Lets talk first about What Can The Employee Retention Credit Be Used For :
Our group here what do these people doing everyone in this room is helping teach people about ERC and uh always offer a gorgeous breakfast and have people actually learn about the program we must head to the space where we are able to show some of the checks that we are getting for companies and I wish to see that what is this this is uh hundreds of countless dollars literally Kevin numerous millions of dollars so these are replicate copies of the letters that go to customers confirming 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 mean this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s simply I suggest consider how many actual clients 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 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 know when you
receive this you know the check is opted for sure and that’s when they pay so they don’t 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 transfer it into their bank account and they can truly trust Wonder trust that the process has actually been ended up and the number of you believe you’ve processed considering that you started this we’re about 35 000 of these for
about 6 billion dollars wow so plainly they know what they’re doing and that’s what you require you require specialists 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 Terrific here you’re at my YouTube channel we’re speaking about something really important today the employee retention credit which the majority of you have actually never heard of I definitely had not heard of it till extremely recently and discovered a lot about it since this is probably the lowest expense of capital for any small company anywhere
anytime if you have staff members between five and five hundred so I have actually 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 call up your bank supervisor and state provide 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 become yes the Ambassador and paid spokesperson for this I like this program it’s going away very soon you got to discover everything 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 created the cares Act and the cares act offered companies 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everybody it makes a big difference right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the cash money payroll tax refund okay go on sorry I just need to make certain we got that point I suggest that’s a huge difference a loan versus money 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 tough check in the mail where you get real money from the IRS all right so let’s talk about how it works since it sounds like to me if it’s a if it’s employee retention credit that person needed to be an employee 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 staff members right you had to have owned an organization but it’s based upon you having W-2 workers in America not 10.99. so as long as you had W-2 employees 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 have to be on payroll for the first 6 months of 2021 on the W-2 appropriate so there were six quarters the program was open well walk us through the six quarters so you had quarters two three and four of 2020 and you had quarters one two and 3 of 2021. fine so that’s how it’s measured you need to be on the W-2 throughout that period now let’s talk my preferred part cash just how much can you return per staff member that was on a W-2 in those six quarters so the calculation in 2020 to be exact Kevin is 50 of the employee’s wage to an optimum of five thousand dollars per staff member 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 take place um they simply changed the rules in.
2021 versus because 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 approximately 5 thousand Max and then what happens 21 000 Max in 2021 oh that’s how you come up with twenty 6 thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty 6 thousand dollars per worker that is because that’s a lot of money it is now there’s a caveat here the PPP cash would have to be minimized from the twenty six thousand dollars so if you took PPP loan one and PPP loan two 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 state hypothetically you owned a dining establishment in New York 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 internal revenue service so it’s huge clearly now the big question is why does nobody learn about this since look when I initially became aware of this when I initially satisfied Josh you understand I have actually got lots of investments in lots of business I’m a major supporter for entrepreneurship in America and make numerous lots of investments in business owners of which lots of suffered through the pandemic when I first found out about this I called BS I don’t think it due to the fact that 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 deserved and we utilized them wisely to stay alive during the pandemic so when I became aware of this I stated nah it can’t hold true however when I dug around I even called to my politician good friends 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 individuals told me well you can’t get it due to the fact that you took the PPP also not real so let’s ask Josh why does no one know about the employee retention credit you know what’s interesting you’re discussing the banks Kevin because in the PPP loan process the federal government made it extremely 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 due to the fact that keep in mind in the initial cares act you could refrain from doing both programs so if you had actually done PPP you might not do ERC in the initial program and when they changed 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 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 business yeah a few of them are doing it as a payroll business your accounting professional no your accountant’s never done this before unless you have an account that entered into this service and bottom line my company Kevin has actually been in business considering that 2009 and we have actually been working with the federal government and the state federal government to recover cash for Fortune 500 Fortune 1000 companies so a lot of our huge huge corporate clients have actually dealt with bottom line to recover other federal government programs we’ve done sales tax and use tax joblessness tax work chance tax credits research and development tax credits unclaimed home property tax all of these other federal government programs.
The staff member 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.
Because of COVID-19 or whose gross receipts, employer whose business is fully or partly suspended.
decrease by more than 50%.
1. The credit is readily available to all companies regardless of size consisting of tax exempt companies. There are.
just 2 exceptions: (1) state and city governments and their instrumentalities and (2) little.
businesses who take Small Business Loans.
2. To qualify, the company has to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s company is totally or partly suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the comparable quarter in 2019. When the.
company’s gross receipts exceed 80% of a comparable quarter in 2019 they no longer certify.
after the end 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 wages paid after March 13th and prior to December 31, 2020.
The meaning of qualifying earnings differs by whether a company had, on average, more or less than.
100 workers in 2019.
Business that focus on ERC filing assistance typically provide know-how and assistance to assist businesses navigate the intricate process of claiming the credit. They can provide numerous services, including:.
How is the employee retention credit calculated? What Can The Employee Retention Credit Be Used For
Eligibility Evaluation: These business will evaluate your organization’s eligibility for the ERC based on elements such as your industry, profits, and operations. They can assist identify if you fulfill the requirements for the credit and recognize the maximum credit quantity you can claim.
Documentation and Computation: ERC filing services will help in collecting the needed documentation, such as payroll records and financial declarations, to support your claim. They will also help determine the credit quantity based upon qualified salaries and other certifying expenditures.
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 identify possible opportunities for retroactive credits. They can help you modify previous tax returns to declare these refunds.
Filing Support: Business focusing on ERC filings will prepare and submit the essential types and documents in your place. This consists of completing Type 941 or any other necessary tax forms.
Compliance and Updates: ERC regulations and guidance have actually developed with time. These business stay upgraded with the most recent modifications and guarantee that your filings adhere to the most present guidelines. They can also offer ongoing assistance if the internal revenue service demands extra info or performs an audit related to your ERC claim.
It is necessary to research study and veterinarian any business offering ERC filing assistance to ensure their trustworthiness and knowledge. Look for established firms with experience in tax and payroll services, or think about reaching out to relied on accounting companies or tax experts who provide ERC filing support.
Keep in mind that while these business can provide valuable assistance, it’s always a good idea to have a basic understanding of the ERC requirements and procedure yourself. This will help you make notified choices and guarantee accurate filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit introduced 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 workers throughout the pandemic, even if their operations have actually been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to eligible companies, consisting of for-profit companies, tax-exempt companies, and specific governmental entities. To qualify, companies need to satisfy one of two criteria:.
Business operations were fully or partly suspended due to a government order related to COVID-19.
Business experienced a substantial decline in gross receipts. As pointed out previously, for 2021, a substantial decrease is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decline in gross invoices compared to the instantly preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount is equal to a portion (approximately 70%) of certified incomes paid to employees, consisting of certain health plan 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, businesses that received a Paycheck Defense 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. The very same wages can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and boosted, allowing eligible employers to declare the credit for certified wages paid as far back as March 13, 2020. This retroactive provision supplies a chance for organizations to modify prior-year tax returns and get refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their employment income tax return, usually Kind 941. The excess can be reimbursed to the company if the credit goes beyond the amount of employment taxes owed.
It is essential to note that the ERC provisions and eligibility criteria have actually evolved gradually. The best strategy is to talk to a tax expert or check out the official internal revenue service website for the most up-to-date and comprehensive info concerning the ERC, including any current legal changes or updates.
To receive the ERC, a service should meet one of the following requirements:.
The business operations were totally or partly suspended due to a government order related to COVID-19.
The business experienced a significant decrease in gross receipts. For 2021, a considerable decline is specified as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decline in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the right away preceding quarter.
The ERC is readily available to services of all sizes, consisting of tax-exempt organizations, however there are some exceptions. For example, government entities and companies that got a PPP loan might have constraints on claiming the credit.
The process for claiming the ERC involves completing the required kinds and including the credit on your work income tax return (usually Kind 941). The exact time it requires to process the credit can vary based upon a number of aspects, consisting of the intricacy of your company and the workload of the IRS. It’s advised to talk to a tax professional for guidance specific to your scenario.
There are several business that can aid with the process of claiming the ERC. These include accounting firms, tax advisory services, and payroll provider. Some well-known companies that offer support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research and call these companies straight to inquire about their services and costs.
Please note that the information offered here is based on basic understanding and might not show the most recent updates or changes to the ERC. It is essential to seek advice from a tax expert or visit the official internal revenue service site for the most updated and precise info regarding eligibility, claiming treatments, and readily available help.
Less than 100. The credit is based if the company had 100 or fewer workers on average in 2019.
on salaries paid to all employees whether they actually worked or not. In other words, even if the.
employees worked full time and got paid for full time work, the employer still gets the credit.
Greater than 100. If the company had more than 100 staff members on average in 2019, then the credit is.
allowed just for earnings paid to employees who did not work throughout the calendar quarter.
In both cases, “incomes” includes not just cash payments but also a part of the cost of company.
provided healthcare. What Can The Employee Retention Credit Be Used For
Employers can be immediately compensated for the credit by lowering the quantity of payroll taxes they.