Lets talk first about Employee Retention Credit Consolidated Appropriations Act :
Our team here what do these guys doing everyone in this space is assisting teach people about ERC and uh always supply a gorgeous breakfast and have people really discover the program we need to head to the room where we are able to display some 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 literally Kevin numerous countless dollars so these are duplicate copies of the letters that go to clients verifying that the check is on the way I imply you know if you simply start to take a look at a few of these here I mean this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s just I indicate think of how many actual clients that went through the program yeah this is the very end this is the party at the end when the check is validated the numbers are validated and the check is on the mail in the mail from the internal revenue service heading to the client 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 really receive the money they don’t pay bottom line Wonder trust anything up until this letter is validated the check is on the method they deposit it into their checking account and they can really rely on Wonder trust that the process has been ended up and the number of you believe you’ve processed considering that you began 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 need you require professionals 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 really essential today the employee retention credit which the majority of you have actually never become aware of I certainly had not become aware of it till really recently and learned a lot about it because this is probably the most affordable cost of capital for any small company anywhere
anytime if you have workers in between five 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 Principles 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 simply call up your bank supervisor 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 us all about it and how to get it and why I’ve become yes the Ambassador and paid representative for this I enjoy this program it’s going away soon you got to learn everything about it let’s talk worker retention credit Josh Fox what is an ERC let’s just start there so throughout the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act provided organizations three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody it makes a huge difference right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the money money payroll tax refund okay go on sorry I simply need to make sure we got that point I suggest that’s a huge distinction a loan versus money money I like money cash that’s what we’re speaking 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 beautiful hard check in the mail where you get actual cash from the internal revenue service all right so let’s speak 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 shareholders it’s for staff members right you needed to have owned a company however it’s based on you having W-2 employees in America not 10.99. As long as you had W-2 employees 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 right so there were six quarters the program was open well stroll us through the 6 quarters so you had quarters two 3 and 4 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 throughout that duration now let’s talk my favorite part cash just how much can you get back per employee that was on a W-2 in those 6 quarters so the calculation in 2020 to be specific Kevin is 50 of the employee’s salary to a maximum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the worker’s wage to a maximum of seven thousand per quarter how did that take place 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 staff members 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 then what happens 21 000 Max in 2021 oh that’s how you come up with twenty 6 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 great deal of money it is now there’s a caveat here the PPP money would have to be reduced from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would reduce the 26 000 so what we’re seeing usually Kevin is if you took PPP cash someplace around 10 thousand dollars a person 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 cash you would still get a million dollar in the mail from the IRS so it’s substantial undoubtedly now the huge concern is why does nobody understand about this due to the fact that look when I initially heard about this when I initially met Josh you understand I have actually got great deals of investments in great deals of companies I’m a significant supporter for entrepreneurship in America and make many many financial investments in business owners of which numerous suffered through the pandemic when I initially heard about this I called BS I do not think it because I use 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 which were well been worthy of and we used them sensibly to survive during the pandemic so when I became aware of this I stated nah it can’t be true but when I dug around I even called to my politician pals Governor Senators they didn’t learn about it I mean that’s how you understand that’s how false information is that there’s no info out there then a lot of individuals informed me well you can’t get it due to the fact that you took the PPP likewise not real so let’s ask Josh why does nobody learn 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 procedure 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 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 just procedure procedure that’s all um and here there was mayhem because keep in mind in the initial cares act you could refrain from doing both programs so if you had done PPP you could refrain from doing 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 federal government never ever made it clear to anybody about how to.
do this does your CFO understand how to do this not truly she or he’s never ever done it before 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 business your accounting professional no your accounting professional’s never ever done this prior to unless you have an account that went into this business and bottom line my firm Kevin has been in business given that 2009 and we’ve been dealing with the federal government and the state federal government to recuperate cash for Fortune 500 Fortune 1000 companies so a lot of our huge huge business customers have worked with bottom line to recover other federal government programs we’ve done sales tax and utilize tax joblessness tax work opportunity tax credits research and development tax credits unclaimed property property tax all of these other government programs.
The worker retention tax credit is a broad based refundable tax credit developed to encourage.
employers to keep employees on their payroll. The credit is 50% of as much as $10,000 in wages paid by an.
company whose service is fully or partly suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
1. The credit is offered to all companies despite size including tax exempt organizations. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
services 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 company’s business is completely 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 exceed 80% of an equivalent quarter in 2019 they no longer qualify.
after completion of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the certifying salaries paid up to $10,000 in total.
It works for salaries paid after March 13th and prior to December 31, 2020.
The meaning of certifying wages varies by whether a company had, on average, more or less than.
100 employees in 2019.
Companies that concentrate on ERC filing support normally offer proficiency and assistance to assist businesses navigate the intricate procedure of declaring the credit. They can offer different services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Consolidated Appropriations Act
Eligibility Evaluation: These companies will evaluate your company’s eligibility for the ERC based on elements such as your market, revenue, and operations. If you satisfy the requirements for the credit and recognize the optimum credit quantity you can declare, they can assist determine.
Documents and Computation: ERC filing services will help in collecting the essential paperwork, such as payroll records and financial declarations, to support your claim. They will likewise help compute the credit quantity based on eligible wages and other certifying expenditures.
Retroactive Claim Review: If you are eligible to claim the ERC for previous quarters, these business can examine your previous payroll records and financials to determine prospective opportunities for retroactive credits. They can help you modify previous tax returns to declare these refunds.
Filing Help: Companies concentrating on ERC filings will prepare and send the essential forms and documentation in your place. This includes finishing Form 941 or any other necessary tax return.
Compliance and Updates: ERC policies and guidance have developed in time. These companies stay updated with the most recent changes and make sure that your filings adhere to the most current standards. If the IRS demands additional details or conducts an audit associated to your ERC claim, they can also supply ongoing support.
It is very important to research study and veterinarian any company offering ERC filing assistance to ensure their trustworthiness and competence. Look for established companies with experience in tax and payroll services, or consider reaching out to relied on accounting firms or tax specialists who use ERC filing support.
Keep in mind that while these companies can offer valuable help, it’s constantly a great idea to have a basic understanding of the ERC requirements and procedure yourself. This will assist you make informed decisions and guarantee 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 steps. The goal of the ERC is to encourage companies to keep and pay their workers throughout the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to qualified employers, consisting of for-profit businesses, tax-exempt organizations, and particular governmental entities. To qualify, employers should meet one of two criteria:.
The 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 invoices. As pointed out previously, 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 significant decline is specified 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 immediately preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount is equal to a percentage (up to 70%) of qualified earnings paid to employees, including specific health insurance costs. The optimum 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 received an Income Security Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 permits organizations to claim the ERC even if they received a PPP loan. The same wages 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 earnings paid as far back as March 13, 2020. This retroactive provision supplies a chance for companies to amend prior-year income tax return and get refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their employment income tax return, generally Type 941. If the credit exceeds the quantity of work taxes owed, the excess can be reimbursed to the employer.
It is essential to keep in mind that the ERC arrangements and eligibility criteria have evolved over time. The best strategy is to seek advice from a tax expert or check out the main internal revenue service website for the most comprehensive and up-to-date details relating to the ERC, consisting of any recent legislative modifications or updates.
To qualify for the ERC, an organization should satisfy among the following requirements:.
Business operations were totally or partly suspended due to a government order related to COVID-19.
Business experienced a significant decrease in gross receipts. For 2021, a considerable decline is defined as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decline in gross invoices compared to the very same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
The ERC is available to organizations of all sizes, consisting of tax-exempt organizations, however there are some exceptions. Government entities and companies that got a PPP loan may have restrictions on claiming the credit.
The process for claiming the ERC involves completing the required types and consisting of the credit on your work income tax return (generally Form 941). The exact time it takes to process the credit can vary based upon numerous factors, consisting of the intricacy of your company and the workload of the IRS. It’s recommended to consult with a tax expert for guidance particular to your scenario.
There are several companies that can help with the process of claiming the ERC. Some popular companies that provide assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the information provided here is based upon basic knowledge 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 IRS website for the most accurate and updated information relating to eligibility, claiming treatments, and readily available help.
Less than 100. If the employer had 100 or less staff members usually in 2019, then the credit is based.
on wages paid to all workers whether they in fact worked or not. In other words, even if the.
employees 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 workers on average in 2019.
permitted only for wages paid to staff members who did not work during the calendar quarter.
In both cases, “incomes” consists of not simply cash payments however likewise a portion of the expense of employer.
provided healthcare. Employee Retention Credit Consolidated Appropriations Act
Companies can be right away repaid for the credit by decreasing the amount of payroll taxes they.