Lets talk first about Employee Retention Credit Qualifying Wages :
Our group here what do these men doing everybody in this space is helping teach people about ERC and uh always offer a beautiful breakfast and have people truly find out about the program we should head to the room where we have the ability to display some of the checks that we are getting for companies and I ‘d like to see that what is this this is uh hundreds of millions of dollars actually Kevin hundreds of millions of dollars so these are duplicate copies of the letters that go to clients confirming that the check is on the way I mean you understand if you just begin to look at a few of these here I suggest this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I mean it’s simply I mean think of how many real 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 customer so that’s how you’re able to track it you know when you
get this you know the check is chosen sure which’s when they pay so they don’t pay anything until they actually get the money they do not pay bottom line Wonder trust anything up until this letter is verified the check is on the method they transfer it into their savings account and they can really trust Wonder trust that the procedure has been ended up and the number of you think you’ve processed because you started this we have to do with 35 000 of these for
about six billion dollars wow so clearly they know what they’re doing which’s what you require you need 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 Terrific here you’re at my YouTube channel we’re talking about something really crucial today the employee retention credit which the majority of you have actually never ever heard of I definitely had not become aware of it until really recently and learned a lot about it due to the fact that this is probably the lowest expense of capital for any small business anywhere
anytime if you have employees 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 largest processor of these ERC credits this is a 170 page program so it’s difficult this isn’t like PPP we simply call 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 have actually ended up being yes the Ambassador and paid representative for this I enjoy this program it’s going away soon you got to find out all about it let’s talk employee retention credit Josh Fox what is an ERC let’s just start there so throughout the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act provided companies 3 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 difference right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the money cash payroll tax refund alright go on sorry I just need to make certain we got that point I indicate that’s a big difference a loan versus money money I like cash cash that’s what we’re speaking about 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 lovely 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 seems like to me if it’s a if it’s employee retention credit that person needed to be a worker so I’m going to make the Presumption this cash is not for the owner not for individuals on the cap table not for shareholders it’s for workers right you needed to have owned a service however it’s based upon you having W-2 workers in America not 10.99. so as long as you had W-2 workers 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 need to be on payroll for the very first 6 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 2 three and 4 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 money how much can you return per employee 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 salary to a maximum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers escalated to 70 of the employee’s income to a maximum of 7 thousand per quarter how did that occur um they simply changed the rules in.
2021 versus due to the fact that the turmoil of the pandemic so they wanted 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 takes place 21 000 Max in 2021 oh that’s how you come up with twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty six thousand dollars per staff member that is since that’s a lot of money it is now there’s a caveat here the PPP money would need to be reduced from the twenty six thousand dollars so if you took PPP loan one and PPP loan two 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 say hypothetically you owned a dining establishment in New york city City where I’m from and you had a hundred staff members and you took PPP cash you would still get a million dollar in the mail from the IRS so it’s big certainly now the huge question is why does nobody know about this since look when I first heard about this when I first fulfilled Josh you understand I have actually got great deals of investments in great deals of companies I’m a significant supporter for entrepreneurship in America and make lots of lots of financial investments in business owners of which numerous suffered through the pandemic when I first became aware of this I called BS I do not believe it since 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 carefully to stay alive during the pandemic so when I became aware of this I said nah it can’t be true however when I dug around I even contacted us to my politician pals 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 because you took the PPP also not true so let’s ask Josh why does nobody understand about the worker retention credit you know what’s intriguing you’re talking about the banks Kevin because in the PPP loan procedure 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 simply 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 might not do both programs so if you had actually 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 due to the fact that 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 he or she’s never done it before do the banks do it nope the banks do not do it the payroll companies yeah a few of them are doing it as a payroll company your accountant no your accountant’s never done this before unless you have an account that went into this service and bottom line my company Kevin has been in business given that 2009 and we have actually been dealing with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 business so a great deal of our big big corporate clients have dealt 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 government programs.
The staff member retention tax credit is a broad based refundable tax credit designed to encourage.
employers to keep staff members on their payroll. The credit is 50% of up to $10,000 in incomes paid by an.
Because of COVID-19 or whose gross receipts, company whose service is totally or partially suspended.
decline by more than 50%.
1. The credit is available to all employers despite size including tax exempt organizations. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
companies who take Small Business Loans.
2. To certify, the company needs to satisfy one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s organization is totally 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. As soon as the.
employer’s gross receipts go above 80% of a comparable quarter in 2019 they no longer qualify.
after completion of that quarter.
Computation of the Credit.
The quantity of the credit is 50% of the certifying salaries paid up to $10,000 in overall.
It works for salaries paid after March 13th and prior to December 31, 2020.
The definition of qualifying earnings varies by whether a company had, on average, basically than.
100 staff members in 2019.
Companies that focus on ERC filing assistance usually supply knowledge and assistance to assist organizations browse the complicated process of declaring the credit. They can use different services, including:.
How is the employee retention credit calculated? Employee Retention Credit Qualifying Wages
Eligibility Evaluation: These business will examine your organization’s eligibility for the ERC based on elements such as your industry, revenue, and operations. They can help figure out if you fulfill the requirements for the credit and recognize the maximum credit amount you can declare.
Documentation and Calculation: ERC filing services will help in collecting the necessary paperwork, such as payroll records and financial statements, to support your claim. They will also help determine the credit amount based on eligible earnings and other certifying expenses.
Retroactive Claim Review: If you are qualified to claim the ERC for prior quarters, these companies can evaluate your previous payroll records and financials to determine possible opportunities for retroactive credits. They can assist you modify previous tax returns to declare these refunds.
Filing Help: Companies focusing on ERC filings will prepare and submit the required types and documents in your place. This includes finishing Type 941 or any other necessary tax forms.
Compliance and Updates: ERC regulations and assistance have progressed with time. These business remain upgraded with the current modifications and make sure that your filings comply with the most current guidelines. They can also offer continuous support if the internal revenue service requests extra information or performs an audit related to your ERC claim.
It is necessary to research study and vet any company using ERC filing assistance to guarantee their reliability and knowledge. Search for established firms with experience in tax and payroll services, or think about reaching out to trusted accounting companies or tax professionals who provide ERC filing support.
Remember that while these companies can supply valuable help, it’s always a good concept to have a fundamental understanding of the ERC requirements and process yourself. This will assist you make informed decisions 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 goal of the ERC is to motivate companies to retain and pay their workers throughout the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to qualified companies, consisting of for-profit services, tax-exempt organizations, and particular governmental entities. To qualify, employers must meet one of two requirements:.
Business operations were totally or partly suspended due to a government order related to COVID-19.
The business experienced a substantial decline in gross invoices. As mentioned earlier, for 2021, a substantial decrease is defined 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% decrease in gross receipts compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the right away 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 (as much as 70%) of qualified wages paid to workers, consisting of particular health plan expenses. The maximum 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, organizations that got a Paycheck Protection Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 enables companies to declare the ERC even if they received a PPP loan. Nevertheless, the same earnings can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and improved, allowing qualified employers to declare the credit for qualified incomes paid as far back as March 13, 2020. This retroactive provision provides an opportunity for businesses to change prior-year income tax return and get refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their work income tax return, typically Type 941. The excess can be refunded to the employer if the credit goes beyond the quantity of employment taxes owed.
It is essential to keep in mind that the ERC arrangements and eligibility requirements have progressed over time. The very best strategy is to talk to a tax expert or visit the main internal revenue service site for the most in-depth and up-to-date details regarding the ERC, including any current legal changes or updates.
To get approved for the ERC, a company must satisfy one of the following requirements:.
The business operations were fully or partly suspended due to a government order related to COVID-19.
Business experienced a substantial decrease in gross invoices. For 2021, a considerable decline is defined as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a substantial decrease is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decline in gross invoices compared to the right away preceding quarter.
The ERC is available to services of all sizes, including tax-exempt companies, however there are some exceptions. Government entities and services that received a PPP loan may have constraints on declaring the credit.
The procedure for claiming the ERC involves completing the essential types and consisting of the credit on your employment income tax return (typically Kind 941). The exact time it takes to process the credit can differ based upon several elements, including the complexity of your business and the work of the internal revenue service. It’s advised to talk to a tax professional for guidance specific to your scenario.
There are a number of companies that can assist with the process of claiming the ERC. These consist of accounting firms, tax advisory services, and payroll company. Some well-known business that provide help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research study and get in touch with these business straight to ask about their charges and services.
Please note that the info supplied here is based upon general knowledge and may not show the most current updates or modifications to the ERC. It is essential to seek advice from a tax professional or visit the official IRS website for the most precise and current information regarding eligibility, claiming procedures, and readily available support.
Less than 100. If the company had 100 or less employees usually in 2019, then the credit is based.
on incomes paid to all employees whether they in fact worked or not. Simply put, even if the.
staff members worked full time and made money for full time work, the employer still gets the credit.
Greater than 100. If the company had more than 100 workers usually in 2019, then the credit is.
enabled only for incomes paid to staff members who did not work throughout the calendar quarter.
In both cases, “wages” includes not just money payments but also a part of the cost of company.
offered health care. Employee Retention Credit Qualifying Wages
Companies can be right away compensated for the credit by lowering the quantity of payroll taxes they.