Lets talk first about Worksheet 2. Adjusted Employee Retention Credit For Qualified :
Our team here what do these guys doing everybody in this space is helping teach people about ERC and uh constantly offer a beautiful breakfast and have individuals actually find out about the program we ought to head to the room where we are able to show some of the checks that we are getting for companies and I want to see that what is this this is uh numerous countless dollars literally Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to clients confirming that the check is on the way I indicate you understand if you just begin to look at a few of these here I indicate this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s just I imply consider 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 confirmed the numbers are validated and the check is on the mail in the mail from the IRS heading to the customer so that’s how you’re able to track it you understand when you
receive this you know the check is gone for sure and that’s when they pay so they don’t pay anything until they really get the money they don’t pay bottom line Wonder trust anything till this letter is verified the check is on the way they transfer it into their savings account and they can genuinely trust Wonder trust that the process has been completed and how many you think you’ve processed given that you began this we have to do with 35 000 of these for
about six billion dollars wow so plainly they know what they’re doing which’s what you require you need 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 Wonderful here you’re at my YouTube channel we’re speaking about something really important today the staff member retention credit which most of you have actually never heard of I certainly hadn’t become aware of it till very recently and learned a lot about it because this is most likely the most affordable expense of capital for any small company anywhere
anytime if you have employees in between 5 and five hundred so I have actually got the specialist with me this is Josh Fox he’s the creator and CEO of bottom line Principles they’re the biggest processor of these ERC credits this is a 170 page program so it’s hard this isn’t like PPP we simply contact your bank supervisor and state provide me a loan it doesn’t 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 representative for this I like this program it’s going away very soon you got to learn all about it let’s talk employee 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 companies three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everybody it makes a huge difference right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
remedy the cash money payroll tax refund okay go on sorry I just need to make certain we got that point I indicate that’s a huge distinction a loan versus cash cash I like money money that’s what we’re discussing 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 tough check in the mail where you get real money from the IRS all right so let’s speak about how it works since it sounds like to me if it’s a if it’s staff member retention credit that person had to be an employee so I’m going to make the Assumption 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 actually owned a company however it’s based upon 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 have to be on payroll for the first six months of 2021 on the W-2 correct so there were six quarters the program was open well stroll us through the six quarters so you had quarters two three and 4 of 2020 and you had quarters one 2 and 3 of 2021. alright so that’s how it’s measured you have to be on the W-2 throughout that period now let’s talk my favorite part cash just how much can you get back per worker that was on a W-2 in those six quarters so the calculation in 2020 to be specific Kevin is 50 of the employee’s income to an optimum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers increased to 70 of the staff member’s wage to an optimum of 7 thousand per quarter how did that take place um they simply changed the rules in.
2021 versus since the chaos of the pandemic so they wanted 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 as much as 5 thousand Max and after that 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 since that’s a great deal of money it is now there’s a caution here the PPP money would have to be lowered from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would lower the 26 000 so what we’re seeing typically Kevin is if you took PPP cash somewhere 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 workers and you took PPP cash you would still get a million dollar in the mail from the IRS so it’s huge certainly now the big concern is why does nobody learn about this because appearance when I initially found out about this when I first fulfilled Josh you understand I have actually got great deals of financial investments in great deals of companies I’m a major advocate for entrepreneurship in America and make many many investments in entrepreneurs of which many suffered through the pandemic when I first heard about this I called BS I don’t think it due to the fact that I utilize 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 which were well been worthy of and we utilized them wisely to survive 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 contacted us to my politician pals Governor Senators they didn’t learn about it I suggest that’s how you understand 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 since you took the PPP also not true so let’s ask Josh why does no one learn about the worker retention credit you know what’s fascinating you’re speaking about the banks Kevin since in the PPP loan procedure 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 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 mayhem since remember in the original 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 refraining from doing ERC since it’s not alone so you’re getting a tax refund so the federal government never ever made it clear to anybody about how to.
do this does your CFO understand how to do this not actually 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 business yeah a few of them are doing it as a payroll company your accountant no your accounting professional’s never done this before unless you have an account that went into this company and bottom line my company Kevin has actually stayed in business since 2009 and we have actually been dealing with the federal government and the state federal government to recuperate money for Fortune 500 Fortune 1000 companies so a lot of our big huge business clients have worked with bottom line to recover other federal government programs we have actually 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 government programs.
The staff member retention tax credit is a broad based refundable tax credit developed to motivate.
companies 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 completely or partly suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
Schedule.
1. The credit is offered to all employers regardless of size consisting of tax exempt organizations. There are.
just two exceptions: (1) state and city governments and their instrumentalities and (2) little.
services who take Small company Loans.
2. To qualify, the employer has to fulfill one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s company is totally or partially suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross receipts are listed below 50% of the similar quarter in 2019. When the.
company’s gross receipts go above 80% of a similar quarter in 2019 they no longer certify.
after the end of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the qualifying earnings paid up to $10,000 in overall.
It works for wages paid after March 13th and prior to December 31, 2020.
The definition of qualifying earnings varies by whether an employer had, on average, basically than.
100 staff members in 2019.
Business that focus on ERC filing support generally supply competence and support to assist companies navigate the intricate process of claiming the credit. They can use numerous services, consisting of:.
How is the employee retention credit calculated? Worksheet 2. Adjusted Employee Retention Credit For Qualified
Eligibility Assessment: These business will examine your business’s eligibility for the ERC based on elements such as your industry, earnings, and operations. They can assist figure out if you meet the requirements for the credit and identify the optimum credit quantity you can claim.
Documents and Calculation: ERC filing services will assist in gathering the needed documentation, such as payroll records and monetary statements, to support your claim. They will also help determine the credit amount based upon qualified earnings and other qualifying expenses.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for prior quarters, these companies can examine your past payroll records and financials to identify possible chances for retroactive credits. They can help you change previous income tax return to declare these refunds.
Filing Support: Business focusing on ERC filings will prepare and send the essential kinds and documents on your behalf. This includes completing Type 941 or any other necessary tax forms.
Compliance and Updates: ERC policies and assistance have progressed in time. These companies remain updated with the most recent modifications and guarantee that your filings abide by the most existing standards. They can likewise supply continuous assistance if the IRS demands extra details or conducts an audit related to your ERC claim.
It is very important to research and veterinarian any company using ERC filing assistance to guarantee their credibility and knowledge. Look for established firms with experience in tax and payroll services, or think about reaching out to trusted accounting firms or tax professionals who provide ERC submitting support.
Remember that while these business can provide valuable support, it’s always an excellent idea to have a standard understanding of the ERC requirements and procedure yourself. This will assist you make notified choices and make sure accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief steps. The objective of the ERC is to encourage organizations to maintain and pay their staff members throughout the pandemic, even if their operations have actually been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to qualified companies, consisting of for-profit organizations, tax-exempt organizations, and certain governmental entities. To certify, employers must satisfy one of two criteria:.
The business operations were completely or partially suspended due to a federal government order related to COVID-19.
The business experienced a significant decrease in gross receipts. As discussed earlier, for 2021, a significant decrease is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a substantial 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 percentage (up to 70%) of certified earnings paid to staff members, including particular health insurance expenses. The maximum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, services that received a Paycheck Defense Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 enables companies to declare the ERC even if they got a PPP loan. Nevertheless, the exact same incomes can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively broadened and boosted, allowing eligible companies to declare the credit for qualified wages 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: Employers can claim the ERC by reporting it on their work income tax return, generally Type 941. If the credit exceeds the amount of employment taxes owed, the excess can be refunded to the company.
It’s important to note that the ERC arrangements and eligibility criteria have progressed with time. The best course of action is to talk to a tax professional or check out the main internal revenue service website for the most in-depth and up-to-date details regarding the ERC, consisting of any recent legal changes or updates.
To receive the ERC, an organization needs to meet one of the following criteria:.
Business operations were fully or partly suspended due to a government order related to COVID-19.
Business experienced a substantial decline in gross invoices. For 2021, a considerable decrease is defined as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019, or a 20% decrease in gross invoices 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. For example, government entities and organizations that received a PPP loan may have restrictions on claiming the credit.
The procedure for claiming the ERC involves finishing the necessary forms and consisting of the credit on your work income tax return (typically Kind 941). The exact time it requires to process the credit can vary based on several elements, including the complexity of your company and the work of the IRS. It’s recommended to talk to a tax expert for assistance specific to your scenario.
There are several business that can help with the process of claiming the ERC. Some widely known business that provide assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the details provided here is based upon general understanding and may not show the most current updates or modifications to the ERC. It’s important to speak with a tax expert or go to the official internal revenue service site for the most current and accurate information relating to eligibility, claiming procedures, and readily available help.
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 actually worked or not. Simply put, even if the.
staff members worked full time and got paid for full-time work, the company still gets the credit.
Greater than 100. If the employer had more than 100 employees on average in 2019, then the credit is.
allowed only for earnings paid to staff members who did not work throughout the calendar quarter.
In both cases, “salaries” consists of not simply money payments but likewise a portion of the cost of company.
provided health care. Worksheet 2. Adjusted Employee Retention Credit For Qualified
Payment.
Employers can be immediately repaid for the credit by decreasing the amount of payroll taxes they.