Lets talk first about Example Of Employee Retention Credit :
Our team here what do these people doing everyone in this room is assisting teach individuals about ERC and uh constantly provide a stunning breakfast and have people actually learn more about the program we should head to the space where we are able to display a few of the checks that we are getting for business and I wish to see that what is this this is uh numerous millions of dollars literally Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to customers validating that the check is on the method I suggest you understand if you simply start to look at some 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 indicate think of how many real customers that went through the program yeah this is the very end this is the celebration at the end when the check is verified the numbers are verified 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
get this you understand the check is chosen sure which’s when they pay so they do not pay anything up until they in fact receive the money they don’t pay bottom line Wonder trust anything up until this letter is verified the check is on the way they deposit it into their checking account and they can really trust Wonder trust that the procedure has actually been completed and how many 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 and that’s what you require you require 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 staff member retention credit which most of you have never ever heard of I definitely hadn’t become aware of it until really just recently and found out a lot about it since this is probably the most affordable expense of capital for any small business anywhere
anytime if you have employees between five and five hundred so I’ve got the expert with me this is Josh Fox he’s the creator and CEO of bottom line Ideas they’re the biggest processor of these ERC credits this is a 170 page program so it’s not easy this isn’t like PPP we just phone your bank supervisor and say 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 have actually ended up being yes the Ambassador and paid representative for this I like this program it’s disappearing very soon you got to find out everything about it let’s talk employee retention credit Josh Fox what is an ERC let’s just start there so during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act provided services 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everyone it makes a big distinction right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the money cash payroll tax refund okay go on sorry I just have to ensure we got that point I imply that’s a big difference a loan versus cash cash I like money 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 original cares Act is the ERC and yes Kevin it is a stunning difficult check in the mail where you get real money from the IRS all right so let’s speak about how it works due to the fact that it seems like to me if it’s a if it’s employee retention credit that individual needed to be a worker so I’m going to make the Assumption this money is not for the owner not for individuals on the cap table not for shareholders it’s for employees right you had to have owned a service but it’s based on you having W-2 workers in America not 10.99. 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 have to be on payroll for the very first 6 months of 2021 on the W-2 correct so there were 6 quarters the program was open well walk us through the six quarters so you had quarters 2 3 and 4 of 2020 and you had quarters one 2 and three 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 6 quarters so the calculation in 2020 to be specific Kevin is 50 of the staff member’s wage to an optimum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s income to an optimum of seven 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 wished 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 as much as five 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 five thousand in twenty twenty that’s twenty six thousand dollars per employee that is since 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 lower the 26 000 so what we’re seeing typically Kevin is if you took PPP cash someplace around ten thousand dollars an individual so let’s state hypothetically you owned a restaurant in New york city 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 internal revenue service so it’s big clearly now the huge question is why does no one learn about this because look when I first heard about this when I initially fulfilled Josh you understand I have actually got great deals of investments in lots of companies I’m a significant supporter for entrepreneurship in America and make numerous numerous investments in business owners of which numerous suffered through the pandemic when I first found out about this I called BS I do not believe it because I use 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 deserved and we used them carefully to survive during the pandemic so when I became aware of this I said nah it can’t hold true however when I dug around I even contacted us to my political leader friends Guv Senators they didn’t know about it I mean that’s how you know that’s how misinformation is that there’s no details out there then a bunch of people told me well you can’t get it since you took the PPP likewise not true so let’s ask Josh why does no one understand about the staff member retention credit you understand what’s interesting you’re discussing the banks Kevin since in the PPP loan procedure the federal government made it very 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 procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s just process procedure that’s all um and here there was turmoil 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 not do 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 made it clear to anyone about how to.
do this does your CFO understand how to do this not really she or he’s never ever done it previously do the banks do it nope the banks don’t do it the payroll companies yeah some of them are doing it as a payroll company your accounting professional no your accounting professional’s never done this prior to unless you have an account that entered into this service and bottom line my firm Kevin has actually been in business considering that 2009 and we’ve been dealing with the federal government and the state government to recover money for Fortune 500 Fortune 1000 business so a lot of our huge big corporate customers have dealt with bottom line to recover other government programs we’ve done sales tax and utilize tax joblessness tax work opportunity tax credits research and development tax credits unclaimed property real estate tax all of these other government programs.
The staff member retention tax credit is a broad based refundable tax credit developed to motivate.
employers to keep workers on their payroll. The credit is 50% of up to $10,000 in incomes paid by an.
employer whose company is completely or partially suspended because of COVID-19 or whose gross invoices.
decrease by more than 50%.
1. The credit is readily available to all employers regardless of size consisting of tax exempt companies. There are.
just two exceptions: (1) state and city governments and their instrumentalities and (2) little.
companies who take Small Business Loans.
2. To certify, the employer has to fulfill one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s company is totally or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross invoices are listed below 50% of the similar quarter in 2019. As soon as the.
company’s gross receipts exceed 80% of a comparable quarter in 2019 they no longer qualify.
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 salaries paid after March 13th and prior to December 31, 2020.
The meaning of certifying salaries varies by whether an employer had, usually, more or less than.
100 workers in 2019.
Companies that focus on ERC filing assistance normally offer knowledge and support to assist organizations navigate the complex procedure of claiming the credit. They can offer numerous services, including:.
How is the employee retention credit calculated? Example Of Employee Retention Credit
Eligibility Evaluation: These business will assess your organization’s eligibility for the ERC based upon elements such as your market, earnings, and operations. If you satisfy the requirements for the credit and identify the optimum credit quantity you can declare, they can assist figure out.
Documents and Estimation: ERC filing services will assist in gathering the required documentation, such as payroll records and monetary declarations, to support your claim. They will also help calculate the credit amount based on eligible incomes and other certifying costs.
Retroactive Claim Review: If you are qualified to declare the ERC for previous quarters, these business can examine your previous payroll records and financials to recognize possible opportunities for retroactive credits. They can assist you modify previous tax returns to declare these refunds.
Filing Assistance: Companies focusing on ERC filings will prepare and send the essential types and documents in your place. This includes finishing Kind 941 or any other necessary tax forms.
Compliance and Updates: ERC guidelines and assistance have developed with time. These companies remain upgraded with the latest modifications and ensure that your filings abide by the most current standards. If the Internal revenue service requests additional information or conducts an audit related to your ERC claim, they can also supply continuous assistance.
It is very important to research and veterinarian any business providing ERC filing assistance to ensure their reliability and know-how. Look for recognized firms with experience in tax and payroll services, or think about connecting to trusted accounting companies or tax professionals who offer ERC filing support.
Remember that while these business can supply valuable help, it’s constantly a great concept to have a basic understanding of the ERC requirements and process yourself. This will assist you make notified decisions and make sure precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief steps. The objective of the ERC is to encourage businesses to keep and pay their workers throughout 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 services, tax-exempt organizations, and specific governmental entities. To certify, employers must fulfill one of two requirements:.
The business operations were fully or partially suspended due to a government order related to COVID-19.
Business experienced a substantial decline in gross invoices. As discussed earlier, for 2021, a significant decrease is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019, or a 20% decline in gross receipts compared to the instantly 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 incomes paid to employees, consisting of certain health plan costs. The optimum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, businesses that got a Paycheck Defense Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 permits organizations to claim the ERC even if they received a PPP loan. The very same incomes can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and enhanced, enabling eligible companies to declare the credit for qualified earnings paid as far back as March 13, 2020. This retroactive provision supplies an opportunity for businesses to amend prior-year tax returns and get refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their employment tax returns, normally Form 941. If the credit exceeds the amount of employment taxes owed, the excess can be reimbursed to the company.
It is essential to note that the ERC arrangements and eligibility requirements have actually evolved gradually. The best course of action is to speak with a tax professional or visit the official IRS website for the most in-depth and current info concerning the ERC, including any current legal changes or updates.
To qualify for the ERC, a business must meet one of the following criteria:.
Business operations were totally or partially suspended due to a federal government order related to COVID-19.
Business experienced a considerable decrease in gross receipts. For 2021, a substantial decrease is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a considerable decrease 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 available to companies of all sizes, including tax-exempt companies, but there are some exceptions. For example, government entities and services that got a PPP loan may have restrictions on declaring the credit.
The process for declaring the ERC includes completing the required kinds and consisting of the credit on your work tax return (typically Kind 941). The exact time it takes to process the credit can vary based on several factors, including the intricacy of your business and the workload of the internal revenue service. It’s advised to speak with a tax expert for guidance specific to your circumstance.
There are several companies that can assist with the procedure of claiming the ERC. Some well-known business that provide assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the details offered here is based on basic knowledge and may not reflect the most current updates or changes to the ERC. It is very important to talk to a tax expert or check out the main internal revenue service site for the most up-to-date and precise details relating to eligibility, declaring procedures, and offered assistance.
Less than 100. The credit is based if the company had 100 or less workers on average in 2019.
on incomes paid to all workers whether they in fact worked or not. Simply put, even if the.
staff members worked full-time and earned money for full time work, the company still gets the credit.
Greater than 100. If the company had more than 100 employees typically in 2019, then the credit is.
allowed just for salaries paid to staff members who did not work during the calendar quarter.
In both cases, “salaries” consists of not just money payments but also a portion of the cost of company.
supplied health care. Example Of Employee Retention Credit
Companies can be right away compensated for the credit by decreasing the quantity of payroll taxes they.