Lets talk first about Nonrefundable Employee Retention Credit :
Our group here what do these people doing everybody in this space is helping teach people about ERC and uh constantly supply a beautiful breakfast and have people truly learn more about the program we ought to head to the room where we are able to show some of the checks that we are getting for companies and I want to see that what is this this is uh numerous countless dollars literally Kevin hundreds of millions of dollars so these are duplicate copies of the letters that go to clients verifying that the check is on the method I imply you understand if you just begin to take a look at some 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 simply I indicate think of how many 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 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 understand when you
receive this you understand the check is gone for sure which’s when they pay so they do not pay anything up until they in fact receive the cash they don’t pay bottom line Wonder trust anything until this letter is verified the check is on the method they deposit it into their checking account and they can genuinely trust Wonder trust that the process has been completed and the number of you believe you’ve processed because you started this we’re about 35 000 of these for
about six billion dollars wow so plainly they understand what they’re doing and that’s what you need you need 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 Terrific here you’re at my YouTube channel we’re discussing something really crucial today the staff member retention credit which most of you have never become aware of I definitely hadn’t heard of it until really just recently and found out a lot about it since this is most likely the lowest cost of capital for any small business anywhere
anytime if you have workers between 5 and five hundred so I’ve got the professional with me this is Josh Fox he’s the founder and CEO of bottom line Principles they’re the largest processor of these ERC credits this is a 170 page program so it’s hard this isn’t like PPP we just call up your bank manager and state offer 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 enjoy this program it’s disappearing soon you got to discover everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just start there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act offered services three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody it makes a huge distinction right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the cash money payroll tax refund alright go on sorry I simply have to make sure we got that point I imply that’s a big difference a loan versus money cash I like cash cash 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 lovely difficult check in the mail where you get actual money from the IRS all right so let’s speak about how it works because it seems like to me if it’s a if it’s worker retention credit that person needed 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 employees right you needed to have actually 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 eligible so you need to be on payroll in 2020 on the W-2 and you need to be on payroll for the very first 6 months of 2021 on the W-2 right so there were 6 quarters the program was open well stroll us through the six quarters so you had quarters 2 3 and 4 of 2020 and you had quarters one two and 3 of 2021. fine so that’s how it’s measured you have to be on the W-2 during that duration now let’s talk my favorite part cash 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 income to a maximum of 5 thousand dollars per staff member 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 happen um they simply changed the rules in.
2021 versus since the mayhem of the pandemic so they wanted 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 approximately 5 thousand Max and then what takes place 21 000 Max in 2021 oh that’s how you develop twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per worker that is because that’s a lot of money it is now there’s a caution here the PPP money would have to be lowered from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would lower the 26 000 so what we’re seeing typically Kevin is if you took PPP money someplace 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 employees and you took PPP money you would still get a million dollar in the mail from the IRS so it’s huge obviously now the big concern is why does no one know about this due to the fact that appearance when I first heard about this when I initially satisfied Josh you know I’ve got lots of investments in lots of business I’m a significant advocate for entrepreneurship in America and make many numerous financial investments in entrepreneurs of which many suffered through the pandemic when I initially heard about this I called BS I don’t believe it because I use 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 should have and we utilized them carefully to stay alive throughout the pandemic so when I became aware of this I stated nah it can’t hold true but when I dug around I even called to my politician buddies Guv Senators they didn’t learn about it I mean that’s how you understand that’s how misinformation is that there’s no information out there then a lot of people 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 understand about the worker retention credit you know what’s intriguing you’re discussing the banks Kevin since in the PPP loan procedure 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 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 turmoil due to the fact that keep in mind in the original cares act you might refrain from doing both programs so if you had done PPP you might not do ERC in the original program and when they changed the law in 2021 the banks were not 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 actually she or he’s never done it in the past do the banks do it nope the banks do not do it the payroll companies yeah some of them are doing it as a payroll business your accountant no your accountant’s never done this prior to unless you have an account that went into this organization and bottom line my company Kevin has actually stayed in business since 2009 and we have actually been working with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 business so a lot of our huge big business clients have actually worked with bottom line to recover other government programs we’ve done sales tax and utilize tax unemployment tax work opportunity tax credits research and development tax credits unclaimed property property tax all of these other federal government programs.
The worker retention tax credit is a broad based refundable tax credit created to motivate.
companies to keep employees on their payroll. The credit is 50% of as much as $10,000 in incomes paid by an.
company whose company is fully or partly suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is available to all employers regardless of size including tax exempt organizations. There are.
just 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
organizations 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 company’s service is fully or partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the company’s gross receipts are below 50% of the similar quarter in 2019. Once the.
employer’s gross invoices exceed 80% of an equivalent quarter in 2019 they no longer qualify.
after the end of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the certifying salaries paid up to $10,000 in overall.
It is effective for salaries paid after March 13th and prior to December 31, 2020.
The definition of qualifying earnings varies by whether a company had, on average, basically than.
100 staff members in 2019.
Companies that focus on ERC filing help generally provide knowledge and support to help companies browse the complex process of declaring the credit. They can offer different services, including:.
How is the employee retention credit calculated? Nonrefundable Employee Retention Credit
Eligibility Evaluation: These business will evaluate your organization’s eligibility for the ERC based on aspects such as your industry, earnings, and operations. They can assist identify if you fulfill the requirements for the credit and determine the maximum credit amount you can claim.
Paperwork and Estimation: ERC filing services will assist in gathering the necessary documents, such as payroll records and monetary declarations, to support your claim. They will likewise help calculate the credit quantity based on qualified earnings and other qualifying expenses.
Retroactive Claim Evaluation: If you are eligible to claim the ERC for previous quarters, these business can examine your past payroll records and financials to identify possible chances for retroactive credits. They can help you change previous income tax return to claim these refunds.
Filing Assistance: Companies concentrating on ERC filings will prepare and submit the needed types and paperwork in your place. This consists of finishing Kind 941 or any other necessary tax return.
Compliance and Updates: ERC guidelines and guidance have actually evolved gradually. These companies stay updated with the most recent changes and guarantee that your filings abide by the most current standards. If the Internal revenue service requests additional information or carries out an audit related to your ERC claim, they can also offer ongoing support.
It’s important to research study and vet any business offering ERC filing assistance to ensure their credibility and competence. Search for established companies with experience in tax and payroll services, or consider connecting to relied on accounting companies or tax experts who offer ERC filing support.
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 process yourself. This will assist you make informed decisions and ensure precise filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief measures. The objective of the ERC is to motivate services to retain and pay their staff members throughout the pandemic, even if their operations have actually been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to eligible companies, consisting of for-profit organizations, tax-exempt organizations, and particular governmental entities. To certify, companies need to fulfill one of two requirements:.
Business operations were fully or partly suspended due to a government order related to COVID-19.
The business experienced a substantial decline in gross receipts. As mentioned earlier, for 2021, a substantial decline is defined as a 20% decline in gross receipts 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 same quarter in 2019, or a 20% decline in gross invoices 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 portion (as much as 70%) of certified incomes paid to workers, including certain health insurance costs. The maximum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, services that received a Paycheck Security Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 permits businesses to declare the ERC even if they received a PPP loan. The exact same wages can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively broadened and improved, enabling eligible employers to declare the credit for qualified earnings paid as far back as March 13, 2020. This retroactive provision supplies an opportunity for businesses to modify prior-year income tax return and get refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their employment tax returns, typically Type 941. The excess can be refunded to the employer if the credit surpasses the amount of employment taxes owed.
It is very important to keep in mind that the ERC arrangements and eligibility criteria have actually developed over time. The very best course of action is to speak with a tax professional or go to the official internal revenue service website for the most comprehensive and current info regarding the ERC, consisting of any current legal changes or updates.
To get approved for the ERC, a business should satisfy one of the following requirements:.
Business operations were fully or partially suspended due to a federal government order related to COVID-19.
Business experienced a considerable decline in gross receipts. For 2021, a substantial decrease is defined as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross receipts compared to the right away preceding quarter.
The ERC is offered to organizations of all sizes, including tax-exempt companies, however there are some exceptions. Federal government entities and businesses that received a PPP loan might have limitations on declaring the credit.
The procedure for declaring the ERC includes finishing the needed forms and including the credit on your employment tax return (typically Type 941). The exact time it requires to process the credit can differ based upon several factors, consisting of the complexity of your business and the workload of the IRS. It’s advised to seek advice from a tax professional for guidance particular to your circumstance.
There are numerous companies that can assist with the procedure of claiming the ERC. Some widely known companies that provide support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the information supplied here is based on basic knowledge and might not show the most current updates or changes to the ERC. It is essential to consult with a tax professional or go to the main IRS website for the most precise and current details regarding eligibility, declaring treatments, and offered assistance.
Less than 100. The credit is based if the company had 100 or fewer workers on average in 2019.
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 only for salaries paid to workers who did not work throughout the calendar quarter.
In both cases, “salaries” includes not just cash payments however also a portion of the cost of employer.
provided health care. Nonrefundable Employee Retention Credit
Companies can be right away compensated for the credit by lowering the amount of payroll taxes they.