Lets talk first about Related Individuals Employee Retention Credit :
Our group here what do these guys doing everybody in this room is helping teach people about ERC and uh always provide a gorgeous breakfast and have individuals really discover the program we ought to head to the room where we have the ability to show a few of the checks that we are getting for companies and I ‘d like to see that what is this this is uh numerous countless dollars literally Kevin hundreds of countless dollars so these are duplicate copies of the letters that go to customers confirming that the check is on the way I suggest you understand 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 imply it’s simply I suggest think about how many 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 verified and the check is on the mail in the mail from the internal revenue service heading to the consumer so that’s how you’re able to track it you know when you
get this you understand the check is chosen sure which’s when they pay so they don’t pay anything till they really receive the money they do not pay bottom line Wonder trust anything till this letter is validated the check is on the method they transfer it into their bank account and they can really trust Wonder trust that the procedure has been finished and how many you believe you’ve 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 require you require professionals 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 Fantastic here you’re at my YouTube channel we’re discussing something truly crucial today the worker retention credit which most of you have never heard of I certainly had not heard of it until extremely 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 employees 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 Principles they’re the biggest processor of these ERC credits this is a 170 page program so it’s not easy this isn’t like PPP we simply contact your bank manager and state give me a loan it does not 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 have actually 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 staff member retention credit Josh Fox what is an ERC let’s just begin there so throughout the Trump Administration when President Trump was enacted they developed the cares Act and the cares act provided companies three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically 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.
remedy the money money payroll tax refund all right go on sorry I simply have to make sure we got that point I suggest that’s a huge distinction a loan versus money money I like cash cash that’s what we’re discussing 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 original cares Act is the ERC and yes Kevin it is a stunning hard check in the mail where you get real cash from the internal revenue service all right so let’s speak about how it works due to the fact that it seems like to me if it’s a if it’s worker retention credit that person had 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 investors it’s for staff members right you needed to have actually owned a business but it’s based on you having W-2 workers 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 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 2 and 3 of 2021. okay so that’s how it’s determined you have to be on the W-2 throughout that duration now let’s talk my preferred part money just how much can you return per staff member that was on a W-2 in those 6 quarters so the calculation in 2020 to be precise Kevin is 50 of the employee’s income to an optimum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers escalated to 70 of the staff member’s income to an optimum of 7 thousand per quarter how did that take place um they just altered the rules in.
2021 versus since the chaos 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 5 thousand Max and after that what takes place 21 000 Max in 2021 oh that’s how you create twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty six thousand dollars per worker that is since that’s a lot of money it is now there’s a caution here the PPP cash would need 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 on average Kevin is if you took PPP cash someplace around 10 thousand dollars an individual so let’s say 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 undoubtedly now the huge question is why does no one understand about this since look when I initially heard about this when I initially satisfied Josh you understand I have actually got great deals of investments in great deals of companies I’m a significant supporter for entrepreneurship in America and make many numerous financial investments in business owners of which numerous suffered through the pandemic when I first found out about this I called BS I don’t believe 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 which were well should have and we utilized them carefully to stay alive during the pandemic so when I became aware of this I said nah it can’t hold true however when I dug around I even contacted us to my politician friends Guv Senators they didn’t know about it I indicate that’s how you know that’s how misinformation is that there’s no details out there then a bunch of people informed me well you can’t get it due to the fact that you took the PPP likewise not true so let’s ask Josh why does no one learn about the worker retention credit you know what’s fascinating you’re talking about the banks Kevin due to the fact that in the PPP loan process the federal government made it very 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 chaos due to the fact that remember in the initial cares act you might not do both programs so if you had done PPP you could refrain from doing ERC in the initial program and when they altered 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 federal government never made it clear to anybody about how to.
do this does your CFO know how to do this not really she or he’s never done it before do the banks do it nope the banks don’t do it the payroll companies yeah a few of them are doing it as a payroll company your accounting professional no your accountant’s never ever done this before unless you have an account that went into this business and bottom line my firm Kevin has stayed in business given that 2009 and we’ve been working with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 companies so a lot of our huge huge corporate customers have actually dealt with bottom line to recuperate other federal government programs we’ve done sales tax and utilize tax unemployment tax work chance tax credits research and development tax credits unclaimed property property tax all of these other government programs.
The staff member retention tax credit is a broad based refundable tax credit created to motivate.
companies to keep staff members on their payroll. The credit is 50% of approximately $10,000 in salaries paid by an.
company whose business is completely or partially suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
1. The credit is available to all companies despite size consisting of tax exempt companies. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) small.
services who take Small company Loans.
2. To certify, the employer has to fulfill one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s company is completely or partly suspended by government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross invoices are below 50% of the equivalent quarter in 2019. When the.
employer’s gross receipts exceed 80% of a similar quarter in 2019 they no longer certify.
after the end of that quarter.
Computation of the Credit.
The amount 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 prior to December 31, 2020.
The meaning of qualifying incomes varies by whether an employer had, typically, basically than.
100 employees in 2019.
Business that concentrate on ERC filing help normally offer know-how and support to assist organizations browse the intricate procedure of claiming the credit. They can provide various services, including:.
How is the employee retention credit calculated? Related Individuals Employee Retention Credit
Eligibility Assessment: These companies will evaluate your organization’s eligibility for the ERC based on aspects such as your market, profits, and operations. If you fulfill the requirements for the credit and determine the maximum credit quantity you can declare, they can assist figure out.
Documents and Calculation: ERC filing services will assist in gathering the necessary documentation, such as payroll records and monetary statements, to support your claim. They will also assist calculate the credit quantity based on eligible earnings and other certifying expenses.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for previous quarters, these companies can evaluate your past payroll records and financials to recognize possible chances for retroactive credits. They can help you change prior income tax return to claim these refunds.
Filing Help: Business specializing in ERC filings will prepare and submit the essential kinds and paperwork in your place. This includes completing Form 941 or any other required tax return.
Compliance and Updates: ERC policies and guidance have actually evolved with time. These companies stay upgraded with the latest changes and ensure that your filings comply with the most current guidelines. They can likewise provide continuous support if the IRS demands additional details or conducts an audit related to your ERC claim.
It is very important to research study and veterinarian any business offering ERC filing help to ensure their reliability and know-how. Search for established companies with experience in tax and payroll services, or think about reaching out to trusted accounting firms or tax experts who offer ERC submitting support.
Keep in mind that while these companies can offer valuable support, it’s always an excellent concept to have a standard understanding of the ERC requirements and process yourself. This will assist you make notified choices and guarantee 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 encourage services to keep and pay their employees throughout the pandemic, even if their operations have been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to qualified companies, consisting of for-profit companies, tax-exempt organizations, and specific governmental entities. To qualify, companies need to meet one of two requirements:.
Business operations were totally or partially suspended due to a government order related to COVID-19.
Business experienced a considerable decrease in gross invoices. As discussed previously, for 2021, a significant decline is specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decrease is specified as a 20% decline in gross invoices compared to the very same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit amount is equal to a portion (up to 70%) of certified earnings paid to staff members, consisting of particular health insurance costs. The optimum credit per staff member is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, businesses that got an Income Defense Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 permits businesses to claim the ERC even if they got a PPP loan. The 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, permitting eligible companies to claim the credit for qualified salaries paid as far back as March 13, 2020. This retroactive provision offers a chance for services to change prior-year tax returns and receive refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their employment income tax return, typically Type 941. The excess can be reimbursed to the company if the credit exceeds the quantity of employment taxes owed.
It’s important to note that the ERC arrangements and eligibility requirements have progressed over time. The very best strategy is to talk to a tax expert or go to the main internal revenue service site for the most updated and detailed information regarding the ERC, including any recent legal changes or updates.
To receive the ERC, a company needs to fulfill one of the following criteria:.
The business operations were completely or partly suspended due to a government order related to COVID-19.
Business experienced a substantial decrease in gross receipts. For 2021, a substantial decline is specified as a 20% decline in gross invoices 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 very same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
The ERC is readily available to organizations of all sizes, consisting of tax-exempt organizations, however there are some exceptions. Government entities and organizations that received a PPP loan may have constraints on claiming the credit.
The procedure for claiming 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 elements, consisting of the complexity of your company and the workload of the IRS. It’s recommended to seek advice from a tax expert for guidance particular to your situation.
There are several companies that can help with the process of declaring the ERC. These consist of accounting firms, tax advisory services, and payroll provider. Some widely known companies that offer help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research study and call these business directly to ask about their fees and services.
Please keep in mind that the details supplied here is based upon basic knowledge and may not show the most recent updates or changes to the ERC. It is very important to talk to a tax expert or go to the main internal revenue service website for the most updated and precise details 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 in fact worked or not. Simply put, even if the.
employees worked full time and got paid 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.
enabled only for wages paid to staff members who did not work during the calendar quarter.
In both cases, “salaries” includes not just money payments however also a portion of the expense of employer.
provided healthcare. Related Individuals Employee Retention Credit
Companies can be instantly compensated for the credit by lowering the amount of payroll taxes they.