
The business operations were fully or partly suspended due to a federal government order related to COVID-19.
The business experienced a significant decrease in gross receipts. As discussed earlier, for 2021, a substantial decrease is defined as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decline in gross invoices compared to the instantly preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit amount is equal to a percentage (approximately 70%) of qualified wages paid to workers, consisting of specific health insurance costs. The optimum 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 got a Paycheck Defense Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 allows organizations to declare the ERC even if they got a PPP loan. The same salaries can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and improved, enabling eligible employers to claim the credit for certified earnings paid as far back as March 13, 2020. This retroactive provision supplies an opportunity for services to modify prior-year tax returns and get refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their employment income tax return, usually Kind 941. The excess can be reimbursed to the employer if the credit goes beyond the amount of work taxes owed.
It is essential to note that the ERC arrangements and eligibility criteria have developed gradually. The very best strategy is to talk to a tax expert or check out the main internal revenue service website for the most detailed and up-to-date details regarding the ERC, consisting of any current legal modifications or updates.
To get approved for the ERC, a service should meet one of the following criteria:.
The 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 substantial decrease is defined as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a substantial decrease is specified as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decline in gross invoices compared to the right away preceding quarter.
The ERC is offered to companies of all sizes, including tax-exempt companies, but there are some exceptions. For instance, federal government entities and organizations that got a PPP loan might have restrictions on declaring the credit.
The process for claiming the ERC involves completing the required kinds and including the credit on your employment income tax return (normally Type 941). The exact time it requires to process the credit can vary based on a number of aspects, consisting of the intricacy of your organization and the workload of the internal revenue service. It’s advised to seek advice from a tax expert for assistance particular to your circumstance.
There are numerous business that can assist with the process of claiming the ERC. Some widely known companies that use support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the info supplied here is based upon basic knowledge and may not reflect the most current updates or modifications to the ERC. It’s important to speak with a tax professional or go to the main IRS site for the most accurate and up-to-date details relating to eligibility, declaring treatments, and readily available support.
Less than 100. If the employer had 100 or fewer employees typically in 2019, then the credit is based.
on wages paid to all workers whether they really worked or not. To put it simply, even if the.
workers worked full time and earned money for full-time work, the company still gets the credit.
Greater than 100. If the company had more than 100 employees typically in 2019, then the credit is.
permitted just for wages paid to staff members who did not work throughout the calendar quarter.
In both cases, “incomes” consists of not just money payments however likewise a portion of the cost of company.
offered health care. Claiming Retroactive Employee Retention Credit
Employers can be immediately reimbursed for the credit by minimizing the amount of payroll taxes they.