Lets talk first about Employee Retention Credit Engagement Letter :
Our team here what do these men doing everyone in this space is assisting teach people about ERC and uh always supply a lovely breakfast and have individuals really learn about the program we ought to head to the space where we are able to display a few of the checks that we are getting for companies and I wish to see that what is this this is uh numerous countless dollars literally Kevin hundreds of countless dollars so these are duplicate copies of the letters that go to clients validating that the check is on the way I mean you understand if you just begin to 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 suggest it’s simply I imply think about the number of real customers 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 confirmed 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
get this you understand the check is opted for sure and that’s when they pay so they do not pay anything up until they in fact receive the money they do not pay bottom line Wonder trust anything till this letter is validated the check is on the way they transfer it into their bank account and they can truly trust Wonder trust that the procedure has been finished and how many you think you have actually processed given that you began this we have to do with 35 000 of these for
about 6 billion dollars wow so plainly they know what they’re doing which’s what you need you need 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 essential today the staff member retention credit which most of you have actually never heard of I certainly hadn’t become aware of it till really just recently and discovered a lot about it because this is probably the most affordable expense of capital for any small business anywhere
anytime if you have workers in between five and five hundred so I have actually got the expert 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 difficult this isn’t like PPP we simply phone your bank supervisor 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 all of us about it and how to get it and why I’ve ended up being yes the Ambassador and paid spokesperson for this I like 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 simply start there so throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act provided companies three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly 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 money money payroll tax refund alright go on sorry I just have to ensure we got that point I indicate that’s a big difference a loan versus cash money I like money cash that’s what we’re discussing 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 initial cares Act is the ERC and yes Kevin it is a lovely tough check in the mail where you get real money from the internal revenue service all right so let’s talk about how it works due to the fact that 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 money is not for the owner not for people on the cap table not for investors it’s for workers right you needed to have actually owned a service however it’s based upon 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 walk us through the six quarters so you had quarters 2 3 and four of 2020 and you had quarters one 2 and three of 2021. fine so that’s how it’s measured you have to be on the W-2 throughout that duration now let’s talk my preferred part money just how much can you get back per worker that was on a W-2 in those six quarters so the computation in 2020 to be specific Kevin is 50 of the worker’s salary to a maximum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers escalated to 70 of the employee’s salary to an optimum of seven thousand per quarter how did that occur um they just changed the rules in.
2021 versus since the turmoil of the pandemic so they wished to even get more to keep those workers 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 happens 21 000 Max in 2021 oh that’s how you develop 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 since that’s a lot of cash it is now there’s a caution here the PPP cash would have to be decreased 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 on average Kevin is if you took PPP cash someplace around ten 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 cash you would still get a million dollar in the mail from the internal revenue service so it’s big certainly now the big question is why does nobody understand about this since appearance when I first heard about this when I initially met Josh you understand I have actually got great deals of investments in great deals of companies I’m a significant advocate for entrepreneurship in America and make many lots of investments in entrepreneurs of which many suffered through the pandemic when I initially became aware of this I called BS I don’t believe it since I utilize the PPP we went through the money center Banks to get it it was very easy to do we had our CEOs call the banks they got their loans which were well deserved and we utilized them carefully to stay alive during the pandemic so when I heard about this I stated nah it can’t hold true however when I dug around I even called to my politician good friends Guv Senators they didn’t know about it I imply that’s how you know that’s how false information is that there’s no information out there then a lot of individuals told 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 no one learn about the staff member retention credit you know what’s interesting you’re speaking about 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 huge banks in our country and they would process process in Canada a pre-pp loan there’s no loans in Canada by the way it’s just procedure process that’s all um and here there was mayhem due to the fact that remember in the initial cares act you might not do both programs so if you had actually done PPP you could not do ERC in the initial program and when they altered the law in 2021 the banks were refraining from doing ERC since it’s not alone so you’re getting a tax refund so the government never made it clear to any person about how to.
do this does your CFO know how to do this not truly she or he’s never done it before do the banks do it nope the banks do not do it the payroll business yeah a few of them are doing it as a payroll company your accountant no your accountant’s never done this prior to unless you have an account that went into this company and bottom line my company Kevin has actually stayed in business since 2009 and we’ve been working with the federal government and the state government to recover money for Fortune 500 Fortune 1000 business so a great deal of our big big corporate clients have worked with bottom line to recuperate other government programs we’ve done sales tax and utilize tax joblessness tax work chance tax credits research and development tax credits unclaimed home property tax all of these other federal government programs.
The staff member retention tax credit is a broad based refundable tax credit created to motivate.
companies to keep workers on their payroll. The credit is 50% of up to $10,000 in incomes paid by an.
Since of COVID-19 or whose gross receipts, employer whose service is fully or partly suspended.
decline by more than 50%.
Accessibility.
1. The credit is offered to all companies no matter size consisting of tax exempt companies. There are.
just 2 exceptions: (1) state and city governments and their instrumentalities and (2) little.
companies who take Small Business Loans.
2. To qualify, the employer has to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s company is fully 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.
company’s gross receipts exceed 80% of an equivalent 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 certifying wages paid up to $10,000 in total.
It is effective for incomes paid after March 13th and before December 31, 2020.
The meaning of qualifying salaries varies by whether a company had, usually, more or less than.
100 staff members in 2019.
Business that focus on ERC filing support normally supply proficiency and assistance to help companies navigate the complex procedure of declaring the credit. They can provide different services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Engagement Letter
Eligibility Assessment: These companies will evaluate your business’s eligibility for the ERC based upon factors such as your industry, profits, and operations. They can assist figure out if you meet the requirements for the credit and recognize the maximum credit amount you can claim.
Documents and Estimation: ERC filing services will help in collecting the required paperwork, such as payroll records and financial declarations, to support your claim. They will likewise help determine the credit quantity based upon qualified incomes and other certifying costs.
Retroactive Claim Review: If you are eligible to declare the ERC for previous quarters, these companies can evaluate your past payroll records and financials to identify possible opportunities for retroactive credits. They can assist you amend previous income tax return to claim these refunds.
Filing Assistance: Companies concentrating on ERC filings will prepare and submit the required kinds and paperwork on your behalf. This includes completing Kind 941 or any other necessary tax forms.
Compliance and Updates: ERC regulations and guidance have actually progressed in time. These companies remain updated with the current changes and guarantee that your filings abide by the most current guidelines. They can likewise offer continuous support if the IRS demands extra info or carries out an audit related to your ERC claim.
It is necessary to research study and veterinarian any business providing ERC filing help to guarantee their trustworthiness and expertise. Try to find recognized companies with experience in tax and payroll services, or consider connecting to relied on accounting companies or tax specialists who use ERC filing support.
Bear in mind that while these business can offer valuable support, it’s always a good idea to have a standard understanding of the ERC requirements and process yourself. This will assist you make notified decisions and ensure precise filings.
The Staff Member 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 companies to keep and pay their workers throughout the pandemic, even if their operations have actually been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to qualified employers, consisting of for-profit services, tax-exempt companies, and specific governmental entities. To certify, employers must meet one of two requirements:.
The business operations were totally or partially suspended due to a government order related to COVID-19.
The business experienced a significant decrease in gross invoices. As pointed out previously, for 2021, a considerable decrease is specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decline is specified as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decline in gross invoices compared to the immediately preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount is equal to a percentage (up to 70%) of qualified earnings paid to workers, consisting of certain health insurance expenses. The maximum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, companies that received an Income Defense Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 permits organizations to declare the ERC even if they got a PPP loan. However, the exact same incomes can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and enhanced, enabling qualified employers to claim the credit for certified incomes paid as far back as March 13, 2020. This retroactive provision offers a chance for businesses to modify prior-year tax returns and get refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their work tax returns, typically Type 941. The excess can be refunded to the employer if the credit exceeds the amount of work taxes owed.
It is necessary to keep in mind that the ERC provisions and eligibility criteria have actually evolved with time. The very best strategy is to seek advice from a tax professional or visit the main internal revenue service site for the most in-depth and current information relating to the ERC, consisting of any current legal modifications or updates.
To qualify for the ERC, a company needs to meet among the following requirements:.
Business operations were fully or partly suspended due to a federal government order related to COVID-19.
The business experienced a substantial decline in gross receipts. For 2021, a considerable decline 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 specified as a 20% decline in gross invoices 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 services of all sizes, including tax-exempt companies, however there are some exceptions. For example, government entities and companies that got a PPP loan might have limitations on declaring the credit.
The procedure for claiming the ERC includes finishing the needed kinds and including the credit on your work income tax return (typically Kind 941). The exact time it requires to process the credit can vary based upon a number of elements, consisting of the complexity of your organization and the work of the IRS. It’s suggested to consult with a tax expert for assistance specific to your scenario.
There are a number of companies that can aid with the procedure of declaring the ERC. These consist of accounting companies, tax advisory services, and payroll provider. Some well-known companies that provide assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research study and call these companies straight to inquire about their charges and services.
Please note that the details supplied here is based on basic knowledge and might not reflect the most current updates or modifications to the ERC. It is essential to talk to a tax expert or visit the main IRS site for the most precise and updated information relating to eligibility, claiming treatments, and available help.
Less than 100. The credit is based if the employer had 100 or fewer employees on average in 2019.
on incomes paid to all employees whether they actually worked or not. In other words, even if the.
employees 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 staff members on average in 2019.
permitted just for salaries paid to staff members who did not work throughout the calendar quarter.
In both cases, “wages” includes not just cash payments but also a portion of the expense of company.
supplied healthcare. Employee Retention Credit Engagement Letter
Payment.
Employers can be immediately repaid for the credit by minimizing the quantity of payroll taxes they.