Lets talk first about Do We Qualify For The Employee Retention Credit :
Our team here what do these men doing everyone in this space is helping teach people about ERC and uh always supply a lovely breakfast and have people really find out about the program we need to head to the room where we are able to display a few of the checks that we are getting for business and I wish to see that what is this this is uh hundreds of countless dollars literally Kevin hundreds of millions of dollars so these are duplicate copies of the letters that go to customers verifying that the check is on the way I mean you know if you just start to look at some of these here I imply this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s simply I indicate consider 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 verified and the check is on the mail in the mail from the internal revenue service heading to the customer so that’s how you have the ability to track it you understand when you
get this you understand the check is chosen sure which’s when they pay so they do not pay anything till they actually receive the money they do not pay bottom line Wonder trust anything till this letter is confirmed the check is on the method they deposit it into their savings account and they can really rely on Wonder trust that the procedure has actually been finished and how many you think you’ve processed because you started this we have to do with 35 000 of these for
about 6 billion dollars wow so plainly they know what they’re doing and that’s what you require you require specialists 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 discussing something truly crucial today the staff member retention credit which the majority of you have never heard of I definitely hadn’t heard of it until really just recently and found out a lot about it since this is probably the lowest expense of capital for any small company anywhere
anytime if you have employees in between 5 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 Concepts 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 just phone your bank supervisor and state give me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to tell 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 enjoy this program it’s disappearing very soon you got to find out all about it let’s talk staff member 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 companies 3 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 two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
remedy the cash cash payroll tax refund fine go on sorry I simply need to make sure we got that point I imply that’s a big distinction a loan versus cash cash I like money cash that’s what we’re talking about okay 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 stunning difficult check in the mail where you get actual cash from the internal revenue service all right so let’s talk about how it works since it sounds like to me if it’s a if it’s employee retention credit that individual had to be a staff member so I’m going to make the Assumption this money is not for the owner not for people on the cap table not for investors it’s for employees right you had to have actually owned a business however it’s based on you having W-2 workers 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 qualified 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 proper so there were 6 quarters the program was open well stroll us through the 6 quarters so you had quarters 2 three and four of 2020 and you had quarters one two and 3 of 2021. alright so that’s how it’s determined you have to be on the W-2 during that period now let’s talk my favorite part money how much can you return per employee that was on a W-2 in those six quarters so the estimation in 2020 to be exact Kevin is 50 of the staff member’s wage to an optimum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers escalated to 70 of the staff member’s salary to an optimum of 7 thousand per quarter how did that occur um they just altered the rules in.
2021 versus due to the fact that the mayhem 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 after that what occurs 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 staff member that is because that’s a lot of money it is now there’s a caveat here the PPP cash would need to be lowered from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would minimize the 26 000 so what we’re seeing typically Kevin is if you took PPP cash somewhere around 10 thousand dollars a person so let’s state 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 substantial obviously now the huge question is why does nobody know about this due to the fact that appearance when I initially heard about this when I initially fulfilled Josh you know I’ve got lots of investments in lots of companies I’m a major supporter for entrepreneurship in America and make many lots of investments in business owners of which lots of suffered through the pandemic when I initially heard about this I called BS I don’t think 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 been worthy of and we used them wisely to survive during the pandemic so when I heard about this I stated nah it can’t hold true but when I dug around I even called to my politician good friends Governor Senators they didn’t know about it I mean 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 since you took the PPP also not real so let’s ask Josh why does nobody learn about the staff member retention credit you understand 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 wanted a PPP loan you would call Wells Fargo Citibank Bank of America any of the big 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 simply procedure procedure that’s all um and here there was turmoil since remember in the initial cares act you might not do both programs so if you had done PPP you could refrain from doing ERC in the initial program and when they changed the law in 2021 the banks were not 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 truly she or he’s never done it previously do the banks do it nope the banks don’t do it the payroll business yeah some of them are doing it as a payroll company your accounting professional no your accounting professional’s never ever done this before unless you have an account that went into this organization and bottom line my company Kevin has stayed 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 lot of our big big business clients have worked with bottom line to recover other 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 worker retention tax credit is a broad based refundable tax credit created to encourage.
employers to keep employees on their payroll. The credit is 50% of up to $10,000 in wages paid by an.
employer whose business is totally or partly suspended because of COVID-19 or whose gross receipts.
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 local governments and their instrumentalities and (2) little.
organizations who take Small company Loans.
2. To certify, the company needs to satisfy one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s service is totally or partially suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross receipts are below 50% of the equivalent quarter in 2019. When the.
company’s gross receipts exceed 80% of a comparable quarter in 2019 they no longer certify.
after completion of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the qualifying earnings paid up to $10,000 in total.
It is effective for incomes paid after March 13th and prior to December 31, 2020.
The definition of certifying earnings differs by whether a company had, usually, basically than.
100 employees in 2019.
Companies that concentrate on ERC filing assistance normally offer competence and assistance to help services browse the intricate procedure of declaring the credit. They can provide various services, including:.
How is the employee retention credit calculated? Do We Qualify For The Employee Retention Credit
Eligibility Evaluation: These companies will examine your company’s eligibility for the ERC based on aspects such as your industry, profits, and operations. If you meet the requirements for the credit and determine the optimum credit amount you can claim, they can assist identify.
Documents and Estimation: ERC filing services will help in collecting the necessary documents, such as payroll records and monetary statements, to support your claim. They will also assist determine the credit quantity based upon qualified wages and other certifying expenditures.
Retroactive Claim Review: If you are qualified to declare the ERC for previous quarters, these companies can review your past payroll records and financials to determine potential chances for retroactive credits. They can help you change prior income tax return to claim these refunds.
Filing Assistance: Companies focusing on ERC filings will prepare and send the required forms and documentation in your place. This includes finishing Kind 941 or any other required tax return.
Compliance and Updates: ERC guidelines and guidance have actually evolved in time. These companies remain updated with the current modifications and ensure that your filings comply with the most current standards. They can also provide continuous support if the IRS demands extra information or conducts an audit related to your ERC claim.
It is very important to research study and veterinarian any company using ERC filing support to guarantee their trustworthiness and competence. Try to find established companies with experience in tax and payroll services, or think about reaching out to trusted accounting firms or tax specialists who provide ERC filing support.
Bear in mind that while these companies can supply important support, it’s constantly a good idea to have a fundamental understanding of the ERC requirements and procedure yourself. This will assist you make notified choices and guarantee accurate filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief measures. The objective of the ERC is to motivate businesses to retain and pay their workers throughout the pandemic, even if their operations have actually been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to qualified employers, including for-profit organizations, tax-exempt companies, and certain governmental entities. To certify, employers must fulfill one of two requirements:.
The business operations were totally or partly suspended due to a government order related to COVID-19.
Business experienced a considerable decrease in gross receipts. As pointed out previously, for 2021, a significant decrease is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decline in gross receipts compared to the instantly 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 percentage (approximately 70%) of qualified salaries paid to workers, consisting of specific health plan 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: Initially, services that got an Income Security Program (PPP) loan were not eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 allows companies to declare the ERC even if they got a PPP loan. The very same wages can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and enhanced, enabling qualified companies to declare the credit for qualified wages paid as far back as March 13, 2020. This retroactive arrangement offers a chance for companies to modify prior-year tax returns and receive refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their work tax returns, typically Form 941. The excess can be refunded to the company if the credit surpasses the quantity of work taxes owed.
It is essential to keep in mind that the ERC arrangements and eligibility requirements have actually developed over time. The very best strategy is to seek advice from a tax expert or check out the main internal revenue service website for the most comprehensive and current information regarding the ERC, including any current legal changes or updates.
To qualify for the ERC, a company should satisfy among the following requirements:.
The business operations were fully or partly suspended due to a government order related to COVID-19.
The business experienced a significant decrease in gross receipts. For 2021, a considerable decline is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decline is defined as a 20% decline in gross receipts compared to the very same quarter in 2019, or a 20% decline in gross receipts compared to the instantly preceding quarter.
The ERC is readily available to companies of all sizes, consisting of tax-exempt companies, however there are some exceptions. For instance, federal government entities and organizations that got a PPP loan may have constraints on claiming the credit.
The procedure for claiming the ERC involves completing the necessary kinds and consisting of the credit on your work tax return (normally Form 941). The exact time it requires to process the credit can differ based upon numerous elements, consisting of the complexity of your business and the workload of the internal revenue service. It’s suggested to seek advice from a tax expert for assistance specific to your circumstance.
There are numerous companies that can help with the process of declaring the ERC. These consist of accounting firms, tax advisory services, and payroll provider. Some popular business that use help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research study and get in touch with these business directly to inquire about their services and charges.
Please note that the info offered here is based upon basic understanding and might not show the most recent updates or modifications to the ERC. It is necessary to talk to a tax expert or check out the main IRS website for the most accurate and current information relating to eligibility, declaring procedures, and readily available assistance.
Less than 100. If the company had 100 or fewer staff members typically in 2019, then the credit is based.
on incomes paid to all staff members whether they really worked or not. In other words, even if the.
workers worked full-time and got paid for full time work, the company still gets the credit.
Greater than 100. The credit is if the employer had more than 100 staff members on average in 2019.
permitted just for incomes paid to staff members who did not work throughout the calendar quarter.
In both cases, “earnings” includes not simply money payments but also a portion of the cost of company.
supplied healthcare. Do We Qualify For The Employee Retention Credit
Companies can be right away reimbursed for the credit by decreasing the quantity of payroll taxes they.