Lets talk first about Does The Employee Retention Credit Have To Be Paid Back :
Our team here what do these guys doing everybody in this room is assisting teach individuals about ERC and uh constantly offer a gorgeous breakfast and have people truly learn about the program we ought to head to the space where we are able to show some of the checks that we are getting for business and I ‘d like to see that what is this this is uh hundreds of countless dollars literally Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to customers confirming that the check is on the method I imply you know if you just begin to take a look at some of these here I indicate this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I imply it’s simply I mean think of how many actual 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 validated and the check is on the mail in the mail from the IRS heading to the consumer so that’s how you’re able to track it you understand when you
receive this you know the check is chosen sure which’s when they pay so they do not pay anything till they in fact get the cash they don’t pay bottom line Wonder trust anything till this letter is validated the check is on the way they transfer it into their savings account and they can really rely on Wonder trust that the procedure has actually been ended up and the number of you think you have actually processed because you started this we’re about 35 000 of these for
about 6 billion dollars wow so clearly they understand what they’re doing and that’s what you need you require specialists 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 speaking about something really important today the employee retention credit which the majority of you have never ever become aware of I definitely hadn’t heard of it until really just recently and discovered a lot about it due to the fact that this is probably the lowest cost of capital for any small company anywhere
anytime if you have workers in between five and five hundred so I have actually got the professional 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 simply call your bank supervisor and say provide me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to tell 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 love this program it’s disappearing soon you got to discover all about it let’s talk worker 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 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everybody it makes a big difference right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the cash money payroll tax refund okay go on sorry I just need to make sure we got that point I suggest that’s a huge distinction a loan versus money 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 tough check in the mail where you get real money from the IRS all right so let’s talk about 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 Assumption this money is not for the owner not for people on the cap table not for shareholders it’s for workers right you had to have actually owned a business however it’s based upon 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 qualified 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 6 quarters the program was open well stroll us through the six quarters so you had quarters two three and four of 2020 and you had quarters one two and 3 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 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 staff member’s salary to a maximum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the employee’s income to a maximum of seven thousand per quarter how did that take place um they simply altered the rules in.
2021 versus due to the fact that the chaos of the pandemic so they wanted 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 approximately five thousand Max and then 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 6 thousand dollars per staff member that is since that’s a great deal of cash it is now there’s a caveat here the PPP money would have to be decreased from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would minimize the 26 000 so what we’re seeing usually Kevin is if you took PPP cash somewhere around 10 thousand dollars a person so let’s say hypothetically you owned a dining establishment 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 big clearly now the big question is why does nobody learn about this because appearance when I initially became aware of this when I first met Josh you understand I’ve got lots of financial investments in lots of companies I’m a major supporter for entrepreneurship in America and make many many financial investments in business owners of which numerous suffered through the pandemic when I first became aware of this I called BS I don’t believe it because I utilize 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 used them wisely to stay alive throughout the pandemic so when I heard about this I said nah it can’t be true however when I dug around I even called to my political leader pals Governor Senators they didn’t know about it I mean that’s how you understand that’s how misinformation is that there’s no details 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 nobody know about the employee retention credit you understand what’s fascinating you’re speaking about the banks Kevin since in the PPP loan procedure the federal government made it really 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 process in Canada a pre-pp loan there’s no loans in Canada by the way it’s just procedure procedure that’s all um and here there was mayhem because remember in the original cares act you could refrain from doing both programs so if you had done PPP you might refrain from doing ERC in the original program and when they altered the law in 2021 the banks were not 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 truly he or she’s never ever done it before do the banks do it nope the banks do not do it the payroll companies yeah some of them are doing it as a payroll business your accounting professional no your accounting professional’s never ever done this before unless you have an account that entered into this organization and bottom line my firm Kevin has been in business since 2009 and we’ve been dealing with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 companies so a great deal of our big huge corporate customers have actually worked with bottom line to recover 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 government programs.
The employee retention tax credit is a broad based refundable tax credit developed to encourage.
companies to keep workers on their payroll. The credit is 50% of up to $10,000 in salaries paid by an.
company whose service is completely or partly suspended because of COVID-19 or whose gross invoices.
decrease by more than 50%.
1. The credit is offered to all companies no matter size consisting of tax exempt companies. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
businesses who take Small company Loans.
2. To qualify, the company needs to meet one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s business is completely or partly 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. When the.
company’s gross invoices go above 80% of a comparable quarter in 2019 they no longer qualify.
after the end of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the certifying incomes paid up to $10,000 in overall.
It is effective for earnings paid after March 13th and prior to December 31, 2020.
The meaning of certifying earnings differs by whether a company had, on average, more or less than.
100 employees in 2019.
Companies that focus on ERC filing help normally provide proficiency and support to assist companies browse the complex process of declaring the credit. They can offer numerous services, including:.
How is the employee retention credit calculated? Does The Employee Retention Credit Have To Be Paid Back
Eligibility Evaluation: These companies will assess your business’s eligibility for the ERC based on elements such as your market, profits, and operations. If you meet the requirements for the credit and identify the maximum credit quantity you can claim, they can assist figure out.
Documentation and Estimation: ERC filing services will help in collecting the essential documentation, such as payroll records and monetary declarations, to support your claim. They will also assist compute the credit quantity based upon qualified incomes and other certifying expenditures.
Retroactive Claim Evaluation: If you are eligible to claim the ERC for previous quarters, these business can review your previous payroll records and financials to recognize potential chances for retroactive credits. They can assist you amend previous tax returns to declare these refunds.
Filing Assistance: Companies concentrating on ERC filings will prepare and submit the essential forms and paperwork on your behalf. This includes finishing Type 941 or any other required tax return.
Compliance and Updates: ERC guidelines and guidance have actually developed over time. These business remain updated with the current changes and ensure that your filings adhere to the most current guidelines. They can also supply ongoing support if the internal revenue service demands additional details or conducts an audit related to your ERC claim.
It is essential to research study and vet any company providing ERC filing assistance to ensure their reliability and proficiency. Look for established companies with experience in tax and payroll services, or consider connecting to trusted accounting companies or tax specialists who offer ERC filing support.
Keep in mind that while these business can provide valuable help, it’s always an excellent idea to have a standard understanding of the ERC requirements and procedure yourself. This will assist you make informed choices and make sure accurate filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief measures. The goal of the ERC is to motivate companies to maintain and pay their workers throughout the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to eligible employers, including for-profit companies, tax-exempt companies, and particular governmental entities. To certify, companies should meet one of two requirements:.
Business operations were fully or partly suspended due to a federal government order related to COVID-19.
Business experienced a significant decrease in gross receipts. As discussed earlier, for 2021, a substantial decrease is defined as a 20% decline in gross receipts compared to the exact 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 receipts compared to the right away preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit amount amounts to a portion (as much as 70%) of certified incomes paid to workers, consisting of 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, services that got a Paycheck Defense Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 permits services to claim the ERC even if they got a PPP loan. However, the exact same incomes can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and enhanced, allowing qualified companies to declare the credit for qualified earnings paid as far back as March 13, 2020. This retroactive arrangement offers a chance for services to change prior-year tax returns and get refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their employment income tax return, typically Kind 941. The excess can be reimbursed to the employer if the credit goes beyond the amount of employment taxes owed.
It is essential to note that the ERC arrangements and eligibility requirements have progressed with time. The very best strategy is to speak with a tax professional or visit the main internal revenue service website for the most detailed and current information concerning the ERC, including any current legislative changes or updates.
To get approved for the ERC, a business should satisfy 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 invoices. For 2021, a significant decrease is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decline in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
The ERC is available to businesses of all sizes, including tax-exempt organizations, however there are some exceptions. Government entities and organizations that got a PPP loan may have restrictions on declaring the credit.
The process for declaring the ERC involves finishing the required kinds and including the credit on your work income tax return (typically Type 941). The exact time it takes to process the credit can differ based on numerous aspects, consisting of the complexity of your service and the work of the internal revenue service. It’s recommended to consult with a tax professional for assistance specific to your situation.
There are several business that can assist with the procedure of declaring the ERC. These consist of accounting firms, tax advisory services, and payroll company. Some widely known companies that offer help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research and call these business straight to inquire about their services and costs.
Please note that the information offered here is based upon general understanding and may not show the most recent updates or changes to the ERC. It’s important to consult with a tax professional or visit the official internal revenue service website for the most current and precise details concerning eligibility, claiming procedures, and offered support.
Less than 100. If the employer had 100 or less workers typically in 2019, then the credit is based.
on salaries paid to all workers whether they actually worked or not. To put it simply, even if the.
workers worked full-time and made money for full time work, the employer still gets the credit.
Greater than 100. The credit is if the employer had more than 100 employees on average in 2019.
permitted just for incomes paid to employees who did not work throughout the calendar quarter.
In both cases, “incomes” consists of not simply cash payments but also a portion of the expense of employer.
supplied healthcare. Does The Employee Retention Credit Have To Be Paid Back
Companies can be immediately reimbursed for the credit by lowering the amount of payroll taxes they.