Lets talk first about Employee Retention Credit Family Members :
Our group here what do these guys doing everyone in this room is helping teach individuals about ERC and uh always provide a gorgeous breakfast and have people actually learn more about the program we should head to the room where we are able to show a few of the checks that we are getting for companies and I wish to see that what is this this is uh numerous millions of dollars actually Kevin hundreds of countless dollars so these are duplicate copies of the letters that go to clients confirming that the check is on the way I suggest you know if you just start to look at a few of these here I imply this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I imply it’s just I imply consider the number of real customers 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 confirmed and the check is on the mail in the mail from the internal revenue service heading to the customer so that’s how you’re able to track it you know when you
receive this you know the check is chosen sure which’s when they pay so they don’t pay anything till they really get the cash they do not pay bottom line Wonder trust anything until this letter is validated the check is on the method they transfer it into their checking account and they can truly rely on Wonder trust that the procedure has been finished and the number of you think you’ve processed since 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 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 important today the worker retention credit which the majority of you have actually never heard of I definitely had not heard of it till very just recently and discovered a lot about it due to the fact that this is most likely the most affordable expense of capital for any small business anywhere
anytime if you have staff members in between 5 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 challenging this isn’t like PPP we simply contact 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 us all about it and how to get it and why I have actually become yes the Ambassador and paid representative for this I enjoy this program it’s going away soon you got to discover all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply begin there so throughout the Trump Administration when President Trump was enacted they developed 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 big distinction right there 2 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 indicate that’s a big distinction a loan versus cash cash I like money cash 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 initial cares Act is the ERC and yes Kevin it is a gorgeous difficult check in the mail where you get real money from the IRS all right so let’s speak about how it works since it sounds like to me if it’s a if it’s employee retention credit that person needed 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 shareholders it’s for workers right you needed to have owned an organization however it’s based on you having W-2 employees 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 six quarters so you had quarters two 3 and 4 of 2020 and you had quarters one 2 and 3 of 2021. alright so that’s how it’s determined you have to be on the W-2 throughout that period now let’s talk my favorite part money how much can you return per worker that was on a W-2 in those six quarters so the calculation in 2020 to be specific Kevin is 50 of the worker’s income to a maximum of 5 thousand dollars per staff member 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 simply altered the rules in.
2021 versus since 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 employee that is since that’s a lot of cash it is now there’s a caveat here the PPP cash would have to be minimized 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 typically Kevin is if you took PPP cash somewhere 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 clearly now the huge question is why does nobody understand about this since appearance when I first found out about this when I first fulfilled Josh you understand I have actually got lots of investments in lots of business I’m a significant advocate for entrepreneurship in America and make many numerous investments in business owners of which many suffered through the pandemic when I first found out about this I called BS I don’t believe it since I use the PPP we went through the cash 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 deserved and we utilized them sensibly to survive throughout the pandemic so when I heard about this I said nah it can’t be true however when I dug around I even contacted us to my political leader buddies 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 details out there then a bunch of individuals informed me well you can’t get it because you took the PPP also not real so let’s ask Josh why does no one learn about the staff member retention credit you know what’s intriguing you’re discussing the banks Kevin because 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 country and they would process procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply process procedure that’s all um and here there was mayhem due to the fact that keep in mind in the initial cares act you could not do both programs so if you had actually done PPP you might refrain from doing ERC in the original program and when they altered 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 federal government never made it clear to anyone about how to.
do this does your CFO understand how to do this not actually he or she’s never done it in the past 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 business your accountant no your accounting professional’s never ever done this before unless you have an account that went into this organization and bottom line my firm Kevin has stayed in business considering that 2009 and we have actually been dealing with the federal government and the state federal government to recuperate money for Fortune 500 Fortune 1000 companies so a great deal of our big huge business clients have actually worked with bottom line to recover other government programs we have actually done sales tax and utilize tax joblessness tax work chance tax credits research and development tax credits unclaimed property property tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit designed to motivate.
companies to keep workers on their payroll. The credit is 50% of as much as $10,000 in wages paid by an.
Due to the fact that of COVID-19 or whose gross receipts, employer whose company is completely or partly suspended.
decrease by more than 50%.
1. The credit is available to all employers despite size including tax exempt organizations. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
services who take Small company Loans.
2. To certify, the employer needs to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s service is completely or partly suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross invoices are below 50% of the equivalent quarter in 2019. Once the.
company’s gross receipts go above 80% of a similar quarter in 2019 they no longer certify.
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 works for wages paid after March 13th and before December 31, 2020.
The meaning of qualifying earnings differs by whether an employer had, typically, more or less than.
100 workers in 2019.
Business that focus on ERC filing assistance generally supply know-how and assistance to assist businesses navigate the complicated process of claiming the credit. They can offer different services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Family Members
Eligibility Assessment: These business will assess your organization’s eligibility for the ERC based upon elements such as your market, income, and operations. If you fulfill the requirements for the credit and recognize the optimum credit quantity you can declare, they can help figure out.
Documents and Computation: ERC filing services will help in gathering the required paperwork, such as payroll records and monetary statements, to support your claim. They will also help determine the credit amount based on qualified wages and other qualifying costs.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for prior quarters, these companies can examine your past payroll records and financials to recognize potential opportunities for retroactive credits. They can assist you change previous income tax return to declare these refunds.
Filing Assistance: Companies concentrating on ERC filings will prepare and send the essential kinds and documentation in your place. This includes completing Type 941 or any other required tax forms.
Compliance and Updates: ERC guidelines and guidance have actually developed in time. These business remain updated with the current changes and make sure that your filings abide by the most present standards. If the Internal revenue service requests extra details or conducts an audit associated to your ERC claim, they can also supply ongoing support.
It is necessary to research and veterinarian any company offering ERC filing support to guarantee their credibility and proficiency. Search for established companies with experience in tax and payroll services, or consider connecting to relied on accounting companies or tax experts who provide ERC submitting assistance.
Bear in mind that while these business can offer important help, it’s constantly an excellent idea to have a fundamental understanding of the ERC requirements and procedure yourself. This will assist you make informed choices and guarantee 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 procedures. The objective of the ERC is to motivate services to maintain and pay their employees throughout the pandemic, even if their operations have actually been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to qualified companies, consisting of for-profit organizations, tax-exempt organizations, and particular governmental entities. To certify, companies need to satisfy one of two requirements:.
The business operations were completely or partially suspended due to a federal government order related to COVID-19.
Business experienced a substantial decline in gross invoices. As discussed previously, for 2021, a substantial decline is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decline is defined as a 20% decrease in gross receipts compared to the 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 quantity is equal to a portion (approximately 70%) of certified incomes paid to workers, consisting of specific health insurance expenditures. The optimum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, companies that got a Paycheck Security Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 permits services to declare the ERC even if they got a PPP loan. Nevertheless, the exact same wages can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and boosted, allowing qualified companies to claim the credit for certified wages paid as far back as March 13, 2020. This retroactive provision supplies an opportunity for businesses to change prior-year income tax return and receive refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their work tax returns, typically Type 941. The excess can be reimbursed to the employer if the credit exceeds the amount of employment taxes owed.
It is very important to keep in mind that the ERC arrangements and eligibility requirements have actually evolved gradually. The very best course of action is to seek advice from a tax professional or check out the main internal revenue service site for the most in-depth and current information concerning the ERC, consisting of any current legal changes or updates.
To qualify for the ERC, a business should fulfill among the following requirements:.
Business operations were fully or partly suspended due to a government order related to COVID-19.
Business experienced a substantial decrease in gross receipts. For 2021, a significant decline is defined as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decline in gross invoices compared to the very same quarter in 2019, or a 20% decrease in gross invoices compared to the immediately preceding quarter.
The ERC is available to businesses of all sizes, consisting of tax-exempt companies, but there are some exceptions. For example, federal government entities and organizations that received a PPP loan might have constraints on declaring the credit.
The process for claiming the ERC includes completing the essential types and including the credit on your work tax return (usually Form 941). The exact time it requires to process the credit can vary based upon numerous factors, including the complexity of your business and the work of the internal revenue service. It’s advised to seek advice from a tax expert for assistance particular to your scenario.
There are a number of companies that can help with the procedure of declaring the ERC. Some widely known business that provide support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the information provided here is based on general knowledge and might not reflect the most current updates or changes to the ERC. It is necessary to consult with a tax professional or go to the official internal revenue service website for the most precise and up-to-date details concerning 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 salaries paid to all employees whether they actually 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. If the company had more than 100 staff members on average in 2019, then the credit is.
allowed only for wages paid to employees who did not work throughout the calendar quarter.
In both cases, “salaries” consists of not simply cash payments but also a portion of the cost of employer.
offered healthcare. Employee Retention Credit Family Members
Companies can be immediately repaid for the credit by lowering the quantity of payroll taxes they.