Lets talk first about Consolidated Appropriations Act Employee Retention Credit :
Our team here what do these people doing everybody in this space is assisting teach people about ERC and uh constantly provide a beautiful breakfast and have people truly learn about the program we ought to head to the room where we are able to display a few of the checks that we are getting for companies and I want to see that what is this this is uh numerous countless dollars literally Kevin numerous countless dollars so these are duplicate copies of the letters that go to clients verifying that the check is on the method I indicate you know if you simply begin 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 imply it’s just I indicate think about 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 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 chosen sure which’s when they pay so they do not pay anything until they really receive the money they don’t pay bottom line Wonder trust anything till this letter is validated the check is on the way they deposit it into their checking account and they can really rely on Wonder trust that the procedure has actually been ended up and the number of you think you have actually processed considering that you began this we have to do with 35 000 of these for
about six billion dollars wow so plainly 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 Fantastic here you’re at my YouTube channel we’re speaking about something truly crucial today the staff member retention credit which the majority of you have never become aware of I definitely hadn’t heard of it till very just recently and learned a lot about it due to the fact that this is probably the most affordable expense of capital for any small company anywhere
anytime if you have workers between 5 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 Ideas they’re the largest processor of these ERC credits this is a 170 page program so it’s hard this isn’t like PPP we just phone your bank manager and say provide me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to tell 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 like 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 simply start there so during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act offered organizations 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everybody it makes a huge 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 okay go on sorry I simply have to make certain we got that point I mean that’s a huge distinction a loan versus cash cash I like cash money that’s what we’re talking about all right 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 hard check in the mail where you get actual money from the IRS all right so let’s speak about how it works since it sounds like to me if it’s a if it’s staff member retention credit that person needed to be a staff member so I’m going to make the Assumption this cash is not for the owner not for individuals on the cap table not for shareholders it’s for employees 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 6 months of 2021 on the W-2 correct so there were 6 quarters the program was open well walk us through the 6 quarters so you had quarters two three and four of 2020 and you had quarters one two and 3 of 2021. okay so that’s how it’s measured you need to be on the W-2 throughout that duration now let’s talk my favorite part cash just how much can you return per worker that was on a W-2 in those six quarters so the computation in 2020 to be specific Kevin is 50 of the staff member’s wage to a maximum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the worker’s salary to an optimum of seven thousand per quarter how did that occur um they just changed the rules in.
2021 versus since the turmoil 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 up to 5 thousand Max and after that what happens 21 000 Max in 2021 oh that’s how you develop twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per worker that is since that’s a lot of money it is now there’s a caution here the PPP money would need to be lowered from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would reduce the 26 000 so what we’re seeing on average Kevin is if you took PPP money someplace around ten thousand dollars an individual so let’s say hypothetically you owned a dining establishment in New York City where I’m from and you had a hundred staff members and you took PPP money you would still get a million dollar in the mail from the IRS so it’s big obviously now the big concern is why does nobody learn about this because appearance when I first found out about this when I initially satisfied Josh you understand I have actually got lots of financial investments in lots of companies I’m a significant advocate for entrepreneurship in America and make many many financial investments in entrepreneurs of which numerous suffered through the pandemic when I first became aware of this I called BS I do not think it since 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 and that were well been worthy of and we utilized them carefully to stay alive during the pandemic so when I found out about this I said nah it can’t be true however when I dug around I even contacted us to my political leader buddies Guv Senators they didn’t know 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 people informed me well you can’t get it due to the fact that you took the PPP likewise 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 talking about the banks Kevin because 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 nation and they would process procedure 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 mayhem since keep in mind in the original cares act you could refrain from doing both programs so if you had actually done PPP you might not do ERC in the initial program and when they altered the law in 2021 the banks were refraining from doing ERC since it’s not alone so you’re getting a tax refund so the federal government never made it clear to any person about how to.
do this does your CFO know how to do this not actually he or she’s never done it previously do the banks do it nope the banks do not do it the payroll companies yeah some of them are doing it as a payroll company your accountant no your accountant’s never done this before unless you have an account that entered into this organization and bottom line my firm Kevin has stayed in business considering that 2009 and we’ve been dealing with the federal government and the state federal government to recuperate cash for Fortune 500 Fortune 1000 business so a lot of our huge big corporate customers have dealt with bottom line to recuperate other government programs we’ve done sales tax and use tax joblessness tax work opportunity tax credits research and development tax credits unclaimed home real estate tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit designed to encourage.
companies to keep staff members on their payroll. The credit is 50% of approximately $10,000 in earnings paid by an.
Since of COVID-19 or whose gross receipts, company whose company is fully or partially suspended.
decrease by more than 50%.
1. The credit is available to all companies no matter size consisting of tax exempt companies. 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 company needs to fulfill one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s service is totally 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 a comparable quarter in 2019 they no longer certify.
after the end of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the qualifying wages paid up to $10,000 in total.
It is effective for salaries paid after March 13th and before December 31, 2020.
The meaning of qualifying wages varies by whether a company had, typically, more or less than.
100 employees in 2019.
Companies that specialize in ERC filing assistance normally offer competence and support to assist companies browse the complicated process of claiming the credit. They can use numerous services, consisting of:.
How is the employee retention credit calculated? Consolidated Appropriations Act Employee Retention Credit
Eligibility Assessment: These companies will assess your business’s eligibility for the ERC based upon aspects such as your industry, profits, and operations. If you meet the requirements for the credit and determine the optimum credit quantity you can claim, they can help identify.
Documentation and Estimation: ERC filing services will help in collecting the necessary documents, such as payroll records and monetary declarations, to support your claim. They will likewise assist compute the credit amount based upon eligible salaries and other qualifying costs.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for prior quarters, these companies can review your previous payroll records and financials to determine prospective opportunities for retroactive credits. They can help you modify prior income tax return to declare these refunds.
Filing Help: Companies concentrating on ERC filings will prepare and send the needed types and documentation on your behalf. This consists of finishing Kind 941 or any other necessary tax return.
Compliance and Updates: ERC guidelines and guidance have progressed over time. These business stay upgraded with the current changes and make sure that your filings abide by the most current standards. They can also provide ongoing assistance if the IRS demands additional details or conducts an audit related to your ERC claim.
It is necessary to research study and veterinarian any company offering ERC filing help to ensure their trustworthiness and competence. Search for established companies with experience in tax and payroll services, or think about reaching out to relied on accounting companies or tax experts who provide ERC submitting support.
Bear in mind that while these business can supply important assistance, it’s always an excellent concept to have a standard understanding of the ERC requirements and procedure yourself. This will help you make informed choices and ensure precise filings.
The Worker Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief measures. The objective of the ERC is to encourage companies to retain and pay their staff members throughout the pandemic, even if their operations have actually been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is available to eligible employers, including for-profit businesses, tax-exempt companies, and specific governmental entities. To certify, employers should fulfill one of two criteria:.
Business operations were fully or partially suspended due to a federal government order related to COVID-19.
The business experienced a substantial decline in gross receipts. As discussed previously, for 2021, a significant decline is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decline in gross receipts compared to the very same quarter in 2019, or a 20% decrease 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 amounts to a percentage (up to 70%) of qualified salaries paid to workers, consisting of specific health insurance 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: At first, companies that got a Paycheck Protection Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 enables organizations to claim the ERC even if they received a PPP loan. Nevertheless, the exact same salaries can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and improved, allowing eligible companies to claim the credit for certified salaries paid as far back as March 13, 2020. This retroactive arrangement supplies a chance for organizations to amend prior-year income tax return and receive refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their employment income tax return, typically Type 941. If the credit exceeds the quantity of work taxes owed, the excess can be refunded to the employer.
It’s important to keep in mind that the ERC provisions and eligibility requirements have actually progressed in time. The very best strategy is to consult with a tax expert or check out the official IRS site for the most up-to-date and in-depth details relating to the ERC, including any recent legislative changes or updates.
To get approved for the ERC, a business needs to satisfy among the following requirements:.
The business operations were fully or partly suspended due to a government order related to COVID-19.
The business experienced a substantial decline in gross receipts. For 2021, a substantial decline is specified as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a considerable 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 immediately preceding quarter.
The ERC is offered to companies of all sizes, consisting of tax-exempt companies, however there are some exceptions. Government entities and organizations that got a PPP loan may have constraints on declaring the credit.
The process for declaring the ERC includes finishing the required types and including the credit on your employment income tax return (normally Type 941). The exact time it requires to process the credit can differ based on several aspects, consisting of the intricacy of your company and the workload of the IRS. It’s suggested to consult with a tax expert for guidance particular to your scenario.
There are several business that can assist with the procedure of declaring the ERC. Some widely known business that provide help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the details supplied here is based upon basic understanding and may not reflect the most recent updates or modifications to the ERC. It is necessary to consult with a tax expert or check out the main internal revenue service site for the most updated and precise info relating to eligibility, claiming treatments, and offered assistance.
Less than 100. If the employer had 100 or fewer workers typically in 2019, then the credit is based.
on earnings paid to all workers whether they actually worked or not. To put it simply, even if the.
workers worked full time and earned money for full-time work, the company still gets the credit.
Greater than 100. The credit is if the employer had more than 100 employees on average in 2019.
permitted only for incomes paid to staff members who did not work throughout the calendar quarter.
In both cases, “incomes” consists of not simply cash payments but also a part of the cost of employer.
provided healthcare. Consolidated Appropriations Act Employee Retention Credit
Employers can be right away reimbursed for the credit by lowering the quantity of payroll taxes they.