Lets talk first about Section 2301 Employee Retention Credit :
Our team here what do these guys doing everybody in this room is assisting teach individuals about ERC and uh always offer a beautiful breakfast and have people really find out about the program we must head to the room where we are able to show a few of the checks that we are getting for business and I wish to see that what is this this is uh numerous countless dollars actually Kevin numerous countless dollars so these are replicate copies of the letters that go to customers validating that the check is on the way I suggest 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 imply it’s just I imply think of how many actual clients 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 confirmed and the check is on the mail in the mail from the IRS heading to the client so that’s how you have the ability to track it you understand when you
get this you understand the check is opted for sure which’s when they pay so they do not pay anything up until they really receive the cash they don’t pay bottom line Wonder trust anything until this letter is confirmed the check is on the way they transfer it into their checking account and they can truly trust Wonder trust that the process has been finished and how many you think you have actually processed given that you started this we have to do with 35 000 of these for
about six billion dollars wow so plainly they understand what they’re doing which’s what you need you require experts 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 Wonderful here you’re at my YouTube channel we’re talking about something truly crucial today the staff member retention credit which the majority of you have actually never ever heard of I definitely hadn’t heard of it until extremely recently and discovered a lot about it because this is probably the lowest expense of capital for any small business anywhere
anytime if you have workers between 5 and five hundred so I’ve got the specialist with me this is Josh Fox he’s the creator and CEO of bottom line Principles they’re the largest 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 say offer me a loan it does not 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 enjoy this program it’s going away soon you got to discover everything about it let’s talk worker retention credit Josh Fox what is an ERC let’s simply begin there so throughout the Trump Administration when President Trump was enacted they developed the cares Act and the cares act offered organizations 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody it makes a big distinction right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the money money payroll tax refund fine go on sorry I just need to make sure we got that point I mean that’s a huge difference a loan versus cash money I like cash money that’s what we’re talking about okay 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 lovely difficult check in the mail where you get actual money from the IRS 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 person needed to be an employee 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 workers right you had to have actually owned a company but it’s based on you having W-2 employees in America not 10.99. 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 have to be on payroll for the very first 6 months of 2021 on the W-2 appropriate so there were six quarters the program was open well stroll us through the 6 quarters so you had quarters 2 three and 4 of 2020 and you had quarters one two and three 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 money just how much can you return per worker that was on a W-2 in those 6 quarters so the calculation in 2020 to be exact Kevin is 50 of the staff member’s wage to a maximum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the worker’s wage to an optimum of 7 thousand per quarter how did that occur um they just changed the rules in.
2021 versus because the mayhem of the pandemic so they wished 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 up to 5 thousand Max and then 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 six thousand dollars per worker that is since that’s a great deal of money it is now there’s a caveat here the PPP money would have to be minimized from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would decrease the 26 000 so what we’re seeing usually Kevin is if you took PPP cash somewhere around ten thousand dollars a person so let’s state hypothetically you owned a restaurant in New York City where I’m from and you had a hundred workers and you took PPP cash you would still get a million dollar in the mail from the IRS so it’s substantial undoubtedly now the huge concern is why does nobody understand about this since appearance when I first found out about this when I initially met Josh you know I’ve got lots of financial investments in lots of companies I’m a significant advocate for entrepreneurship in America and make many many financial investments in entrepreneurs of which lots of suffered through the pandemic when I first heard about this I called BS I don’t think it since I use the PPP we went through the cash center Banks to get it it was really easy to do we had our CEOs call the banks they got their loans and that were well been worthy of and we utilized them carefully to stay alive during the pandemic so when I found out about this I stated nah it can’t be true but when I dug around I even called to my political leader good friends Governor Senators they didn’t know about it I imply that’s how you know that’s how false information is that there’s no information out there then a lot of individuals informed 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 understand about the staff member retention credit you understand what’s fascinating you’re discussing the banks Kevin due to the fact that in the PPP loan process 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 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 just process procedure that’s all um and here there was mayhem because remember in the original cares act you could refrain from doing both programs so if you had done PPP you could 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 made it clear to any person about how to.
do this does your CFO understand how to do this not truly she or he’s never ever done it in the past 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 accountant no your accounting professional’s never done this prior to unless you have an account that entered into this business and bottom line my company Kevin has actually stayed in business because 2009 and we’ve been working with the federal government and the state government to recover money for Fortune 500 Fortune 1000 companies so a great deal of our big huge corporate clients have dealt with bottom line to recuperate other federal government programs we have actually done sales tax and utilize tax joblessness tax work opportunity tax credits research and development tax credits unclaimed home real estate tax all of these other federal government programs.
The worker retention tax credit is a broad based refundable tax credit developed to encourage.
companies to keep staff members on their payroll. The credit is 50% of up to $10,000 in wages paid by an.
employer whose business is completely or partially suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
1. The credit is offered to all employers no matter size including tax exempt companies. 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 needs to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s business is completely or partially suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the equivalent quarter in 2019. Once the.
employer’s gross invoices go above 80% of an equivalent quarter in 2019 they no longer qualify.
after completion of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the certifying earnings paid up to $10,000 in total.
It is effective for salaries paid after March 13th and prior to December 31, 2020.
The meaning of qualifying salaries varies by whether an employer had, usually, more or less than.
100 employees in 2019.
Business that concentrate on ERC filing support typically supply competence and support to help businesses navigate the complicated process of claiming the credit. They can use numerous services, including:.
How is the employee retention credit calculated? Section 2301 Employee Retention Credit
Eligibility Evaluation: These business will evaluate your service’s eligibility for the ERC based on elements such as your market, profits, and operations. If you fulfill the requirements for the credit and recognize the optimum credit quantity you can claim, they can help determine.
Documents and Computation: ERC filing services will help in gathering the necessary documents, such as payroll records and financial declarations, to support your claim. They will likewise help calculate the credit amount based upon qualified wages and other qualifying expenses.
Retroactive Claim Evaluation: If you are eligible to claim the ERC for previous quarters, these business can review 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: Companies specializing in ERC filings will prepare and submit the needed types and documentation on your behalf. This consists of completing Kind 941 or any other necessary tax forms.
Compliance and Updates: ERC policies and guidance have actually progressed with time. These companies stay updated with the current modifications and make sure that your filings adhere to the most existing standards. They can also supply ongoing assistance if the internal revenue service requests additional info or carries out an audit related to your ERC claim.
It is essential to research study and vet any business providing ERC filing help to ensure their credibility and competence. Search for recognized companies with experience in tax and payroll services, or think about connecting to trusted accounting firms or tax professionals who use ERC filing support.
Bear in mind that while these companies can supply valuable assistance, it’s constantly an excellent concept to have a fundamental understanding of the ERC requirements and procedure yourself. This will assist you make informed decisions and make sure precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief steps. The goal of the ERC is to encourage organizations to maintain and pay their workers throughout the pandemic, even if their operations have actually been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is available to qualified employers, consisting of for-profit services, tax-exempt companies, and particular governmental entities. To certify, companies should meet one of two criteria:.
Business operations were fully or partially suspended due to a government order related to COVID-19.
Business experienced a considerable decline in gross receipts. As pointed out earlier, for 2021, a significant decrease is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decline in gross invoices 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 employer’s share of Social Security taxes. The credit amount is equal to a portion (up to 70%) of qualified wages paid to employees, including specific health plan 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: At first, organizations that got a Paycheck Protection Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 enables organizations to claim the ERC even if they received a PPP loan. However, the very same incomes can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and boosted, allowing eligible employers to declare the credit for qualified earnings paid as far back as March 13, 2020. This retroactive arrangement offers a chance for companies to amend prior-year income tax return and get refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their work income tax return, typically Kind 941. If the credit exceeds the quantity of work taxes owed, the excess can be reimbursed to the company.
It’s important to keep in mind that the ERC arrangements and eligibility criteria have developed gradually. The very best course of action is to speak with a tax professional or visit the main IRS website for the most updated and detailed info concerning the ERC, including any recent legislative changes or updates.
To get approved for the ERC, an organization must fulfill among the following criteria:.
Business operations were totally or partially suspended due to a government order related to COVID-19.
The business experienced a considerable decrease in gross receipts. For 2021, a considerable decline is defined as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
The ERC is available to businesses of all sizes, consisting of tax-exempt companies, however there are some exceptions. Government entities and businesses that got a PPP loan may have limitations on claiming the credit.
The procedure for claiming the ERC involves finishing the needed kinds and including the credit on your employment tax return (generally Kind 941). The exact time it requires to process the credit can vary based on several elements, including the complexity of your business and the workload of the IRS. It’s suggested to seek advice from a tax expert for assistance specific to your circumstance.
There are several companies that can help with the process of declaring the ERC. Some well-known companies that use support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the details offered here is based upon general knowledge and might not reflect the most current updates or modifications to the ERC. It is essential to seek advice from a tax expert or check out the official IRS website for the most updated and precise information relating to eligibility, claiming treatments, and readily available assistance.
Less than 100. The credit is based if the company had 100 or fewer staff members on average in 2019.
on salaries paid to all employees whether they actually worked or not. Simply put, even if the.
workers worked full time and earned money for full-time work, the company still gets the credit.
Greater than 100. The credit is if the company had more than 100 workers on average in 2019.
allowed only for salaries paid to employees who did not work during the calendar quarter.
In both cases, “earnings” includes not simply cash payments however likewise a portion of the cost of employer.
supplied healthcare. Section 2301 Employee Retention Credit
Companies can be right away reimbursed for the credit by decreasing the amount of payroll taxes they.