Lets talk first about Section 3134 Employee Retention Credit :
Our team here what do these people doing everybody in this room is helping teach individuals about ERC and uh always supply a stunning breakfast and have individuals truly discover the program we need 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 millions of dollars literally Kevin numerous countless dollars so these are replicate copies of the letters that go to clients verifying that the check is on the method I mean you understand if you simply start to look at some 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 simply I imply think about the number of 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 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 have the ability to track it you understand when you
receive this you understand the check is opted for sure which’s when they pay so they don’t pay anything up until they really get the money they do not pay bottom line Wonder trust anything till this letter is verified the check is on the method they transfer it into their bank account and they can truly trust Wonder trust that the process has actually been finished and how many you believe you have actually processed considering that you started this we’re about 35 000 of these for
about six billion dollars wow so plainly they know 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 Fantastic here you’re at my YouTube channel we’re discussing something actually crucial today the worker retention credit which the majority of you have never ever become aware of I definitely hadn’t become aware of it up until very recently and learned a lot about it due to the fact that this is most likely the most affordable cost of capital for any small business anywhere
anytime if you have staff members between 5 and five hundred so I’ve got the expert with me this is Josh Fox he’s the founder and CEO of bottom line Ideas 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 phone your bank supervisor and state 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 have actually become yes the Ambassador and paid representative for this I love this program it’s going away soon you got to learn everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply begin there so throughout the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act used businesses three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everyone it makes a huge distinction right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the cash cash payroll tax refund all right go on sorry I just need to ensure we got that point I suggest that’s a huge difference a loan versus cash money I like cash cash 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 gorgeous difficult check in the mail where you get actual cash from the IRS all right so let’s speak about how it works because it sounds like to me if it’s a if it’s employee retention credit that individual needed to be a staff member so I’m going to make the Presumption this money 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 upon you having W-2 workers in America not 10.99. As long as you had W-2 employees 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 first 6 months of 2021 on the W-2 proper 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. all right so that’s how it’s measured you need to be on the W-2 during that duration now let’s talk my preferred part cash just how much can you get back per worker that was on a W-2 in those 6 quarters so the computation in 2020 to be exact Kevin is 50 of the worker’s wage to a maximum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers escalated to 70 of the staff member’s wage to an optimum of seven thousand per quarter how did that happen um they just altered the rules in.
2021 versus since 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 up to five thousand Max and then what happens 21 000 Max in 2021 oh that’s how you develop 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 lot of cash it is now there’s a caution here the PPP money would need to be decreased from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would reduce the 26 000 so what we’re seeing on average Kevin is if you took PPP money somewhere around ten thousand dollars a person so let’s state hypothetically you owned a dining establishment 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 clearly now the big concern is why does nobody learn about this because appearance when I first became aware of this when I initially fulfilled Josh you know I have actually got great deals of financial investments in great deals of business I’m a significant advocate for entrepreneurship in America and make many many investments in business owners of which numerous suffered through the pandemic when I initially became aware of this I called BS I don’t believe it because I utilize 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 and that were well been worthy of and we utilized them wisely to stay alive throughout the pandemic so when I heard about this I said nah it can’t hold true but when I dug around I even contacted us to my political leader buddies Guv Senators they didn’t learn about it I imply that’s how you understand that’s how false information is that there’s no information out there then a lot of people told me well you can’t get it because you took the PPP also not real so let’s ask Josh why does nobody know about the employee retention credit you know what’s fascinating you’re speaking about the banks Kevin due to the fact that in the PPP loan process 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 procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply process process that’s all um and here there was turmoil because keep in mind 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 changed the law in 2021 the banks were not doing ERC because it’s not alone so you’re getting a tax refund so the federal government never ever made it clear to any person about how to.
do this does your CFO understand how to do this not really he or she’s never ever 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 accounting professional no your accounting professional’s never done this before unless you have an account that went into this service and bottom line my firm Kevin has actually been in business considering that 2009 and we have actually been dealing with the federal government and the state government to recuperate money for Fortune 500 Fortune 1000 companies so a great deal of our big huge corporate customers have actually dealt with bottom line to recuperate other government programs we have actually done sales tax and use tax joblessness tax work chance tax credits research and development tax credits unclaimed property real estate tax all of these other federal government programs.
The worker retention tax credit is a broad based refundable tax credit created to encourage.
companies to keep employees on their payroll. The credit is 50% of approximately $10,000 in incomes paid by an.
Because of COVID-19 or whose gross receipts, company whose business is fully or partly suspended.
decrease by more than 50%.
1. The credit is offered to all employers despite size consisting of tax exempt organizations. There are.
just 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
organizations who take Small company Loans.
2. To certify, the employer needs to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s business is completely or partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the company’s gross invoices are below 50% of the comparable quarter in 2019. Once the.
company’s gross receipts exceed 80% of an equivalent quarter in 2019 they no longer qualify.
after completion of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the qualifying wages paid up to $10,000 in total.
It works for salaries paid after March 13th and before December 31, 2020.
The meaning of certifying wages differs by whether an employer had, usually, basically than.
100 employees in 2019.
Companies that concentrate on ERC filing support normally provide proficiency and assistance to assist services browse the complicated process of claiming the credit. They can provide different services, including:.
How is the employee retention credit calculated? Section 3134 Employee Retention Credit
Eligibility Evaluation: These companies will examine your organization’s eligibility for the ERC based upon elements such as your industry, revenue, and operations. They can help figure out if you satisfy the requirements for the credit and recognize the optimum credit amount you can claim.
Documentation and Computation: ERC filing services will help in gathering the necessary documentation, such as payroll records and financial declarations, to support your claim. They will also assist calculate the credit quantity based on qualified salaries and other certifying costs.
Retroactive Claim Review: If you are eligible to claim the ERC for prior quarters, these business can examine your previous payroll records and financials to identify prospective chances for retroactive credits. They can assist you amend prior tax returns to claim these refunds.
Filing Assistance: Business specializing in ERC filings will prepare and send the required kinds and documentation on your behalf. This includes finishing Kind 941 or any other required tax return.
Compliance and Updates: ERC policies and guidance have actually progressed with time. These business stay upgraded with the most recent changes and make sure that your filings abide by the most current guidelines. They can also supply continuous support if the internal revenue service demands additional info or performs an audit related to your ERC claim.
It is essential to research study and veterinarian any company providing ERC filing help to guarantee their credibility and competence. Look for established companies with experience in tax and payroll services, or consider reaching out to trusted accounting firms or tax professionals who provide ERC filing support.
Remember that while these companies can supply important assistance, it’s always a good concept to have a fundamental understanding of the ERC requirements and process yourself. This will assist you make notified choices and guarantee precise filings.
The Worker Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief steps. The objective of the ERC is to motivate services to keep and pay their workers during the pandemic, even if their operations have been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to eligible companies, including for-profit organizations, tax-exempt companies, and certain governmental entities. To qualify, employers need to satisfy one of two requirements:.
The business operations were totally or partially suspended due to a federal government order related to COVID-19.
The business experienced a substantial decrease in gross receipts. As pointed out previously, for 2021, a significant decrease is specified as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decline in gross receipts compared to the very same quarter in 2019, or a 20% decrease 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 (approximately 70%) of qualified wages paid to employees, consisting of specific health insurance expenditures. 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, companies that received an Income Security Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 enables businesses to declare the ERC even if they got a PPP loan. The exact same wages can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and improved, enabling qualified employers to declare the credit for qualified salaries paid as far back as March 13, 2020. This retroactive provision offers a chance for businesses to modify prior-year income tax return and get refunds.
Claiming the Credit: Companies can declare the ERC by reporting it on their work income tax return, typically Type 941. If the credit surpasses the amount of work taxes owed, the excess can be refunded to the company.
It is very important to keep in mind that the ERC provisions and eligibility requirements have progressed with time. The best strategy is to seek advice from a tax professional or visit the official internal revenue service website for the most detailed and current information concerning the ERC, including any recent legislative modifications or updates.
To get approved for the ERC, a business needs to fulfill among 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 substantial decline in gross invoices. For 2021, a substantial decline is defined as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
The ERC is available to companies of all sizes, including tax-exempt companies, however there are some exceptions. For instance, federal government entities and services that got a PPP loan might have restrictions on declaring the credit.
The process for claiming the ERC involves completing the essential types and including the credit on your employment income tax return (usually Type 941). The exact time it takes to process the credit can differ based upon a number of factors, including the intricacy of your company and the work of the internal revenue service. It’s recommended to talk to a tax professional for assistance specific to your scenario.
There are several business that can assist with the procedure of claiming the ERC. These include accounting firms, tax advisory services, and payroll service providers. Some well-known business that offer assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research and contact these business directly to ask about their charges and services.
Please note that the info offered here is based upon basic knowledge and might not show the most recent updates or changes to the ERC. It is very important to talk to a tax expert or visit the main internal revenue service site for the most current and precise info regarding eligibility, claiming treatments, and available help.
Less than 100. If the employer had 100 or fewer workers on average in 2019, then the credit is based.
on salaries paid to all employees whether they really worked or not. Simply put, even if the.
employees worked full-time and earned money for full time work, the employer still gets the credit.
Greater than 100. The credit is if the employer had more than 100 employees on average in 2019.
allowed only for earnings paid to workers who did not work during the calendar quarter.
In both cases, “earnings” consists of not simply money payments however also a part of the cost of company.
provided healthcare. Section 3134 Employee Retention Credit
Employers can be right away repaid for the credit by lowering the quantity of payroll taxes they.