Lets talk first about Employee Retention Credit As An Employee :
Our team here what do these guys doing everybody in this space is assisting teach individuals about ERC and uh always provide a beautiful breakfast and have people really discover the program we should 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 actually Kevin numerous countless dollars so these are replicate copies of the letters that go to customers confirming that the check is on the method I indicate you know if you simply 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 suggest think about 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 validated 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’re able to track it you know when you
receive this you know the check is gone for sure and that’s when they pay so they don’t pay anything till they in fact get the money they do not pay bottom line Wonder trust anything until this letter is confirmed the check is on the way they transfer it into their savings account and they can truly trust Wonder trust that the process has been ended up and how many you think you have actually processed because you began this we have to do with 35 000 of these for
about 6 billion dollars wow so clearly they know what they’re doing which’s what you require you need 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 actually crucial today the worker retention credit which most of you have never heard of I definitely had not heard of it until very just recently and found out a lot about it since this is probably the most affordable expense of capital for any small business anywhere
anytime if you have employees between five and five hundred so I have actually got the specialist with me this is Josh Fox he’s the founder and CEO of bottom line Principles they’re the biggest processor of these ERC credits this is a 170 page program so it’s difficult this isn’t like PPP we just contact your bank supervisor and state offer 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 have actually ended up being yes the Ambassador and paid representative for this I love this program it’s disappearing very soon you got to find out 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 offered organizations three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everybody it makes a huge 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 money payroll tax refund all right go on sorry I just need to make sure we got that point I suggest that’s a big distinction a loan versus cash money I like money 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 lovely difficult check in the mail where you get real cash from the internal revenue service all right so let’s speak about how it works because it sounds like to me if it’s a if it’s staff member retention credit that person needed to be a staff member so I’m going to make the Presumption this money is not for the owner not for individuals on the cap table not for shareholders it’s for employees right you had to have owned a company however it’s based upon you having W-2 staff members 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 very first 6 months of 2021 on the W-2 right so there were six quarters the program was open well stroll us through the six quarters so you had quarters two 3 and 4 of 2020 and you had quarters one 2 and three of 2021. fine so that’s how it’s determined you have to be on the W-2 throughout that duration now let’s talk my favorite part cash 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 specific Kevin is 50 of the staff member’s income to a maximum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s wage to an optimum of seven thousand per quarter how did that occur um they just changed the rules in.
2021 versus because 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 approximately 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 6 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 have to be lowered 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 usually Kevin is if you took PPP money somewhere around ten thousand dollars an individual so let’s say hypothetically you owned a dining establishment in New york city City where I’m from and you had a hundred workers and you took PPP cash you would still get a million dollar in the mail from the IRS so it’s big obviously now the huge question is why does nobody understand about this because look when I initially found out about this when I first fulfilled Josh you know I have actually got great deals of financial investments in great deals of companies I’m a major advocate for entrepreneurship in America and make many lots of financial investments in entrepreneurs of which lots of suffered through the pandemic when I initially heard about 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 really easy to do we had our CEOs call the banks they got their loans which were well should have and we utilized them carefully to stay alive throughout the pandemic so when I found out about this I stated nah it can’t be true but when I dug around I even called to my political leader buddies Guv Senators they didn’t understand about it I imply that’s how you know that’s how false information is that there’s no details out there then a bunch of people informed me well you can’t get it due to the fact that you took the PPP likewise not real so let’s ask Josh why does nobody understand about the staff member retention credit you understand what’s intriguing you’re discussing the banks Kevin because in the PPP loan process 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 big banks in our country 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 because remember in the original cares act you might refrain from doing both programs so if you had done PPP you could not do 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 government never ever made it clear to any person about how to.
do this does your CFO know how to do this not really she or he’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 business 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 firm Kevin has been in business considering that 2009 and we’ve been working with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 companies so a great deal of our big big corporate customers have dealt with bottom line to recuperate other government programs we’ve done sales tax and use tax joblessness tax work opportunity tax credits research and development tax credits unclaimed property property tax all of these other federal government programs.
The staff member retention tax credit is a broad based refundable tax credit created to encourage.
companies to keep employees on their payroll. The credit is 50% of up to $10,000 in wages paid by an.
Due to the fact that of COVID-19 or whose gross invoices, employer whose organization is totally or partially suspended.
decline by more than 50%.
1. The credit is readily available to all companies regardless of size consisting of tax exempt companies. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
companies who take Small company Loans.
2. To certify, the company has to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s company is totally or partially suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross invoices are below 50% of the comparable quarter in 2019. When the.
employer’s gross invoices go above 80% of a similar quarter in 2019 they no longer certify.
after completion of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the qualifying 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 incomes varies by whether a company had, usually, more or less than.
100 staff members in 2019.
Business that concentrate on ERC filing support normally supply expertise and assistance to help organizations browse the intricate process of claiming the credit. They can provide different services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit As An Employee
Eligibility Assessment: These business will evaluate your company’s eligibility for the ERC based upon factors such as your market, revenue, and operations. If you meet the requirements for the credit and determine the maximum credit quantity you can claim, they can assist determine.
Documents and Calculation: ERC filing services will assist in gathering the required documentation, such as payroll records and financial declarations, to support your claim. They will likewise help calculate the credit amount based on eligible salaries and other certifying costs.
Retroactive Claim Review: If you are eligible to declare the ERC for previous quarters, these companies can review your past payroll records and financials to recognize potential chances for retroactive credits. They can help you modify prior income tax return to claim these refunds.
Filing Assistance: Companies focusing on ERC filings will prepare and submit the required types and paperwork on your behalf. This consists of finishing Form 941 or any other required tax return.
Compliance and Updates: ERC policies and assistance have actually evolved over time. These companies remain upgraded with the latest changes and ensure that your filings abide by the most existing standards. If the Internal revenue service demands extra information or performs an audit associated to your ERC claim, they can likewise offer continuous support.
It’s important to research study and vet any business using ERC filing assistance to ensure their trustworthiness and expertise. Try to find recognized companies with experience in tax and payroll services, or think about connecting to trusted accounting firms or tax experts who use ERC filing assistance.
Keep in mind that while these business can provide important support, it’s always an excellent concept to have a standard understanding of the ERC requirements and procedure yourself. This will help you make informed choices and ensure precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief measures. The goal of the ERC is to encourage companies to retain and pay their employees during 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 companies, consisting of for-profit organizations, tax-exempt companies, and specific governmental entities. To certify, employers should fulfill one of two requirements:.
The business operations were totally or partly suspended due to a federal government order related to COVID-19.
The business experienced a substantial decline in gross invoices. As mentioned earlier, for 2021, a substantial decline is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross invoices 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 quantity is equal to a percentage (approximately 70%) of qualified salaries paid to staff members, consisting of certain health insurance costs. The maximum 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 received a Paycheck Defense Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 permits businesses to declare the ERC even if they got a PPP loan. Nevertheless, the very same earnings can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively broadened and improved, allowing qualified employers to claim the credit for certified wages paid as far back as March 13, 2020. This retroactive provision provides 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 work tax returns, usually Type 941. If the credit exceeds the quantity of employment taxes owed, the excess can be reimbursed to the company.
It is necessary to keep in mind that the ERC provisions and eligibility criteria have actually progressed over time. The best course of action is to talk to a tax professional or go to the main IRS website for the most current and comprehensive details relating to the ERC, including any recent legal modifications or updates.
To qualify for the ERC, a business should fulfill among the following criteria:.
Business operations were fully or partly suspended due to a government order related to COVID-19.
The business experienced a substantial decrease in gross receipts. 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 substantial decrease is defined as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
The ERC is offered to companies of all sizes, including tax-exempt companies, but there are some exceptions. For instance, government entities and businesses that got a PPP loan may have limitations on declaring the credit.
The process for declaring the ERC involves finishing the necessary types and including the credit on your work income tax return (typically Kind 941). The exact time it takes to process the credit can vary based upon numerous factors, including the intricacy of your company and the work of the internal revenue service. It’s recommended to seek advice from a tax expert for assistance particular to your situation.
There are a number of business that can help with the procedure of declaring the ERC. These include accounting firms, tax advisory services, and payroll company. Some well-known companies that offer assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research and call these companies directly to inquire about their costs and services.
Please note that the information supplied here is based upon basic understanding and may not show the most current updates or changes to the ERC. It is necessary to speak with a tax professional or check out the main IRS website for the most accurate and current info relating to eligibility, declaring procedures, and offered assistance.
Less than 100. The credit is based if the company had 100 or less staff members on average in 2019.
on earnings paid to all staff members whether they really 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. If the employer had more than 100 workers typically in 2019, then the credit is.
enabled just for earnings paid to workers who did not work during the calendar quarter.
In both cases, “earnings” includes not simply cash payments but also a part of the cost of employer.
offered health care. Employee Retention Credit As An Employee
Employers can be immediately reimbursed for the credit by reducing the quantity of payroll taxes they.