Lets talk first about Cares-employee Retention Credit Payable :
Our team here what do these men doing everyone in this space is assisting teach people about ERC and uh constantly supply a beautiful breakfast and have individuals actually learn about the program we need to head to the room where we have the ability to display some of the checks that we are getting for business and I want to see that what is this this is uh hundreds of millions of dollars literally Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to clients confirming that the check is on the way I suggest you understand if you just start to take a 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 mean it’s simply I suggest think about the number of real clients 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 IRS heading to the client so that’s how you have the ability to track it you understand when you
get this you understand the check is opted for sure and that’s when they pay so they do not pay anything till they actually receive the cash they do not pay bottom line Wonder trust anything till this letter is confirmed the check is on the method they transfer it into their bank account and they can truly rely on Wonder trust that the process has actually been ended up and the number of you think you have actually processed given that you started this we have to do with 35 000 of these for
about six billion dollars wow so clearly they understand what they’re doing and that’s what you require you require specialists 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 actually essential today the staff member retention credit which most of you have actually never ever heard of I certainly hadn’t become aware of it until extremely just recently and found out a lot about it because this is most likely the most affordable expense of capital for any small company anywhere
anytime if you have workers in between 5 and five hundred so I have actually got the specialist with me this is Josh Fox he’s the creator and CEO of bottom line Concepts 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 offer me a loan it doesn’t 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 have actually ended up being yes the Ambassador and paid representative for this I enjoy this program it’s going away very 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 developed the cares Act and the cares act used companies 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 huge distinction right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the cash money payroll tax refund alright go on sorry I just have to make certain we got that point I imply that’s a huge distinction a loan versus money money I like money cash 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 original cares Act is the ERC and yes Kevin it is a beautiful difficult check in the mail where you get actual money from the internal revenue service all right so let’s talk about how it works due to the fact that it seems like to me if it’s a if it’s employee retention credit that person had to be an employee so I’m going to make the Presumption this money is not for the owner not for individuals on the cap table not for investors it’s for employees right you had to have actually owned a business but it’s based upon you having W-2 employees in America not 10.99. so 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 need to be on payroll for the very first six months of 2021 on the W-2 appropriate so there were six quarters the program was open well walk us through the six quarters so you had quarters 2 three and 4 of 2020 and you had quarters one two and three of 2021. fine 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 money just how much can you return per worker that was on a W-2 in those six quarters so the calculation in 2020 to be exact Kevin is 50 of the worker’s salary to an optimum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers increased to 70 of the worker’s salary to a maximum of seven thousand per quarter how did that take place um they simply altered the rules in.
2021 versus since the mayhem 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 up to five thousand Max and after that what occurs 21 000 Max in 2021 oh that’s how you develop twenty 6 thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty 6 thousand dollars per employee 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 reduced 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 usually Kevin is if you took PPP cash somewhere around ten thousand dollars a person so let’s state hypothetically you owned a dining establishment in New York City where I’m from and you had a hundred employees and you took PPP cash you would still get a million dollar in the mail from the IRS so it’s huge clearly now the big question is why does no one understand about this because appearance when I first found out about this when I initially satisfied Josh you know I’ve got lots of investments in lots of business I’m a major supporter for entrepreneurship in America and make many lots of investments in business owners of which lots of suffered through the pandemic when I initially became aware of this I called BS I do not believe it since I utilize the PPP we went through the money center Banks to get it it was extremely easy to do we had our CEOs call the banks they got their loans and that were well deserved and we used them wisely to stay alive during the pandemic so when I heard about this I said nah it can’t hold true but when I dug around I even called to my political leader buddies Governor Senators they didn’t learn about it I suggest that’s how you know that’s how misinformation is that there’s no details out there then a lot of individuals informed me well you can’t get it since 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 discussing the banks Kevin since in the PPP loan process the federal government made it very 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 process in Canada a pre-pp loan there’s no loans in Canada by the way it’s just procedure process that’s all um and here there was mayhem due to the fact that keep in mind in the original cares act you could refrain from doing both programs so if you had done PPP you could not do ERC in the original program and when they changed the law in 2021 the banks were not doing ERC because it’s not alone so you’re getting a tax refund so the government never ever made it clear to anybody about how to.
do this does your CFO understand how to do this not actually she or he’s never ever done it before 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 business your accounting professional no your accountant’s never done this prior to unless you have an account that entered into this company and bottom line my firm Kevin has actually been in business considering that 2009 and we have actually been working with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 business so a great deal of our huge huge corporate customers have dealt with bottom line to recuperate other federal government programs we have actually done sales tax and utilize tax unemployment tax work chance 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.
companies to keep staff members on their payroll. The credit is 50% of up to $10,000 in salaries paid by an.
employer whose company is completely or partly suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
1. The credit is readily available to all employers no matter 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 qualify, the company has to satisfy one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’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 receipts are listed below 50% of the similar quarter in 2019. Once the.
employer’s gross invoices go above 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 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 certifying wages varies by whether an employer had, usually, more or less than.
100 workers in 2019.
Companies that concentrate on ERC filing help typically offer competence and support to help services navigate the complex procedure of claiming the credit. They can offer various services, including:.
How is the employee retention credit calculated? Cares-employee Retention Credit Payable
Eligibility Evaluation: These business will evaluate your organization’s eligibility for the ERC based on 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 figure out.
Documentation and Estimation: ERC filing services will assist in gathering the essential documentation, such as payroll records and financial declarations, to support your claim. They will also help determine the credit quantity based on qualified earnings and other qualifying expenditures.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for previous quarters, these business can review your past payroll records and financials to recognize prospective opportunities for retroactive credits. They can assist you amend prior tax returns to claim these refunds.
Filing Help: Business focusing on ERC filings will prepare and send the required types and documentation on your behalf. This includes completing Kind 941 or any other necessary tax forms.
Compliance and Updates: ERC guidelines and guidance have progressed with time. These business remain upgraded with the latest modifications and make sure that your filings abide by the most present standards. If the Internal revenue service demands additional information or conducts an audit associated to your ERC claim, they can likewise provide continuous assistance.
It is essential to research study and veterinarian any business offering ERC filing support to ensure their trustworthiness and know-how. Search for recognized firms with experience in tax and payroll services, or consider reaching out to trusted accounting companies or tax specialists who offer ERC filing support.
Remember that while these companies can supply important support, it’s constantly an excellent concept to have a standard understanding of the ERC requirements and process yourself. This will assist you make notified choices and make sure accurate 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 objective of the ERC is to encourage companies to maintain and pay their employees during the pandemic, even if their operations have actually been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to eligible employers, including for-profit services, tax-exempt companies, and specific governmental entities. To certify, employers must satisfy one of two requirements:.
The business operations were totally or partly suspended due to a federal government order related to COVID-19.
Business experienced a substantial decrease in gross invoices. As mentioned earlier, for 2021, a significant decrease is defined as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decline in gross invoices compared to the right away preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit quantity amounts to a portion (as much as 70%) of qualified incomes paid to staff members, consisting of certain health insurance expenditures. The optimum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, organizations that got a Paycheck Security Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 permits organizations to declare the ERC even if they got a PPP loan. Nevertheless, the very same earnings can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and boosted, allowing qualified companies to claim the credit for certified wages paid as far back as March 13, 2020. This retroactive arrangement provides an opportunity for services to change prior-year tax returns and receive refunds.
Declaring the Credit: Employers can declare the ERC by reporting it on their employment tax returns, typically Form 941. The excess can be refunded to the company if the credit exceeds the quantity of work taxes owed.
It is necessary to note that the ERC provisions and eligibility requirements have evolved in time. The very best strategy is to seek advice from a tax expert or check out the main IRS site for the most in-depth and updated details relating to the ERC, including any recent legislative changes or updates.
To get approved for the ERC, a service needs to meet one of the following criteria:.
The business operations were fully or partly suspended due to a government order related to COVID-19.
The business experienced a considerable decline in gross invoices. For 2021, a significant decline is specified as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a significant decrease 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 services of all sizes, consisting of tax-exempt organizations, however there are some exceptions. Government entities and companies that received a PPP loan may have restrictions on declaring the credit.
The procedure for claiming the ERC involves completing the essential kinds and consisting of the credit on your employment income tax return (usually Kind 941). The exact time it takes to process the credit can vary based upon numerous elements, including the complexity of your business and the workload of the internal revenue service. It’s recommended to consult with a tax expert for guidance particular to your circumstance.
There are a number of companies that can assist with the procedure of declaring the ERC. Some popular companies that provide support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the details provided here is based upon basic understanding and may not reflect the most current updates or modifications to the ERC. It’s important to talk to a tax expert or visit the main internal revenue service website for the most accurate and updated information concerning eligibility, declaring treatments, and offered assistance.
Less than 100. If the employer had 100 or less employees usually in 2019, then the credit is based.
on earnings paid to all workers whether they actually worked or not. In other words, even if the.
workers worked full time and made money for full-time work, the employer still gets the credit.
Greater than 100. If the company had more than 100 staff members usually in 2019, then the credit is.
permitted just for incomes paid to staff members who did not work throughout the calendar quarter.
In both cases, “earnings” consists of not just money payments but likewise a portion of the cost of employer.
provided health care. Cares-employee Retention Credit Payable
Employers can be immediately compensated for the credit by reducing the quantity of payroll taxes they.