Lets talk first about Cares Act Employee Retention Credit Calculation :
Our group here what do these guys doing everybody in this space is assisting teach individuals about ERC and uh constantly supply a stunning breakfast and have individuals truly learn more about the program we need to head to the space where we have the ability to display some of the checks that we are getting for companies and I wish to see that what is this this is uh hundreds of countless dollars literally Kevin numerous countless dollars so these are replicate copies of the letters that go to clients validating that the check is on the way I mean you understand if you just start to look at some of these here I mean this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I mean it’s just I suggest think about the number of actual 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 verified 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 know when you
receive this you understand the check is gone for sure which’s when they pay so they don’t pay anything until they really get the money they do not pay bottom line Wonder trust anything till this letter is confirmed the check is on the way they deposit it into their bank account and they can truly rely on Wonder trust that the procedure has been finished and the number of you believe you’ve processed because you started this we have to do with 35 000 of these for
about 6 billion dollars wow so clearly they understand 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 Wonderful here you’re at my YouTube channel we’re talking about something actually important today the employee retention credit which the majority of you have actually never heard of I definitely hadn’t become aware of it till very just recently and discovered a lot about it due to the fact that this is probably the most affordable expense of capital for any small business anywhere
anytime if you have staff members in between 5 and five hundred so I’ve got the specialist with me this is Josh Fox he’s the founder and CEO of bottom line Concepts 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 contact 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 inform all of us about it and how to get it and why I have actually become yes the Ambassador and paid spokesperson for this I love this program it’s disappearing 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 during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act used organizations three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everybody it makes a big distinction right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
fix the cash money payroll tax refund fine go on sorry I just need to make certain we got that point I imply that’s a huge distinction a loan versus cash money 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 initial cares Act is the ERC and yes Kevin it is a stunning hard check in the mail where you get actual money from the IRS all right so let’s discuss how it works because 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 cash is not for the owner not for individuals on the cap table not for investors it’s for employees right you needed to have actually owned a business but it’s based on 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 qualified so you have to be on payroll in 2020 on the W-2 and you have to be on payroll for the first 6 months of 2021 on the W-2 proper so there were six quarters the program was open well stroll us through the six quarters so you had quarters two three and four of 2020 and you had quarters one 2 and 3 of 2021. all right 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 cash just how much can you get back per worker that was on a W-2 in those six quarters so the computation in 2020 to be precise Kevin is 50 of the staff member’s income to an optimum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s income to a maximum of 7 thousand per quarter how did that occur um they simply altered the rules in.
2021 versus since the mayhem of the pandemic so they wished to even get more to keep those employees 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 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 caution here the PPP money would need to be decreased from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would decrease the 26 000 so what we’re seeing typically Kevin is if you took PPP cash someplace around ten thousand dollars a person 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 money 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 nobody learn about this since appearance when I initially became aware of this when I initially met Josh you understand I have actually got lots of financial investments in great deals of business I’m a major supporter for entrepreneurship in America and make many many financial investments in business owners of which lots of suffered through the pandemic when I first became aware of this I called BS I don’t believe it since 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 used them carefully to stay alive during the pandemic so when I found out about this I stated nah it can’t be true however when I dug around I even called to my politician good friends Guv Senators they didn’t learn about it I mean that’s how you understand that’s how misinformation is that there’s no info out there then a bunch of individuals informed me well you can’t get it due to the fact that you took the PPP also not real so let’s ask Josh why does no one understand about the worker retention credit you understand what’s interesting you’re discussing the banks Kevin due to the fact that in the PPP loan process 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 big 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 procedure procedure that’s all um and here there was mayhem since remember in the initial cares act you might not do both programs so if you had done PPP you could not do ERC in the original program and when they altered the law in 2021 the banks were not doing ERC since it’s not alone so you’re getting a tax refund so the government never ever made it clear to any person about how to.
do this does your CFO know how to do this not truly he or she’s never done it in the past do the banks do it nope the banks do not do it the payroll business yeah some of them are doing it as a payroll company 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 firm Kevin has been in business since 2009 and we have actually been working with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 business so a lot of our huge huge business clients have actually dealt with bottom line to recover other government programs we have actually done sales tax and utilize tax joblessness tax work opportunity tax credits research and development tax credits unclaimed home real estate tax all of these other federal government programs.
The staff member retention tax credit is a broad based refundable tax credit created to motivate.
companies to keep staff members on their payroll. The credit is 50% of approximately $10,000 in wages paid by an.
company whose organization is completely or partially suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is available to all employers despite size including tax exempt organizations. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
organizations who take Small Business Loans.
2. To qualify, the company has to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s company is completely or partially suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross receipts are listed below 50% of the comparable quarter in 2019. When the.
employer’s gross receipts go above 80% of a similar quarter in 2019 they no longer qualify.
after completion of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the qualifying earnings paid up to $10,000 in overall.
It is effective for salaries paid after March 13th and prior to December 31, 2020.
The meaning of qualifying incomes differs by whether an employer had, usually, more or less than.
100 staff members in 2019.
Business that concentrate on ERC filing support normally offer knowledge and assistance to assist organizations navigate the intricate procedure of claiming the credit. They can use numerous services, including:.
How is the employee retention credit calculated? Cares Act Employee Retention Credit Calculation
Eligibility Evaluation: These companies will assess your company’s eligibility for the ERC based on elements such as your market, earnings, and operations. If you meet the requirements for the credit and determine the optimum credit amount you can declare, they can help identify.
Documents and Computation: ERC filing services will assist in gathering the essential documentation, such as payroll records and financial statements, to support your claim. They will likewise help determine the credit quantity based upon eligible salaries and other qualifying costs.
Retroactive Claim Review: If you are eligible to claim the ERC for previous quarters, these companies can examine your past payroll records and financials to recognize possible chances for retroactive credits. They can help you modify previous income tax return to claim these refunds.
Filing Assistance: Companies focusing on ERC filings will prepare and submit the necessary forms and documentation on your behalf. This consists of completing Type 941 or any other necessary tax forms.
Compliance and Updates: ERC policies and guidance have progressed over time. These companies stay updated with the current changes and make sure that your filings abide by the most current standards. If the Internal revenue service requests additional info or conducts an audit associated to your ERC claim, they can also supply continuous support.
It is necessary to research and vet any business offering ERC filing assistance to ensure their reliability and proficiency. Look for recognized companies with experience in tax and payroll services, or consider connecting to trusted accounting firms or tax experts who provide ERC filing support.
Remember that while these business can offer important assistance, it’s always a good idea 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 Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief procedures. The objective of the ERC is to motivate organizations to maintain and pay their workers during the pandemic, even if their operations have been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to eligible employers, consisting of for-profit services, tax-exempt companies, and certain governmental entities. To qualify, employers need to satisfy one of two criteria:.
The business operations were totally or partially suspended due to a government order related to COVID-19.
The business experienced a substantial decrease in gross invoices. As mentioned earlier, 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 considerable decline is defined as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit amount is equal to a portion (up to 70%) of certified earnings paid to employees, including specific health plan costs. The maximum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, companies that got an Income Defense Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 permits organizations to declare the ERC even if they got a PPP loan. Nevertheless, the exact same incomes can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and enhanced, permitting qualified employers to claim the credit for certified earnings paid as far back as March 13, 2020. This retroactive provision provides a chance for companies to change prior-year income tax return and get refunds.
Declaring the Credit: Employers can declare the ERC by reporting it on their employment tax returns, normally Type 941. If the credit surpasses the quantity of employment taxes owed, the excess can be refunded to the company.
It is essential to note that the ERC arrangements and eligibility criteria have developed gradually. The best strategy is to consult with a tax professional or check out the main internal revenue service website for the most current and detailed information relating to the ERC, including any recent legal changes or updates.
To get approved for the ERC, a business needs to fulfill among the following requirements:.
The business operations were completely or partly suspended due to a government order related to COVID-19.
Business experienced a significant decline in gross invoices. For 2021, a considerable decline is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
The ERC is available to businesses of all sizes, including tax-exempt companies, however there are some exceptions. For instance, government entities and services that received a PPP loan may have constraints on declaring the credit.
The process for declaring the ERC includes completing the essential forms and consisting of the credit on your employment income tax return (generally Kind 941). The exact time it requires to process the credit can vary based upon a number of aspects, including the complexity of your company and the workload of the IRS. It’s recommended to consult with a tax professional for assistance particular to your circumstance.
There are numerous business that can help with the process of claiming the ERC. Some popular business that offer help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the info offered here is based upon basic knowledge and might not reflect the most recent updates or changes to the ERC. It is essential to talk to a tax expert or visit the official internal revenue service website for the most precise and current info concerning eligibility, claiming procedures, and offered assistance.
Less than 100. The credit is based if the company had 100 or fewer workers on average in 2019.
on incomes paid to all staff members whether they in fact worked or not. Simply put, even if the.
workers worked full time and made money for full time work, the employer still gets the credit.
Greater than 100. The credit is if the employer had more than 100 workers on average in 2019.
allowed only for incomes paid to staff members who did not work throughout the calendar quarter.
In both cases, “incomes” consists of not simply money payments but likewise a part of the expense of company.
supplied health care. Cares Act Employee Retention Credit Calculation
Employers can be immediately reimbursed for the credit by lowering the quantity of payroll taxes they.