Lets talk first about Full Time Equivalent Employee Retention Credit :
Our team here what do these people doing everyone in this space is assisting teach individuals about ERC and uh constantly provide a lovely breakfast and have people actually find out about the program we ought to head to the room where we are able to display a few of the checks that we are getting for companies 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 way I suggest you understand if you just begin to look at a few of these here I suggest this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I imply it’s just I suggest think about the number of actual 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 verified and the check is on the mail in the mail from the IRS 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 gone for sure and that’s when they pay so they don’t pay anything until they really get the cash they do not pay bottom line Wonder trust anything till this letter is verified the check is on the way they deposit it into their savings account and they can genuinely rely on Wonder trust that the process has actually been completed and how many you believe you have actually processed considering that you started this we have to do with 35 000 of these for
about 6 billion dollars wow so clearly they understand 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 one of these that’s what matters all right Mr Wonderful here you’re at my YouTube channel we’re discussing something really crucial today the employee retention credit which the majority of you have actually never ever heard of I certainly hadn’t become aware of it till very 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 employees 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 Concepts 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 call your bank supervisor and say offer me a loan it does not 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 going away 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 came up with the cares Act and the cares act provided companies 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everyone it makes a big difference right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
fix the cash money payroll tax refund alright go on sorry I just have to ensure we got that point I imply that’s a huge difference a loan versus money money I like cash cash that’s what we’re discussing alright 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 tough check in the mail where you get real money from the IRS 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 employee retention credit that person needed to be a staff member so I’m going to make the Presumption this cash is not for the owner not for individuals on the cap table not for shareholders it’s for workers right you needed to have actually owned an organization but it’s based upon you having W-2 staff members 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 eligible so you need to be on payroll in 2020 on the W-2 and you have to be on payroll for the first six months of 2021 on the W-2 correct so there were 6 quarters the program was open well walk us through the six quarters so you had quarters 2 three and four of 2020 and you had quarters one 2 and three of 2021. fine so that’s how it’s measured you need to be on the W-2 throughout that duration now let’s talk my favorite part money 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 exact Kevin is 50 of the employee’s salary to an optimum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the employee’s salary to a maximum of 7 thousand per quarter how did that take place um they simply altered the rules in.
2021 versus because the mayhem 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 up to five thousand Max and after that what takes place 21 000 Max in 2021 oh that’s how you develop 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 because that’s a lot of money it is now there’s a caution here the PPP money would need to be minimized from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would minimize the 26 000 so what we’re seeing typically Kevin is if you took PPP money somewhere around ten thousand dollars an individual so let’s state hypothetically you owned a dining establishment in New york city 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 substantial clearly now the huge question is why does no one know about this due to the fact that look when I first became aware of this when I initially met Josh you know I’ve got lots of financial investments in lots of business I’m a significant supporter for entrepreneurship in America and make numerous lots of financial investments in business owners of which lots of suffered through the pandemic when I initially found out about this I called BS I do not believe it due to the fact that I use the PPP we went through the cash 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 should have and we utilized them wisely to stay alive throughout the pandemic so when I heard about this I stated nah it can’t hold true but when I dug around I even called to my political leader pals Guv Senators they didn’t learn about it I indicate that’s how you know that’s how misinformation is that there’s no information out there then a bunch of individuals told me well you can’t get it due to the fact that you took the PPP also not true so let’s ask Josh why does no one know about the staff member retention credit you know what’s interesting you’re discussing the banks Kevin due to the fact that in the PPP loan procedure the federal government made it really clear that if you wanted 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 simply process procedure that’s all um and here there was turmoil due to the fact that remember in the original cares act you might not do both programs so if you had actually done PPP you might not do ERC in the initial program and when they changed 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 anyone about how to.
do this does your CFO know how to do this not really he or she’s never ever done it previously do the banks do it nope the banks do not do it the payroll companies yeah a few of them are doing it as a payroll business your accounting professional no your accountant’s never done this prior to unless you have an account that entered into this business and bottom line my company Kevin has been in business considering that 2009 and we’ve been dealing with the federal government and the state federal government to recuperate cash for Fortune 500 Fortune 1000 companies so a great deal of our huge huge business customers have worked with bottom line to recover other government programs we’ve done sales tax and use tax joblessness tax work opportunity tax credits research and development tax credits unclaimed home property tax all of these other government programs.
The staff member retention tax credit is a broad based refundable tax credit created to encourage.
employers to keep employees on their payroll. The credit is 50% of as much as $10,000 in salaries paid by an.
company whose business is fully or partially suspended because of COVID-19 or whose gross invoices.
decrease by more than 50%.
1. The credit is readily available to all employers no matter size consisting of tax exempt organizations. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) small.
organizations who take Small company Loans.
2. To qualify, the employer has to satisfy one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s organization is totally or partially suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross invoices are listed below 50% of the similar quarter in 2019. Once the.
company’s gross receipts go above 80% of an equivalent quarter in 2019 they no longer certify.
after the end of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the qualifying earnings paid up to $10,000 in overall.
It works for incomes paid after March 13th and prior to December 31, 2020.
The definition of certifying salaries differs by whether an employer had, typically, more or less than.
100 staff members in 2019.
Business that specialize in ERC filing assistance generally provide expertise and assistance to assist companies browse the complicated procedure of declaring the credit. They can use various services, including:.
How is the employee retention credit calculated? Full Time Equivalent Employee Retention Credit
Eligibility Evaluation: These business will evaluate your service’s eligibility for the ERC based on factors such as your industry, profits, and operations. If you meet the requirements for the credit and identify the maximum credit quantity you can claim, they can help determine.
Documentation and Computation: ERC filing services will help in collecting the essential documents, such as payroll records and financial declarations, to support your claim. They will also assist determine the credit quantity based on qualified incomes and other qualifying expenses.
Retroactive Claim Evaluation: If you are eligible to claim the ERC for prior quarters, these companies can examine your previous payroll records and financials to identify potential opportunities for retroactive credits. They can assist you modify previous income tax return to declare these refunds.
Filing Support: Companies focusing on ERC filings will prepare and send the needed kinds and documents on your behalf. This includes completing Type 941 or any other necessary tax return.
Compliance and Updates: ERC policies and guidance have evolved gradually. These companies stay upgraded with the latest changes and ensure that your filings adhere to the most existing standards. If the Internal revenue service requests extra information or conducts an audit associated to your ERC claim, they can also provide ongoing support.
It is essential to research study and vet any business offering ERC filing assistance to guarantee their credibility and knowledge. Search for established firms with experience in tax and payroll services, or think about reaching out to trusted accounting firms or tax experts who offer ERC filing assistance.
Bear in mind that while these companies can provide important assistance, it’s constantly a great idea to have a fundamental understanding of the ERC requirements and process yourself. This will help you make notified choices and make sure precise filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief steps. The objective of the ERC is to encourage companies to maintain and pay their staff members throughout the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to eligible companies, including for-profit organizations, tax-exempt organizations, and particular governmental entities. To qualify, employers need to meet one of two requirements:.
The business operations were completely or partially suspended due to a government order related to COVID-19.
Business experienced a considerable decline in gross receipts. As discussed previously, for 2021, a considerable decrease is defined 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% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decrease 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 portion (up to 70%) of certified salaries paid to workers, including certain health plan expenditures. The optimum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, businesses that got a Paycheck Defense Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 allows companies to declare the ERC even if they got a PPP loan. The same incomes can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and improved, permitting eligible companies to declare the credit for certified earnings paid as far back as March 13, 2020. This retroactive provision offers an opportunity for services to modify prior-year income tax return and receive refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their work income tax return, normally Type 941. The excess can be refunded to the employer if the credit exceeds the quantity of work taxes owed.
It is essential to keep in mind that the ERC arrangements and eligibility requirements have actually evolved over time. The best strategy is to speak with a tax expert or go to the main IRS site for the most current and detailed information concerning the ERC, consisting of any recent legal changes or updates.
To get approved for the ERC, a business must satisfy one of the following requirements:.
The business operations were fully or partly suspended due to a federal government order related to COVID-19.
The business experienced a considerable decrease in gross invoices. For 2021, a significant decrease is specified as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decline in gross receipts compared to the exact same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
The ERC is readily available to businesses of all sizes, including tax-exempt companies, but there are some exceptions. Federal government entities and services that got a PPP loan may have limitations on declaring the credit.
The process for claiming the ERC includes finishing the needed types and consisting of the credit on your employment tax return (typically Form 941). The exact time it requires to process the credit can differ based on several aspects, consisting of the intricacy of your company and the work of the IRS. It’s recommended to speak with a tax professional for guidance particular to your situation.
There are a number of business that can help with the process of declaring the ERC. Some popular business that offer assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the details provided here is based on general understanding and might not reflect the most current updates or changes to the ERC. It is necessary to seek advice from a tax expert or visit the official internal revenue service website for the most precise and current information relating to eligibility, claiming procedures, and offered assistance.
Less than 100. If the employer had 100 or fewer employees typically in 2019, then the credit is based.
on earnings paid to all workers whether they actually 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 workers on average in 2019, then the credit is.
permitted just for salaries paid to employees who did not work during the calendar quarter.
In both cases, “earnings” includes not simply cash payments but also a portion of the cost of company.
supplied healthcare. Full Time Equivalent Employee Retention Credit
Employers can be right away reimbursed for the credit by minimizing the amount of payroll taxes they.