Lets talk first about Care Employee Retention Credit :
Our group here what do these guys doing everyone in this space is assisting teach people about ERC and uh always offer a lovely breakfast and have people actually discover the program we should head to the room where we are able to show some of the checks that we are getting for business and I ‘d like to see that what is this this is uh numerous millions of dollars actually 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 indicate you understand if you just begin 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 suggest think of the number of 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 internal revenue service heading to the consumer so that’s how you’re able to track it you know when you
receive this you understand the check is opted for sure which’s when they pay so they don’t pay anything up until they actually receive the cash 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 checking account and they can truly trust Wonder trust that the procedure has been ended up and the number of you think you have actually processed since 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 need you need experts 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 discussing something really essential today the employee retention credit which the majority of you have actually never heard of I definitely hadn’t become aware of it up until really just recently and learned a lot about it because this is probably the lowest expense 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 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 manager 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 us all about it and how to get it and why I’ve ended up being yes the Ambassador and paid representative for this I enjoy this program it’s disappearing soon you got to find out 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 used businesses three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone it makes a big distinction right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
remedy the cash cash payroll tax refund fine go on sorry I just need to make sure we got that point I suggest that’s a huge distinction a loan versus cash money I like money cash that’s what we’re talking about fine 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 stunning hard check in the mail where you get actual cash from the internal revenue service all right so let’s discuss how it works since it sounds like to me if it’s a if it’s staff member retention credit that individual needed to be an employee so I’m going to make the Presumption this cash is not for the owner not for people on the cap table not for shareholders it’s for staff members right you had to have owned a company however it’s based upon you having W-2 staff members 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 very 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 3 and four of 2020 and you had quarters one 2 and three of 2021. alright so that’s how it’s measured you need to be on the W-2 during that duration now let’s talk my favorite part cash how much can you get back per worker that was on a W-2 in those six quarters so the estimation in 2020 to be exact Kevin is 50 of the staff member’s salary to an optimum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s salary to a maximum of 7 thousand per quarter how did that take place um they simply altered the rules in.
2021 versus because the turmoil 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 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 5 thousand in twenty twenty that’s twenty 6 thousand dollars per worker that is since that’s a great deal of cash it is now there’s a caveat here the PPP money would have to be decreased 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 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 staff members and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s substantial clearly now the big question is why does nobody know about this because look when I first heard about this when I first met Josh you know I have actually got lots of financial investments in great deals of business I’m a significant supporter for entrepreneurship in America and make many numerous investments in entrepreneurs of which numerous suffered through the pandemic when I first became aware of this I called BS I do not believe it due to the fact that I use the PPP we went through the cash 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 carefully to survive throughout the pandemic so when I found out about this I said nah it can’t be true however when I dug around I even called to my politician pals Guv Senators they didn’t know about it I mean 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 due to the fact that you took the PPP also not true so let’s ask Josh why does no one understand about the staff member retention credit you know what’s intriguing you’re speaking about the banks Kevin since in the PPP loan procedure the federal government made it extremely clear that if you desired a PPP loan you would call Wells Fargo Citibank Bank of America any of the big 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 process procedure that’s all um and here there was turmoil because remember in the initial cares act you could not do both programs so if you had actually done PPP you might 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 government never made it clear to anyone about how to.
do this does your CFO know how to do this not actually she or he’s never done it previously do the banks do it nope the banks don’t do it the payroll companies 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 entered into this company and bottom line my company Kevin has actually been in business since 2009 and we have actually been dealing with the federal government and the state government to recuperate money for Fortune 500 Fortune 1000 business so a great deal of our huge big business clients have actually dealt with bottom line to recover other federal government programs we’ve done sales tax and use tax joblessness tax work opportunity tax credits research and development tax credits unclaimed property real estate tax all of these other federal government programs.
The worker retention tax credit is a broad based refundable tax credit created to encourage.
employers to keep staff members on their payroll. The credit is 50% of up to $10,000 in incomes paid by an.
company whose organization is fully or partially suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
Schedule.
1. The credit is offered to all employers no matter size consisting of tax exempt companies. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) small.
companies who take Small Business Loans.
2. To qualify, the employer has to satisfy one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s business is fully or partially suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross receipts are below 50% of the equivalent quarter in 2019. Once the.
employer’s gross receipts go above 80% of an equivalent quarter in 2019 they no longer qualify.
after completion of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the certifying wages paid up to $10,000 in overall.
It works for incomes paid after March 13th and prior to December 31, 2020.
The definition of certifying salaries varies by whether an employer had, usually, basically than.
100 staff members in 2019.
Companies that focus on ERC filing support normally offer know-how and assistance to help services navigate the complicated process of claiming the credit. They can provide numerous services, including:.
How is the employee retention credit calculated? Care Employee Retention Credit
Eligibility Assessment: These companies will assess your organization’s eligibility for the ERC based upon factors such as your market, income, and operations. They can assist determine if you satisfy the requirements for the credit and identify the optimum credit quantity you can claim.
Documentation and Estimation: ERC filing services will assist in gathering the needed paperwork, such as payroll records and monetary declarations, to support your claim. They will also help calculate the credit quantity based on qualified incomes and other qualifying expenditures.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for previous quarters, these business can examine your past payroll records and financials to determine potential chances for retroactive credits. They can assist you amend previous income tax return to claim these refunds.
Filing Assistance: Companies specializing in ERC filings will prepare and submit the necessary types and paperwork in your place. This consists of completing Type 941 or any other required tax return.
Compliance and Updates: ERC regulations and guidance have developed over time. These business stay updated with the most recent changes and make sure that your filings comply with the most current guidelines. If the Internal revenue service requests additional info or performs an audit related to your ERC claim, they can likewise provide continuous support.
It’s important to research and vet any company offering ERC filing support to guarantee their reliability and know-how. Search for recognized companies with experience in tax and payroll services, or think about connecting to trusted accounting firms or tax specialists who offer ERC submitting support.
Remember that while these companies can supply valuable support, it’s always a great concept to have a basic understanding of the ERC requirements and procedure yourself. This will assist you make informed choices and guarantee precise filings.
The Staff Member 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 encourage companies to maintain and pay their employees 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 employers, including for-profit businesses, tax-exempt organizations, and certain governmental entities. To qualify, companies need to fulfill one of two requirements:.
Business operations were totally or partly suspended due to a government order related to COVID-19.
Business experienced a considerable decline in gross invoices. As discussed previously, for 2021, a considerable decline is defined as a 20% decline in gross receipts 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 very same quarter in 2019, or a 20% decrease in gross receipts compared to the right away 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 wages paid to workers, consisting of particular health plan expenses. The optimum credit per worker 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 Security Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 allows organizations to declare the ERC even if they received a PPP loan. The very same salaries can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and improved, permitting qualified employers to claim the credit for certified salaries paid as far back as March 13, 2020. This retroactive arrangement supplies an opportunity for companies to change prior-year income tax return and get refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their employment tax returns, normally Form 941. The excess can be reimbursed to the employer if the credit surpasses the amount of work taxes owed.
It’s important to note that the ERC arrangements and eligibility requirements have actually progressed in time. The best strategy is to speak with a tax expert or visit the main internal revenue service website for the most current and detailed info concerning the ERC, consisting of any recent legislative changes or updates.
To get approved for the ERC, an organization needs to satisfy among the following requirements:.
Business operations were fully or partly suspended due to a government order related to COVID-19.
Business experienced a significant decrease in gross invoices. For 2021, a considerable decline is specified as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a substantial decline is defined as a 20% decrease in gross receipts 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 companies of all sizes, including tax-exempt companies, however there are some exceptions. Federal government entities and companies that received a PPP loan might have limitations on declaring the credit.
The procedure for claiming the ERC includes completing the needed kinds and including the credit on your employment tax return (normally Kind 941). The exact time it requires to process the credit can vary based upon numerous elements, including the intricacy of your service and the workload of the IRS. It’s suggested to consult with a tax expert for assistance particular to your situation.
There are a number of companies that can help with the process of claiming the ERC. Some popular companies that provide support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the info offered here is based upon basic knowledge and may not reflect the most recent updates or modifications to the ERC. It is essential to consult with a tax professional or visit the main internal revenue service site for the most current and precise info relating to eligibility, claiming procedures, and readily available help.
Less than 100. If the company had 100 or less staff members usually in 2019, then the credit is based.
on incomes paid to all staff members whether they in fact worked or not. To put it simply, even if the.
staff members worked full time and made money for full-time work, the company still gets the credit.
Greater than 100. If the company had more than 100 workers typically in 2019, then the credit is.
allowed just for earnings paid to employees who did not work throughout the calendar quarter.
In both cases, “wages” consists of not just cash payments but likewise a part of the cost of employer.
provided health care. Care Employee Retention Credit
Payment.
Companies can be immediately repaid for the credit by minimizing the amount of payroll taxes they.