Lets talk first about Understanding Employee Retention Credit :
Our group here what do these guys doing everybody in this room is helping teach people about ERC and uh constantly offer a beautiful breakfast and have people actually learn more about the program we need to head to the room where we are able to display some of the checks that we are getting for companies and I want to see that what is this this is uh hundreds of millions of dollars actually Kevin numerous millions of dollars so these are duplicate copies of the letters that go to customers confirming that the check is on the way I imply you understand if you simply begin to look at a few of these here I imply this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I mean it’s just I imply think about how many actual customers that went through the program yeah this is the very end this is the party 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 client so that’s how you’re able to track it you understand when you
get this you know the check is opted for sure which’s when they pay so they don’t pay anything until they actually receive the cash 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 genuinely rely on Wonder trust that the procedure has been finished and how many you think you’ve processed since you started this we have to do with 35 000 of these for
about six billion dollars wow so clearly they understand what they’re doing which’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 speaking about something really important today the worker retention credit which most of you have actually never become aware of I certainly hadn’t heard of it till really just recently and discovered a lot about it due to the fact that this is probably the lowest expense of capital for any small company 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 founder and CEO of bottom line Concepts 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 just call up your bank supervisor 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’ve become yes the Ambassador and paid representative for this I like this program it’s going away soon you got to discover all about it let’s talk worker retention credit Josh Fox what is an ERC let’s simply begin there so during the Trump Administration when President Trump was enacted they created the cares Act and the cares act provided organizations 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everyone it makes a big difference right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the money cash payroll tax refund all right go on sorry I simply need to make certain we got that point I suggest that’s a huge distinction a loan versus cash money I like money money that’s what we’re discussing alright 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 hard check in the mail where you get actual cash from the internal revenue service all right so let’s talk about how it works because it seems like to me if it’s a if it’s staff member retention credit that individual had to be a staff member so I’m going to make the Assumption this money is not for the owner not for people on the cap table not for investors it’s for staff members right you had to have actually owned a service however it’s based upon you having W-2 staff members 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 qualified 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 right so there were six quarters the program was open well walk us through the six quarters so you had quarters two 3 and four of 2020 and you had quarters one two and 3 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 return per staff member that was on a W-2 in those six quarters so the estimation in 2020 to be exact Kevin is 50 of the staff member’s income to an optimum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers escalated to 70 of the worker’s income to an optimum of seven thousand per quarter how did that occur um they simply altered the rules in.
2021 versus since the mayhem of the pandemic so they wished to even get more to keep those employees on payroll 100 so if you can get 5 000 per person Max in twenty that was 50 in 2020 as much as 5 thousand Max and then what occurs 21 000 Max in 2021 oh that’s how you create twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per staff member that is because that’s a lot of money it is now there’s a caveat here the PPP money would need to be lowered from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would minimize 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 say hypothetically you owned a restaurant in New York City where I’m from and you had a hundred staff members 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 understand about this since appearance when I initially became aware of this when I initially fulfilled Josh you understand I’ve got great deals of financial investments in lots of companies I’m a major advocate for entrepreneurship in America and make lots of many investments in business owners of which many suffered through the pandemic when I first found out about this I called BS I do not believe it since I use the PPP we went through the cash 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 been worthy of and we used them carefully to stay alive throughout the pandemic so when I became aware of this I said nah it can’t be true but when I dug around I even called to my politician buddies Guv Senators they didn’t learn about it I imply that’s how you know that’s how false information is that there’s no details out there then a bunch of people informed me well you can’t get it since you took the PPP likewise not real so let’s ask Josh why does nobody understand about the employee retention credit you understand what’s fascinating you’re talking about the banks Kevin since in the PPP loan process the federal government made it really 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 just procedure process 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 actually done PPP you could not do ERC in the original program and when they altered the law in 2021 the banks were refraining from doing ERC since it’s not alone so you’re getting a tax refund so the government never ever made it clear to anybody about how to.
do this does your CFO understand how to do this not really he or she’s never done it in the past do the banks do it nope the banks do not do it the payroll business yeah a few of them are doing it as a payroll business your accountant no your accounting professional’s never done this prior to unless you have an account that entered into this company and bottom line my company Kevin has been in business because 2009 and we have actually been working with the federal government and the state federal government to recuperate money for Fortune 500 Fortune 1000 business so a great deal of our huge huge business customers have actually worked with bottom line to recover other government programs we’ve done sales tax and use tax unemployment tax work opportunity tax credits research and development tax credits unclaimed property property tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit developed to encourage.
employers to keep staff members on their payroll. The credit is 50% of up to $10,000 in wages paid by an.
employer whose company is fully or partially suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
1. The credit is readily available to all employers despite size including tax exempt companies. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) little.
organizations who take Small Business Loans.
2. To qualify, the employer has to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s company is completely or partly suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross invoices are below 50% of the comparable quarter in 2019. When the.
employer’s gross invoices go above 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 incomes paid up to $10,000 in overall.
It is effective for wages paid after March 13th and before December 31, 2020.
The definition of certifying salaries differs by whether a company had, typically, basically than.
100 workers in 2019.
Companies that specialize in ERC filing support normally supply proficiency and assistance to assist companies browse the complex procedure of claiming the credit. They can provide different services, consisting of:.
How is the employee retention credit calculated? Understanding Employee Retention Credit
Eligibility Assessment: These business will evaluate your company’s eligibility for the ERC based upon aspects such as your market, earnings, and operations. If you satisfy the requirements for the credit and recognize the maximum credit amount you can claim, they can help identify.
Documentation and Computation: ERC filing services will help in collecting the needed documents, such as payroll records and monetary declarations, to support your claim. They will also assist determine the credit amount based on qualified salaries and other qualifying expenses.
Retroactive Claim Review: If you are qualified to claim the ERC for prior quarters, these business can evaluate your previous payroll records and financials to recognize potential chances for retroactive credits. They can help you change previous income tax return to claim these refunds.
Filing Help: Companies specializing in ERC filings will prepare and send the needed forms and documents on your behalf. This includes finishing Kind 941 or any other required tax return.
Compliance and Updates: ERC policies and assistance have actually developed gradually. These companies stay upgraded with the latest modifications and make sure that your filings adhere to the most current standards. If the Internal revenue service demands additional details or carries out an audit associated to your ERC claim, they can also offer ongoing support.
It’s important to research and veterinarian any business using ERC filing assistance to ensure their reliability and competence. Look for recognized firms with experience in tax and payroll services, or consider reaching out to trusted accounting companies or tax professionals who use ERC submitting support.
Remember that while these companies can provide important assistance, it’s constantly an excellent concept to have a basic understanding of the ERC requirements and procedure yourself. This will help you make notified choices and ensure accurate 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 organizations to keep and pay their staff members during the pandemic, even if their operations have actually been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to eligible companies, including for-profit businesses, tax-exempt organizations, and particular governmental entities. To certify, companies must meet one of two criteria:.
The business operations were completely or partly suspended due to a government order related to COVID-19.
Business experienced a considerable decrease in gross invoices. As mentioned previously, for 2021, a considerable decrease is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a substantial decrease is defined 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 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 percentage (up to 70%) of qualified incomes paid to employees, consisting of certain 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 Defense Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 permits organizations to declare the ERC even if they received a PPP loan. Nevertheless, the very same salaries can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and boosted, permitting eligible companies to declare the credit for certified salaries paid as far back as March 13, 2020. This retroactive provision offers an opportunity 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 employment income tax return, usually Type 941. If the credit surpasses the amount of employment taxes owed, the excess can be refunded to the employer.
It is necessary to keep in mind that the ERC arrangements and eligibility criteria have actually evolved with time. The very best course of action is to speak with a tax expert or check out the main IRS website for the most up-to-date and comprehensive details relating to the ERC, including any current legislative changes or updates.
To qualify for the ERC, a company should meet among the following requirements:.
Business operations were fully or partially suspended due to a federal government order related to COVID-19.
The business experienced a substantial decline in gross receipts. For 2021, a substantial decline is defined as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the immediately preceding quarter.
The ERC is offered to organizations of all sizes, including tax-exempt organizations, however there are some exceptions. Government entities and services that got a PPP loan might have constraints on claiming the credit.
The procedure for claiming the ERC involves finishing the required types and consisting of the credit on your employment tax return (normally Type 941). The exact time it takes to process the credit can differ based upon a number of aspects, consisting of the complexity of your business and the work of the internal revenue service. It’s suggested to speak with a tax expert for guidance specific to your situation.
There are numerous business that can assist with the process of declaring the ERC. Some well-known companies that use assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the information supplied here is based on general understanding and may not show the most current updates or changes to the ERC. It is necessary to seek advice from a tax expert or check out the main internal revenue service site for the most up-to-date and precise details relating to eligibility, claiming procedures, and offered support.
Less than 100. The credit is based if the employer had 100 or fewer workers on average in 2019.
on salaries paid to all employees whether they in fact worked or not. In other words, even if the.
staff members worked full time and made money for full-time work, the employer still gets the credit.
Greater than 100. The credit is if the company had more than 100 staff members on average in 2019.
allowed just for earnings paid to workers who did not work during the calendar quarter.
In both cases, “earnings” consists of not just cash payments but likewise a part of the expense of company.
supplied healthcare. Understanding Employee Retention Credit
Employers can be instantly repaid for the credit by lowering the quantity of payroll taxes they.