Lets talk first about Cares Act Employee Retention Credit For Employers :
Our group here what do these people doing everyone in this room is helping teach individuals about ERC and uh constantly provide a gorgeous breakfast and have individuals truly find out about the program we must head to the space where we have the ability to show a few of the checks that we are getting for business and I ‘d like to see that what is this this is uh hundreds of millions of dollars actually Kevin numerous countless dollars so these are duplicate copies of the letters that go to customers validating that the check is on the way I suggest you know if you just begin to look at a few 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 actual clients that went through the program yeah this is the very end this is the party at the end when the check is confirmed the numbers are validated and the check is on the mail in the mail from the IRS heading to the consumer so that’s how you’re able to track it you understand when you
get this you understand the check is gone for sure which’s when they pay so they don’t pay anything until they actually receive the cash they don’t pay bottom line Wonder trust anything until this letter is confirmed the check is on the way they transfer it into their bank 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 began this we’re about 35 000 of these for
about 6 billion dollars wow so clearly they know what they’re doing and that’s what you need you require specialists 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 Fantastic here you’re at my YouTube channel we’re discussing something really important today the staff member retention credit which the majority of you have never ever become aware of I definitely hadn’t become aware of it up until really recently and found out a lot about it due to the fact that this is probably the lowest cost of capital for any small company anywhere
anytime if you have workers between five and five hundred so I’ve got the expert with me this is Josh Fox he’s the founder and CEO of bottom line Ideas they’re the biggest processor of these ERC credits this is a 170 page program so it’s difficult this isn’t like PPP we simply call up your bank manager 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 ended up being yes the Ambassador and paid representative for this I enjoy this program it’s disappearing very soon you got to find out everything about it let’s talk worker retention credit Josh Fox what is an ERC let’s just start there so during the Trump Administration when President Trump was enacted they created the cares Act and the cares act used organizations 3 opportunities 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 two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the cash cash payroll tax refund fine go on sorry I just have to make certain we got that point I imply that’s a huge difference a loan versus cash money I like money money 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 gorgeous tough check in the mail where you get real money from the internal revenue service all right so let’s talk about how it works because it sounds like to me if it’s a if it’s employee retention credit that individual needed to be an employee so I’m going to make the Assumption this money is not for the owner not for people on the cap table not for shareholders it’s for workers right you had to have actually owned a business however it’s based on you having W-2 employees 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 six months of 2021 on the W-2 right so there were 6 quarters the program was open well walk us through the 6 quarters so you had quarters two 3 and four of 2020 and you had quarters one two and three of 2021. all right so that’s how it’s determined you need to be on the W-2 during that duration now let’s talk my favorite part money how much can you return per worker that was on a W-2 in those six quarters so the estimation in 2020 to be specific Kevin is 50 of the worker’s wage to an optimum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s wage to a maximum of seven thousand per quarter how did that take place 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 employees 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 happens 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 caution here the PPP cash would need to be reduced 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 money somewhere around ten thousand dollars a person so let’s say hypothetically you owned a restaurant in New York 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 undoubtedly now the big question is why does no one understand about this because appearance when I initially became aware of this when I first met Josh you know I’ve got lots of investments in great deals of companies I’m a major supporter for entrepreneurship in America and make many many financial investments in entrepreneurs of which many suffered through the pandemic when I initially heard about this I called BS I do not think it due to the fact that I use the PPP we went through the money 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 been worthy of and we utilized them wisely to stay alive during the pandemic so when I became aware of this I stated nah it can’t hold true but when I dug around I even contacted us to my politician pals Guv Senators they didn’t know about it I mean that’s how you understand that’s how false information is that there’s no information out there then a bunch of individuals told me well you can’t get it because you took the PPP likewise not real so let’s ask Josh why does no one understand about the worker retention credit you know what’s interesting you’re discussing the banks Kevin because in the PPP loan procedure the federal government made it really clear that if you desired 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 simply process process that’s all um and here there was chaos since remember in the original cares act you might refrain from doing both programs so if you had done PPP you could refrain from doing ERC in the original program and when they altered 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 ever made it clear to any person about how to.
do this does your CFO know how to do this not truly she or he’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 business your accountant no your accounting professional’s never ever done this prior to unless you have an account that went into this company and bottom line my company Kevin has been in business since 2009 and we have actually been dealing with the federal government and the state federal government to recover cash for Fortune 500 Fortune 1000 companies so a great deal of our huge big business clients have worked with bottom line to recuperate other 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 employee 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 up to $10,000 in earnings paid by an.
company whose business is fully or partly suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
1. The credit is readily available to all companies regardless of size consisting of tax exempt companies. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) little.
organizations who take Small company Loans.
2. To qualify, the employer needs to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s company is totally or partly suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are listed below 50% of the equivalent quarter in 2019. Once the.
company’s gross invoices go above 80% of a similar 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 certifying earnings 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 incomes varies by whether a company had, usually, more or less than.
100 employees in 2019.
Companies that focus on ERC filing help generally supply know-how and support to assist companies navigate the intricate process of declaring the credit. They can provide different services, including:.
How is the employee retention credit calculated? Cares Act Employee Retention Credit For Employers
Eligibility Assessment: These business will examine your organization’s eligibility for the ERC based upon aspects such as your market, profits, and operations. If you satisfy the requirements for the credit and identify the optimum credit amount you can claim, they can assist determine.
Paperwork and Calculation: ERC filing services will help in collecting the essential documentation, such as payroll records and monetary declarations, to support your claim. They will also assist determine the credit quantity based upon eligible salaries and other qualifying costs.
Retroactive Claim Review: If you are eligible to declare the ERC for prior quarters, these companies can examine your past payroll records and financials to identify possible chances for retroactive credits. They can assist you amend previous income tax return to claim these refunds.
Filing Support: Companies specializing in ERC filings will prepare and send the necessary kinds and documentation on your behalf. This consists of completing Kind 941 or any other required tax forms.
Compliance and Updates: ERC guidelines and guidance have actually developed in time. These companies stay updated with the current changes and make sure that your filings adhere to the most current standards. If the IRS requests additional information or carries out an audit associated to your ERC claim, they can likewise provide ongoing support.
It is very important to research and vet any company offering ERC filing help to ensure their trustworthiness and competence. Try to find established companies with experience in tax and payroll services, or think about reaching out to relied on accounting firms or tax specialists who provide ERC filing support.
Bear in mind that while these companies can provide important assistance, it’s always a great idea to have a fundamental understanding of the ERC requirements and procedure yourself. This will assist you make notified choices and make sure precise filings.
The Worker Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief steps. The objective of the ERC is to encourage companies to retain and pay their staff members throughout the pandemic, even if their operations have been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to eligible companies, consisting of for-profit businesses, tax-exempt organizations, and particular governmental entities. To qualify, companies should meet one of two requirements:.
Business operations were completely or partly suspended due to a government order related to COVID-19.
The business experienced a substantial decrease in gross receipts. As mentioned earlier, for 2021, a considerable decrease is defined as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit quantity amounts to a portion (approximately 70%) of certified salaries paid to employees, consisting of particular health insurance expenses. The maximum credit per worker 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 Security 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 got a PPP loan. Nevertheless, the exact same earnings can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and improved, permitting qualified employers to claim the credit for qualified incomes paid as far back as March 13, 2020. This retroactive provision provides a chance for organizations to change prior-year tax returns and receive refunds.
Claiming the Credit: Companies can declare the ERC by reporting it on their employment tax returns, usually Form 941. The excess can be refunded to the company if the credit goes beyond the amount of employment taxes owed.
It is very important to note that the ERC arrangements and eligibility requirements have actually progressed in time. The very best strategy is to seek advice from a tax expert or go to the main internal revenue service site for the most comprehensive and up-to-date info relating to the ERC, consisting of any recent legislative changes or updates.
To receive the ERC, a business must satisfy one of the following requirements:.
Business operations were totally or partially suspended due to a federal government order related to COVID-19.
The 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 same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decline in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross receipts compared to the immediately preceding quarter.
The ERC is readily available to businesses of all sizes, including tax-exempt organizations, however there are some exceptions. Federal government entities and businesses that got a PPP loan might have restrictions on claiming the credit.
The process for claiming the ERC includes finishing the necessary forms and including the credit on your employment tax return (normally Type 941). The exact time it takes to process the credit can differ based upon a number of elements, including the intricacy of your service and the workload of the internal revenue service. It’s advised to seek advice from a tax expert for guidance specific to your scenario.
There are numerous business that can assist with the procedure of declaring the ERC. Some well-known companies that offer assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the details provided here is based upon general understanding and may not show the most current updates or modifications to the ERC. It’s important to seek advice from a tax professional or check out the main internal revenue service site for the most precise and updated information concerning eligibility, declaring procedures, and readily available assistance.
Less than 100. The credit is based if the employer had 100 or less staff members on average in 2019.
on earnings paid to all employees whether they actually worked or not. Simply put, even if the.
employees worked full time and got paid for full-time work, the employer still gets the credit.
Greater than 100. The credit is if the employer had more than 100 staff members on average in 2019.
allowed just for earnings paid to staff members who did not work during the calendar quarter.
In both cases, “salaries” consists of not just cash payments but also a part of the expense of company.
supplied healthcare. Cares Act Employee Retention Credit For Employers
Employers can be immediately repaid for the credit by reducing the quantity of payroll taxes they.