Lets talk first about Employee Retention Credit Tax Exempt Income :
Our team here what do these people doing everyone in this space is helping teach individuals about ERC and uh always offer a stunning breakfast and have people actually learn more about the program we ought to head to the room where we have the ability to display some of the checks that we are getting for companies and I ‘d like to see that what is this this is uh hundreds of millions of dollars actually Kevin numerous countless dollars so these are replicate copies of the letters that go to clients validating that the check is on the way I mean you understand if you simply start 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 imply consider how many real clients that went through the program yeah this is the very end this is the celebration at the end when the check is confirmed 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 have the ability to track it you know when you
receive this you know the check is gone for sure which’s when they pay so they don’t pay anything until they really receive the money they don’t pay bottom line Wonder trust anything up until this letter is verified the check is on the method they deposit it into their checking account and they can really trust 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 have to do with 35 000 of these for
about 6 billion dollars wow so plainly they understand 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 one of these that’s what matters all right Mr Terrific here you’re at my YouTube channel we’re discussing something really important today the employee retention credit which most of you have never become aware of I certainly hadn’t become aware of it till extremely recently and found out a lot about it because this is probably the lowest cost of capital for any small company anywhere
anytime if you have staff members in between five and five hundred so I have actually got the specialist 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 challenging this isn’t like PPP we just phone your bank manager and state offer me a loan it doesn’t 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’ve ended up being yes the Ambassador and paid representative for this I love this program it’s going away very soon you got to find out all 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 came up with the cares Act and the cares act provided organizations 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everyone it makes a big distinction right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the money cash payroll tax refund all right go on sorry I simply have to make certain we got that point I mean that’s a huge difference a loan versus cash cash I like money money that’s what we’re speaking about 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 gorgeous tough check in the mail where you get actual 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 staff member retention credit that individual had to be an employee so I’m going to make the Assumption 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 actually owned a business however it’s based on you having W-2 employees in America not 10.99. so as long as you had W-2 staff members and you paid federal payroll taxes that’s why you would be eligible so you need to be on payroll in 2020 on the W-2 and you need to be on payroll for the first six months of 2021 on the W-2 appropriate 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 two and 3 of 2021. alright so that’s how it’s measured you have to be on the W-2 during that period now let’s talk my favorite part cash just how much can you return per worker that was on a W-2 in those six quarters so the estimation in 2020 to be precise Kevin is 50 of the employee’s wage 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 simply changed the rules in.
2021 versus because 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 then what takes place 21 000 Max in 2021 oh that’s how you come up with twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty six thousand dollars per employee that is because that’s a great deal of cash it is now there’s a caution 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 decrease the 26 000 so what we’re seeing typically Kevin is if you took PPP cash someplace 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 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 no one know about this due to the fact that look when I first heard about this when I first met Josh you understand I have actually got lots of financial investments in lots of business 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 first heard about this I called BS I do not think it due to the fact that I use 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 and that were well should have and we used them carefully to stay alive during the pandemic so when I found out about this I said nah it can’t be true however when I dug around I even contacted us to my political leader buddies Governor Senators they didn’t learn about it I imply that’s how you understand that’s how false information is that there’s no information out there then a bunch of individuals told me well you can’t get it because you took the PPP likewise not true so let’s ask Josh why does no one understand about the employee retention credit you understand what’s intriguing you’re speaking about the banks Kevin due to the fact that in the PPP loan process the federal government made it very clear that if you desired a PPP loan you would call Wells Fargo Citibank Bank of America any of the big 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 simply process procedure that’s all um and here there was turmoil because remember in the initial cares act you could refrain from doing both programs so if you had actually done PPP you might refrain from doing ERC in the initial program and when they changed the law in 2021 the banks were refraining from doing ERC because it’s not alone so you’re getting a tax refund so the federal government never ever made it clear to any person about how to.
do this does your CFO understand how to do this not really 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 accountant’s never ever done this prior to unless you have an account that entered into this business and bottom line my firm Kevin has actually been in business because 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 huge big business clients have dealt 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 property tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit designed to motivate.
employers to keep employees on their payroll. The credit is 50% of as much as $10,000 in wages paid by an.
Since of COVID-19 or whose gross invoices, employer whose organization is fully or partially suspended.
decrease by more than 50%.
1. The credit is available to all companies no matter size including tax exempt organizations. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
services who take Small company Loans.
2. To qualify, the employer has to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s business is fully or partly suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross receipts are below 50% of the similar quarter in 2019. When the.
employer’s gross invoices go above 80% of a similar quarter in 2019 they no longer qualify.
after completion of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the certifying wages paid up to $10,000 in overall.
It works for earnings paid after March 13th and before December 31, 2020.
The meaning of qualifying wages differs by whether an employer had, typically, more or less than.
100 workers in 2019.
Companies that concentrate on ERC filing support typically supply know-how and assistance to assist organizations navigate the complex process of declaring the credit. They can use various services, including:.
How is the employee retention credit calculated? Employee Retention Credit Tax Exempt Income
Eligibility Assessment: These business will evaluate your organization’s eligibility for the ERC based upon aspects such as your market, revenue, and operations. If you satisfy the requirements for the credit and recognize the maximum credit amount you can declare, they can help determine.
Paperwork and Calculation: ERC filing services will assist in gathering the essential paperwork, such as payroll records and financial declarations, to support your claim. They will also help calculate the credit amount based on eligible incomes and other certifying expenses.
Retroactive Claim Review: If you are eligible to claim the ERC for prior quarters, these business can examine your past payroll records and financials to determine prospective chances for retroactive credits. They can help you amend prior income tax return to declare these refunds.
Filing Assistance: Business focusing on ERC filings will prepare and send the essential types and documents in your place. This includes finishing Kind 941 or any other required tax forms.
Compliance and Updates: ERC regulations and assistance have progressed gradually. These companies remain updated with the most recent changes and make sure that your filings adhere to the most present guidelines. They can also offer continuous support if the internal revenue service requests additional details or conducts an audit related to your ERC claim.
It is very important to research and veterinarian any company providing ERC filing assistance to guarantee their reliability and know-how. Search for recognized companies with experience in tax and payroll services, or think about connecting to trusted accounting companies or tax specialists who provide ERC submitting support.
Bear in mind that while these companies can provide valuable help, it’s always a good idea to have a fundamental understanding of the ERC requirements and process yourself. This will assist you make notified decisions and make sure accurate filings.
The Worker 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 motivate organizations to keep and pay their employees 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 eligible companies, including for-profit businesses, tax-exempt organizations, and certain governmental entities. To qualify, companies need to satisfy one of two criteria:.
The business operations were completely or partially suspended due to a federal government order related to COVID-19.
Business experienced a significant decrease in gross invoices. As pointed out earlier, for 2021, a significant decrease is specified as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decline in gross invoices compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the right away 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 (as much as 70%) of qualified wages paid to employees, consisting of certain health insurance costs. 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, businesses that got an Income Defense Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 allows businesses to declare the ERC even if they received a PPP loan. However, the same wages can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and enhanced, allowing qualified companies to claim the credit for certified wages paid as far back as March 13, 2020. This retroactive arrangement offers a chance for companies to amend prior-year tax returns and get refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their employment income tax return, usually Kind 941. If the credit goes beyond the amount of employment taxes owed, the excess can be reimbursed to the company.
It’s important to keep in mind that the ERC arrangements and eligibility requirements have progressed gradually. The very best strategy is to consult with a tax expert or check out the main internal revenue service website for the most comprehensive and up-to-date details relating to the ERC, including any recent legislative modifications or updates.
To receive the ERC, a service must meet among the following requirements:.
Business operations were completely or partially suspended due to a federal government order related to COVID-19.
The business experienced a considerable decrease in gross invoices. For 2021, a substantial decline is defined as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decline in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross receipts compared to the immediately preceding quarter.
The ERC is offered to organizations of all sizes, consisting of tax-exempt organizations, but there are some exceptions. For example, government entities and businesses that received a PPP loan might have constraints on claiming the credit.
The procedure for declaring the ERC involves completing the necessary kinds and including the credit on your work tax return (normally Kind 941). The exact time it requires to process the credit can vary based upon a number of aspects, consisting of the complexity of your company and the work of the IRS. It’s suggested to speak with a tax professional for guidance particular to your circumstance.
There are a number of business that can help with the procedure of declaring the ERC. Some widely known companies that provide help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the details offered here is based on basic understanding and might not reflect the most current updates or changes to the ERC. It is necessary to consult with a tax professional or visit the main internal revenue service website for the most precise and updated info concerning eligibility, declaring treatments, and available help.
Less than 100. The credit is based if the employer had 100 or less workers on average in 2019.
on incomes paid to all staff members whether they really worked or not. To put it simply, even if the.
employees worked full-time and made money for full time work, the company still gets the credit.
Greater than 100. If the employer had more than 100 employees on average in 2019, then the credit is.
allowed only for earnings paid to employees who did not work during the calendar quarter.
In both cases, “wages” consists of not just money payments but also a portion of the expense of employer.
offered healthcare. Employee Retention Credit Tax Exempt Income
Employers can be right away repaid for the credit by minimizing the amount of payroll taxes they.