Lets talk first about Cares Act Section 2301 Employee Retention Credit :
Our group here what do these guys doing everyone in this room is helping teach individuals about ERC and uh constantly provide a gorgeous breakfast and have people actually find out about the program we must head to the room 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 numerous countless dollars actually Kevin numerous millions of dollars so these are duplicate copies of the letters that go to customers confirming that the check is on the way I imply you know if you simply begin to take a look at some 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 imply consider how many actual clients that went through the program yeah this is the very end this is the celebration at the end when the check is validated the numbers are confirmed and the check is on the mail in the mail from the IRS heading to the consumer so that’s how you have the ability to track it you understand when you
receive this you understand the check is chosen sure and that’s when they pay so they do not pay anything till 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 savings account and they can really rely on Wonder trust that the process has been completed and how many you think you’ve processed given that you started this we’re about 35 000 of these for
about six billion dollars wow so plainly they understand 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 among these that’s what matters all right Mr Fantastic here you’re at my YouTube channel we’re speaking about something truly important today the worker retention credit which the majority of you have never heard of I definitely had not heard of it till very just recently and found out a lot about it because this is most likely the lowest expense of capital for any small company anywhere
anytime if you have employees in between five and five hundred so I have actually got the expert with me this is Josh Fox he’s the founder and CEO of bottom line Concepts they’re the largest processor of these ERC credits this is a 170 page program so it’s not easy this isn’t like PPP we just call up your bank supervisor and state offer me a loan it does not work there’s not a loan it’s an application and Josh is going to tell us all about it and how to get it and why I’ve become yes the Ambassador and paid spokesperson for this I like this program it’s disappearing soon you got to learn 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 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone 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.
fix the money money payroll tax refund fine go on sorry I simply have to ensure we got that point I suggest that’s a big distinction a loan versus money cash I like cash money that’s what we’re discussing 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 lovely difficult check in the mail where you get actual cash from the internal revenue service all right so let’s speak about how it works since it seems like to me if it’s a if it’s employee retention credit that individual had 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 investors it’s for workers right you needed to have owned an organization 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 six quarters the program was open well walk us through the six quarters so you had quarters 2 three and four of 2020 and you had quarters one 2 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 preferred part cash just how much can you get back per worker that was on a W-2 in those 6 quarters so the computation in 2020 to be precise Kevin is 50 of the worker’s wage to a maximum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers increased to 70 of the employee’s wage to a maximum of seven thousand per quarter how did that happen um they just changed the rules in.
2021 versus due to the fact that 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 after that what takes place 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 six thousand dollars per worker that is since that’s a lot of cash it is now there’s a caveat 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 lower 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 dining establishment 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 IRS so it’s huge undoubtedly now the big concern is why does nobody know about this because look when I first heard about this when I first fulfilled Josh you know I’ve got lots of investments in lots of business I’m a significant advocate for entrepreneurship in America and make numerous many financial investments in business owners of which numerous suffered through the pandemic when I initially heard about this I called BS I don’t think it since I use the PPP we went through the cash center Banks to get it it was extremely easy to do we had our CEOs call the banks they got their loans which were well been worthy of and we utilized them carefully to survive throughout the pandemic so when I became aware of this I said nah it can’t hold true but when I dug around I even called to my politician pals Guv Senators they didn’t learn about it I indicate that’s how you know that’s how false information is that there’s no info out there then a lot of people told me well you can’t get it since you took the PPP also not true so let’s ask Josh why does no one learn about the worker retention credit you understand what’s fascinating you’re discussing the banks Kevin because in the PPP loan process 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 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 process procedure that’s all um and here there was mayhem due to the fact that remember in the initial cares act you might not do both programs so if you had done PPP you might not do ERC in the initial program and when they changed the law in 2021 the banks were refraining from 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 understand how to do this not truly he or she’s never ever done it before do the banks do it nope the banks don’t do it the payroll business yeah some of them are doing it as a payroll company your accounting professional no your accountant’s never done this prior to unless you have an account that went into this organization and bottom line my company Kevin has been in business because 2009 and we’ve 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 big big business clients have worked with bottom line to recover other government programs we have actually done sales tax and utilize tax unemployment tax work opportunity tax credits research and development tax credits unclaimed property property tax all of these other federal government programs.
The employee 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 wages paid by an.
Since of COVID-19 or whose gross invoices, employer whose organization is totally or partially suspended.
decline by more than 50%.
1. The credit is available to all employers despite size consisting of tax exempt organizations. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) little.
companies who take Small Business Loans.
2. To certify, the employer needs to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s service is completely or partly suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the comparable quarter in 2019. As soon as the.
company’s gross invoices exceed 80% of an equivalent quarter in 2019 they no longer certify.
after completion of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the certifying incomes paid up to $10,000 in total.
It is effective for incomes paid after March 13th and prior to December 31, 2020.
The definition of qualifying earnings varies by whether a company had, usually, more or less than.
100 staff members in 2019.
Companies that specialize in ERC filing assistance usually provide competence and assistance to assist businesses navigate the complicated procedure of claiming the credit. They can provide various services, consisting of:.
How is the employee retention credit calculated? Cares Act Section 2301 Employee Retention Credit
Eligibility Assessment: These business will assess your service’s eligibility for the ERC based upon aspects such as your market, income, and operations. If you satisfy the requirements for the credit and identify the optimum credit quantity you can declare, they can help identify.
Documents and Estimation: ERC filing services will assist in collecting the essential documents, such as payroll records and financial declarations, to support your claim. They will likewise assist determine the credit amount based upon qualified incomes and other certifying expenditures.
Retroactive Claim Evaluation: If you are eligible to claim the ERC for prior quarters, these companies can evaluate your past payroll records and financials to identify possible opportunities for retroactive credits. They can assist you amend previous tax returns to declare these refunds.
Filing Assistance: Business concentrating on ERC filings will prepare and send the needed kinds and paperwork on your behalf. This includes finishing Type 941 or any other necessary tax forms.
Compliance and Updates: ERC policies and assistance have actually evolved gradually. These companies stay updated with the current modifications and ensure that your filings adhere to the most current standards. If the Internal revenue service demands additional info or conducts an audit related to your ERC claim, they can likewise provide continuous support.
It’s important to research study and veterinarian any company using ERC filing assistance to guarantee their reliability and expertise. Try to find recognized firms with experience in tax and payroll services, or think about reaching out to relied on accounting firms or tax professionals who offer ERC submitting assistance.
Bear in mind that while these companies can supply important support, it’s always a great concept to have a fundamental understanding of the ERC requirements and procedure yourself. This will assist you make informed decisions and guarantee precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief steps. The goal of the ERC is to motivate companies to maintain and pay their employees throughout the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to qualified companies, consisting of for-profit companies, tax-exempt companies, and certain governmental entities. To qualify, companies need to fulfill one of two criteria:.
The business operations were completely or partly suspended due to a federal government order related to COVID-19.
Business experienced a considerable decline in gross receipts. As pointed out previously, for 2021, a considerable decrease is defined as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the right away preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount amounts to a portion (as much as 70%) of qualified earnings paid to employees, consisting of particular health insurance expenditures. The maximum credit per staff member is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, companies that received a Paycheck Protection Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 enables companies to declare the ERC even if they received a PPP loan. Nevertheless, the very same earnings can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively broadened and enhanced, enabling eligible companies to claim the credit for certified incomes paid as far back as March 13, 2020. This retroactive arrangement offers an opportunity for companies to amend prior-year tax returns and get refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their employment income tax return, generally Kind 941. The excess can be reimbursed to the company if the credit exceeds the quantity of employment taxes owed.
It is very important to note that the ERC arrangements and eligibility criteria have progressed gradually. The best course of action is to consult with a tax expert or go to the main internal revenue service website for the most updated and in-depth details concerning the ERC, including any current legal modifications or updates.
To qualify for the ERC, a service must satisfy one of the following requirements:.
The business operations were totally or partly suspended due to a government order related to COVID-19.
Business experienced a substantial decline in gross receipts. For 2021, a considerable decrease is defined as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decline in gross invoices compared to the right away preceding quarter.
The ERC is readily available to companies of all sizes, including tax-exempt organizations, but there are some exceptions. For instance, government entities and organizations that received a PPP loan might have restrictions on declaring the credit.
The process for claiming the ERC includes finishing the essential forms and including the credit on your employment income tax return (generally Form 941). The exact time it requires to process the credit can differ based on numerous elements, consisting of the intricacy of your business and the workload of the internal revenue service. It’s advised to speak with a tax professional for guidance specific to your circumstance.
There are numerous companies that can assist with the process of declaring the ERC. Some well-known companies that offer support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the information supplied here is based on general understanding and may not reflect the most current updates or changes to the ERC. It is essential to talk to a tax professional or visit the official internal revenue service site for the most precise and updated details concerning eligibility, declaring procedures, and available support.
Less than 100. The credit is based if the employer had 100 or fewer employees on average in 2019.
on incomes paid to all workers whether they actually worked or not. Simply put, even if the.
staff members 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 employees on average in 2019.
permitted just for salaries paid to employees who did not work during the calendar quarter.
In both cases, “salaries” consists of not just money payments but also a portion of the expense of company.
provided health care. Cares Act Section 2301 Employee Retention Credit
Companies can be right away reimbursed for the credit by minimizing the amount of payroll taxes they.