Lets talk first about How Do You Apply For Employee Retention Credit :
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 individuals actually learn about the program we ought to head to the space where we are able to display some of the checks that we are getting for business and I ‘d like to see that what is this this is uh numerous countless dollars actually Kevin hundreds of millions of dollars so these are duplicate copies of the letters that go to customers verifying that the check is on the way I mean you know if you just start to look at a few of these here I mean this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s just I indicate consider how many actual 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 validated and the check is on the mail in the mail from the IRS heading to the consumer so that’s how you have the ability to track it you understand when you
receive this you know the check is opted for sure and that’s when they pay so they do not pay anything until they really receive the cash they do not pay bottom line Wonder trust anything up until this letter is verified the check is on the way they deposit it into their savings account and they can really trust Wonder trust that the process has actually been completed and the number of you think you have actually processed given that you began this we have to do with 35 000 of these for
about six billion dollars wow so plainly they know what they’re doing and that’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 Fantastic here you’re at my YouTube channel we’re speaking about something really essential today the staff member retention credit which most of you have actually never ever become aware of I definitely hadn’t heard of it until extremely just recently and found out a lot about it since this is most likely the lowest expense of capital for any small company anywhere
anytime if you have employees between 5 and five hundred so I’ve got the professional with me this is Josh Fox he’s the creator 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 just contact your bank supervisor and say offer me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to tell 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 enjoy this program it’s disappearing very soon you got to find out all about it let’s talk employee retention credit Josh Fox what is an ERC let’s just begin there so throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act offered companies three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everybody it makes a huge difference right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the cash cash payroll tax refund alright go on sorry I just need to make sure we got that point I suggest that’s a huge difference a loan versus cash money I like money money that’s what we’re talking about fine 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 stunning tough check in the mail where you get real money from the internal revenue service all right so let’s discuss how it works since it sounds like to me if it’s a if it’s worker retention credit that individual had to be a worker 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 a business however it’s based upon you having W-2 staff members 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 qualified so you have 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 right so there were 6 quarters the program was open well walk us through the six quarters so you had quarters two 3 and 4 of 2020 and you had quarters one two and three of 2021. okay 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 how much can you get back per staff member that was on a W-2 in those six quarters so the estimation in 2020 to be specific Kevin is 50 of the employee’s salary to an optimum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers escalated to 70 of the worker’s income to an optimum of 7 thousand per quarter how did that happen um they simply altered 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 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 great deal of cash it is now there’s a caution here the PPP cash would have to be lowered from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would reduce the 26 000 so what we’re seeing typically Kevin is if you took PPP cash someplace around 10 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 workers 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 no one know about this since look when I initially became aware of this when I initially fulfilled Josh you know I have actually got great deals of investments in great deals of companies I’m a major advocate for entrepreneurship in America and make lots of lots of investments in business owners of which lots of suffered through the pandemic when I first heard about this I called BS I don’t believe it due to the fact that 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 and that were well should have and we used them carefully to survive throughout the pandemic so when I became aware of this I said nah it can’t be true however when I dug around I even contacted us to my politician buddies Guv Senators they didn’t understand about it I indicate that’s how you know that’s how misinformation is that there’s no information out there then a lot 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 nobody learn about the worker retention credit you know what’s intriguing you’re speaking about the banks Kevin because in the PPP loan procedure 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 procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s just process process that’s all um and here there was turmoil since remember in the initial cares act you could refrain from doing both programs so if you had actually done PPP you could refrain from doing ERC in the initial program and when they altered 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 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 previously do the banks do it nope the banks don’t do it the payroll companies yeah some of them are doing it as a payroll company your accounting professional no your accounting professional’s never ever done this before unless you have an account that entered into this organization and bottom line my company Kevin has actually been in business since 2009 and we have actually been working with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 business so a great deal of our big big business clients have actually dealt with bottom line to recover other federal government programs we’ve done sales tax and utilize tax unemployment 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 designed to encourage.
employers to keep workers on their payroll. The credit is 50% of up to $10,000 in earnings paid by an.
Due to the fact that of COVID-19 or whose gross invoices, company whose service is totally or partially suspended.
decline by more than 50%.
1. The credit is available to all companies no matter size including tax exempt organizations. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) little.
services who take Small company Loans.
2. To certify, 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.
during the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the equivalent quarter in 2019. When the.
company’s gross receipts go above 80% of a similar quarter in 2019 they no longer certify.
after completion of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the certifying earnings paid up to $10,000 in overall.
It works for incomes paid after March 13th and before December 31, 2020.
The definition of certifying earnings differs by whether an employer had, on average, more or less than.
100 employees in 2019.
Business that specialize in ERC filing support usually supply knowledge and assistance to assist companies navigate the intricate procedure of declaring the credit. They can offer numerous services, consisting of:.
How is the employee retention credit calculated? How Do You Apply For Employee Retention Credit
Eligibility Evaluation: These business will assess your organization’s eligibility for the ERC based upon factors such as your industry, revenue, and operations. They can assist determine if you satisfy the requirements for the credit and identify the maximum credit amount you can declare.
Paperwork and Estimation: ERC filing services will assist in gathering the essential paperwork, such as payroll records and monetary declarations, to support your claim. They will also help compute the credit amount based on qualified wages and other certifying costs.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for previous quarters, these companies can review your past payroll records and financials to determine possible opportunities for retroactive credits. They can assist you modify prior income tax return to declare these refunds.
Filing Help: Business specializing in ERC filings will prepare and submit the necessary forms and documents in your place. This consists of finishing Form 941 or any other required tax forms.
Compliance and Updates: ERC regulations and guidance have progressed in time. These companies stay upgraded with the latest modifications and make sure that your filings comply with the most existing standards. If the Internal revenue service requests additional information or performs an audit associated to your ERC claim, they can likewise provide ongoing support.
It’s important to research study and veterinarian any company offering ERC filing assistance to ensure their reliability and know-how. Search for established firms with experience in tax and payroll services, or think about reaching out to relied on accounting firms or tax specialists who offer ERC filing support.
Bear in mind that while these companies can provide valuable support, it’s constantly an excellent concept to have a fundamental understanding of the ERC requirements and procedure yourself. This will help you make informed decisions and make sure 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 procedures. The objective of the ERC is to motivate companies to maintain 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 eligible companies, consisting of for-profit businesses, tax-exempt organizations, and specific governmental entities. To certify, companies must meet 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 considerable decline in gross receipts. 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 significant decline is defined 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 Amount: 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 (as much as 70%) of qualified earnings paid to employees, consisting of specific 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: At first, organizations that received a Paycheck Protection Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 permits services to claim the ERC even if they got a PPP loan. Nevertheless, the very 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 improved, allowing eligible companies to declare the credit for certified incomes paid as far back as March 13, 2020. This retroactive arrangement offers an opportunity for businesses 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 surpasses the amount of work taxes owed, the excess can be refunded to the company.
It’s important to keep in mind that the ERC provisions and eligibility criteria have progressed over time. The very best course of action is to seek advice from a tax professional or go to the official IRS site for the most comprehensive and current info concerning the ERC, consisting of any recent legal modifications or updates.
To qualify for the ERC, a company must meet one of the following requirements:.
The business operations were completely or partially suspended due to a government order related to COVID-19.
The business experienced a significant decline in gross invoices. For 2021, a substantial decrease is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decline in gross invoices compared to the immediately preceding quarter.
The ERC is available to services of all sizes, including tax-exempt companies, but there are some exceptions. For instance, government entities and companies that received a PPP loan may have constraints on declaring the credit.
The procedure for declaring the ERC involves finishing the necessary forms and including the credit on your work income tax return (usually Form 941). The exact time it takes to process the credit can vary based upon several aspects, consisting of the complexity of your company and the work of the internal revenue service. It’s advised to talk to a tax professional for assistance particular to your situation.
There are numerous business that can help with the process of declaring the ERC. These consist of accounting firms, tax advisory services, and payroll service providers. Some widely known business that use assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research and call these companies directly to ask about their services and fees.
Please keep in mind that the information provided here is based on basic knowledge and might not reflect the most recent updates or changes to the ERC. It is very important to seek advice from a tax professional or visit the official internal revenue service website for the most updated and precise info relating to eligibility, declaring treatments, and available support.
Less than 100. The credit is based if the employer had 100 or less staff members on average in 2019.
on earnings paid to all staff members 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. The credit is if the employer had more than 100 workers on average in 2019.
allowed just for earnings paid to workers who did not work throughout the calendar quarter.
In both cases, “wages” consists of not just money payments but likewise a portion of the expense of company.
supplied health care. How Do You Apply For Employee Retention Credit
Companies can be instantly repaid for the credit by minimizing the quantity of payroll taxes they.