Lets talk first about What Is Employee Retention Credit :
Our group here what do these men doing everyone in this space is helping teach individuals about ERC and uh constantly offer a stunning breakfast and have individuals really discover the program we should head to the space where we are able to show a few of the checks that we are getting for business and I want to see that what is this this is uh numerous millions of dollars literally Kevin hundreds of countless dollars so these are duplicate copies of the letters that go to customers verifying that the check is on the method I suggest you understand if you just start 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 suggest it’s just I mean think of how many real clients that went through the program yeah this is the very end this is the celebration at the end when the check is confirmed the numbers are confirmed and the check is on the mail in the mail from the internal revenue service 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 actually receive the cash they do not pay bottom line Wonder trust anything till this letter is verified the check is on the way they deposit it into their savings account and they can really rely on Wonder trust that the procedure has been completed and how many you think you have actually processed since 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 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 Terrific here you’re at my YouTube channel we’re talking about something truly crucial today the worker retention credit which the majority of you have actually never heard of I definitely hadn’t become aware of it until extremely recently and learned a lot about it due to the fact that this is probably the most affordable cost of capital for any small business anywhere
anytime if you have employees in between 5 and five hundred so I’ve 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 challenging this isn’t like PPP we simply phone your bank supervisor and say 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 ended up being yes the Ambassador and paid spokesperson for this I enjoy this program it’s disappearing 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 during the Trump Administration when President Trump was enacted they created the cares Act and the cares act provided 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 huge difference right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
remedy the money cash payroll tax refund fine go on sorry I simply need to make sure we got that point I imply that’s a big difference a loan versus cash money I like cash money that’s what we’re speaking about all right 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 hard check in the mail where you get actual cash from the IRS all right so let’s talk about how it works because it seems like to me if it’s a if it’s worker retention credit that person had to be a worker so I’m going to make the Assumption this cash is not for the owner not for people on the cap table not for investors it’s for workers right you had to have actually owned an organization but it’s based upon 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 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 right so there were 6 quarters the program was open well stroll us through the 6 quarters so you had quarters two 3 and four of 2020 and you had quarters one 2 and 3 of 2021. alright so that’s how it’s determined you need to be on the W-2 during that period now let’s talk my favorite part money just how much can you get back per staff member that was on a W-2 in those 6 quarters so the calculation in 2020 to be exact Kevin is 50 of the employee’s salary to an optimum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the employee’s wage to an optimum of seven thousand per quarter how did that take place um they just altered the rules in.
2021 versus since the mayhem 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 approximately five thousand Max and then what takes place 21 000 Max in 2021 oh that’s how you create twenty 6 thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per employee that is because that’s a great deal of money it is now there’s a caveat here the PPP cash would have 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 on average Kevin is if you took PPP money someplace around 10 thousand dollars a person so let’s state hypothetically you owned a restaurant 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 IRS so it’s substantial certainly now the huge question is why does no one understand about this since look when I first heard about this when I initially satisfied Josh you know I have actually got great deals of investments in lots of business I’m a major supporter for entrepreneurship in America and make lots of lots of investments in entrepreneurs of which lots of suffered through the pandemic when I first heard about this I called BS I do not think it because I use the PPP we went through the money 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 should have and we utilized them wisely to stay alive throughout the pandemic so when I heard about this I said nah it can’t hold true however when I dug around I even contacted us to my political leader pals Guv Senators they didn’t understand about it I suggest that’s how you understand that’s how misinformation is that there’s no details out there then a lot of people informed me well you can’t get it since you took the PPP likewise not true so let’s ask Josh why does no one know about the staff member retention credit you understand what’s intriguing you’re speaking about the banks Kevin because in the PPP loan procedure 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 nation and they would process procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s just procedure procedure that’s all um and here there was chaos due to the fact that remember in the initial cares act you might refrain from doing both programs so if you had done PPP you might 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 ever made it clear to any person about how to.
do this does your CFO understand how to do this not truly she or he’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 business your accountant no your accountant’s never ever done this before unless you have an account that entered into this company and bottom line my company Kevin has actually been in business because 2009 and we’ve been working with the federal government and the state government to recuperate money for Fortune 500 Fortune 1000 business so a great deal of our big big corporate customers have worked with bottom line to recuperate other federal government programs we’ve done sales tax and use tax unemployment tax work chance tax credits research and development tax credits unclaimed home real estate tax all of these other federal government programs.
The worker retention tax credit is a broad based refundable tax credit designed to motivate.
companies to keep employees on their payroll. The credit is 50% of as much as $10,000 in earnings paid by an.
Due to the fact that of COVID-19 or whose gross invoices, employer whose organization is completely or partly suspended.
decrease by more than 50%.
1. The credit is readily available to all employers regardless of size consisting of tax exempt companies. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) little.
businesses who take Small Business Loans.
2. To certify, the company has to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s organization is completely or partly suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross receipts are below 50% of the similar quarter in 2019. When the.
company’s gross receipts exceed 80% of a comparable quarter in 2019 they no longer certify.
after completion of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the qualifying salaries paid up to $10,000 in overall.
It is effective for salaries paid after March 13th and prior to December 31, 2020.
The definition of certifying incomes differs by whether a company had, typically, more or less than.
100 employees in 2019.
Companies that specialize in ERC filing assistance typically supply knowledge and support to help organizations browse the intricate procedure of declaring the credit. They can provide numerous services, consisting of:.
How is the employee retention credit calculated? What Is Employee Retention Credit
Eligibility Evaluation: These companies will evaluate your business’s eligibility for the ERC based on elements such as your market, revenue, and operations. They can assist identify if you satisfy the requirements for the credit and identify the optimum credit quantity you can claim.
Documentation and Computation: ERC filing services will help in collecting the essential paperwork, such as payroll records and financial statements, to support your claim. They will likewise assist compute the credit amount based on qualified incomes and other certifying expenditures.
Retroactive Claim Review: If you are eligible to declare the ERC for previous quarters, these companies can examine your previous payroll records and financials to identify possible chances for retroactive credits. They can assist you amend previous income tax return to declare these refunds.
Filing Assistance: Business specializing in ERC filings will prepare and submit the necessary forms and paperwork on your behalf. This includes completing Type 941 or any other necessary tax forms.
Compliance and Updates: ERC guidelines and guidance have developed gradually. These companies remain updated with the current modifications and make sure that your filings comply with the most current standards. If the IRS requests extra info or carries out an audit associated to your ERC claim, they can likewise offer ongoing assistance.
It is essential to research and vet any company offering ERC filing assistance to ensure their credibility and competence. Search for established companies with experience in tax and payroll services, or think about reaching out to trusted accounting firms or tax experts who offer ERC filing support.
Keep in mind that while these companies can supply valuable support, it’s constantly a good concept to have a basic understanding of the ERC requirements and procedure yourself. This will help you make informed choices and guarantee accurate filings.
The Worker Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief procedures. The objective of the ERC is to motivate businesses to retain and pay their workers during the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to qualified employers, consisting of for-profit services, tax-exempt organizations, and certain governmental entities. To qualify, employers should fulfill one of two criteria:.
Business operations were completely or partly suspended due to a federal government order related to COVID-19.
Business experienced a considerable decrease in gross receipts. As pointed out previously, for 2021, a substantial decrease is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decrease 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 Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit quantity is equal to a percentage (approximately 70%) of qualified earnings paid to staff members, including certain health plan 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: At first, organizations that got an Income Protection Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 allows services to claim the ERC even if they got a PPP loan. The exact same wages can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively broadened and enhanced, enabling qualified employers to claim the credit for certified incomes paid as far back as March 13, 2020. This retroactive arrangement supplies an opportunity for organizations to amend prior-year income tax return and receive refunds.
Declaring the Credit: Employers can declare the ERC by reporting it on their employment income tax return, typically Type 941. If the credit surpasses the amount of employment taxes owed, the excess can be refunded to the company.
It’s important to note that the ERC provisions and eligibility requirements have developed with time. The best strategy is to consult with a tax professional or visit the main IRS website for the most current and detailed info concerning the ERC, consisting of any recent legal changes or updates.
To qualify for the ERC, a service needs to meet among the following requirements:.
The business operations were completely or partially suspended due to a government order related to COVID-19.
Business experienced a significant decrease in gross receipts. For 2021, a considerable decline is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decline in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross receipts compared to the right away preceding quarter.
The ERC is offered to organizations of all sizes, including tax-exempt companies, however there are some exceptions. Government entities and companies that got a PPP loan may have restrictions on claiming the credit.
The procedure for declaring the ERC involves finishing the necessary kinds and consisting of the credit on your work tax return (generally Type 941). The exact time it requires to process the credit can vary based upon several elements, including the complexity of your organization and the work of the internal revenue service. It’s suggested to seek advice from a tax expert for assistance specific to your scenario.
There are several companies that can help with the process of claiming the ERC. These include accounting companies, tax advisory services, and payroll company. Some popular companies that provide support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research study and get in touch with these companies directly to inquire about their services and charges.
Please note that the info provided here is based on general knowledge and might not reflect the most recent updates or changes to the ERC. It is necessary to talk to a tax expert or go to the official internal revenue service site for the most precise and current details concerning eligibility, claiming treatments, and available assistance.
Less than 100. The credit is based if the company had 100 or less staff members on average in 2019.
on incomes paid to all staff members whether they actually worked or not. To put it simply, even if the.
employees worked full time and made money for full-time work, the employer still gets the credit.
Greater than 100. If the employer had more than 100 workers on average in 2019, then the credit is.
permitted only for wages paid to workers who did not work throughout the calendar quarter.
In both cases, “salaries” consists of not simply money payments but also a portion of the cost of company.
provided healthcare. What Is Employee Retention Credit
Employers can be right away compensated for the credit by decreasing the amount of payroll taxes they.