Lets talk first about Employee Retention Credit Income Tax Reporting :
Our team here what do these guys doing everybody in this space is helping teach people about ERC and uh constantly provide a lovely breakfast and have individuals truly find out about the program we must head to the space where we are able to display a few of the checks that we are getting for business and I wish to see that what is this this is uh numerous millions of dollars actually Kevin numerous millions of dollars so these are replicate copies of the letters that go to clients validating that the check is on the way I indicate you understand if you just begin 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 indicate it’s just I mean think of how many real customers 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 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 know the check is chosen sure and that’s when they pay so they do not pay anything up until they in fact get the money they don’t pay bottom line Wonder trust anything till this letter is verified the check is on the method they transfer it into their savings account and they can genuinely rely on Wonder trust that the process has actually been completed and how many you think you’ve processed given that you started this we have to do with 35 000 of these for
about 6 billion dollars wow so clearly they understand what they’re doing and that’s what you require you need experts 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 really important today the staff member retention credit which most of you have never ever become aware of I definitely hadn’t become aware of it till extremely just recently and learned a lot about it because this is most likely the most affordable cost of capital for any small business 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 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 say provide me a loan it doesn’t 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’ve become yes the Ambassador and paid spokesperson for this I love this program it’s disappearing very soon you got to find out everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply begin there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act offered services 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everyone 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 all right go on sorry I just need to ensure we got that point I indicate that’s a big difference a loan versus money cash I like cash 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 beautiful tough check in the mail where you get actual money from the internal revenue service all right so let’s speak about how it works because it seems like to me if it’s a if it’s staff member retention credit that individual needed to be a worker so I’m going to make the Assumption this money is not for the owner not for individuals on the cap table not for investors it’s for staff members right you had to have actually owned a company however it’s based upon 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 eligible 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 stroll us through the six quarters so you had quarters 2 three and four of 2020 and you had quarters one two and three of 2021. okay so that’s how it’s determined you have 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 six quarters so the computation in 2020 to be specific Kevin is 50 of the staff member’s income to an optimum of 5 thousand dollars per employee 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 occur um they simply changed the rules in.
2021 versus because the mayhem of the pandemic so they wished to even get more to keep those workers 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 takes place 21 000 Max in 2021 oh that’s how you create twenty 6 thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty 6 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 have to be decreased from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would minimize the 26 000 so what we’re seeing on average Kevin is if you took PPP cash somewhere around ten thousand dollars an individual so let’s say hypothetically you owned a restaurant in New York City where I’m from and you had a hundred workers and you took PPP money you would still get a million dollar in the mail from the internal revenue service so it’s substantial certainly now the big question is why does no one know about this due to the fact that appearance when I first found out about this when I initially met Josh you understand I’ve got lots of investments in lots of business I’m a major advocate for entrepreneurship in America and make lots of many financial investments in entrepreneurs of which many suffered through the pandemic when I first found out about this I called BS I do not believe it due to the fact that I utilize 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 should have and we utilized them carefully to survive during the pandemic so when I heard about this I said nah it can’t be true however when I dug around I even contacted us to my politician pals Governor Senators they didn’t know about it I suggest that’s how you know that’s how misinformation is that there’s no info out there then a lot of people told me well you can’t get it due to the fact that you took the PPP also not real so let’s ask Josh why does no one understand about the employee retention credit you understand what’s intriguing you’re talking about the banks Kevin since in the PPP loan process 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 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 turmoil since remember in the initial cares act you could refrain from doing both programs so if you had actually done PPP you might refrain from doing ERC in the initial program and when they changed the law in 2021 the banks were not 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 truly she or he’s never done it previously do the banks do it nope the banks do not do it the payroll companies yeah a few 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 entered into this service and bottom line my firm Kevin has stayed in business since 2009 and we have actually been working with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 business so a lot of our huge huge business clients have actually dealt 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 staff member 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 up to $10,000 in incomes paid by an.
employer whose service is completely or partially suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
1. The credit is available to all employers despite size consisting of tax exempt companies. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) small.
businesses who take Small company Loans.
2. To certify, the employer needs to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s service is totally or partially suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross invoices are listed below 50% of the similar quarter in 2019. Once the.
employer’s gross invoices exceed 80% of an equivalent quarter in 2019 they no longer qualify.
after completion of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the qualifying wages paid up to $10,000 in overall.
It is effective for salaries paid after March 13th and prior to December 31, 2020.
The meaning of qualifying salaries varies by whether a company had, on average, more or less than.
100 staff members in 2019.
Companies that concentrate on ERC filing help usually supply knowledge and support to help companies navigate the complex procedure of declaring the credit. They can offer numerous services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Income Tax Reporting
Eligibility Evaluation: These business will examine your service’s eligibility for the ERC based upon factors such as your market, earnings, and operations. If you meet the requirements for the credit and determine the optimum credit amount you can declare, they can assist figure out.
Documents and Calculation: ERC filing services will assist in gathering the required documentation, such as payroll records and financial declarations, to support your claim. They will also assist determine the credit quantity based upon qualified incomes and other qualifying expenditures.
Retroactive Claim Review: If you are qualified to declare the ERC for previous quarters, these companies can evaluate your previous payroll records and financials to identify potential opportunities for retroactive credits. They can help you change previous income tax return to claim these refunds.
Filing Support: Companies focusing on ERC filings will prepare and send the necessary types and documentation in your place. This consists of completing Kind 941 or any other necessary tax return.
Compliance and Updates: ERC guidelines and guidance have progressed with time. These business stay upgraded with the most recent modifications and make sure that your filings abide by the most present standards. They can likewise offer continuous assistance if the IRS demands extra details or performs an audit related to your ERC claim.
It is necessary to research and veterinarian any company using ERC filing help to guarantee their credibility and competence. Look for recognized companies with experience in tax and payroll services, or think about connecting to trusted accounting companies or tax experts who offer ERC filing assistance.
Bear in mind that while these companies can offer important help, it’s always a good idea to have a fundamental understanding of the ERC requirements and process yourself. This will assist you make informed choices and guarantee precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief measures. The goal of the ERC is to motivate companies to keep 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 offered to eligible companies, including for-profit companies, tax-exempt organizations, and specific governmental entities. To certify, companies must fulfill one of two criteria:.
Business operations were fully or partially suspended due to a government order related to COVID-19.
Business experienced a substantial decrease in gross receipts. As pointed out earlier, for 2021, a significant decrease is specified as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a substantial 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 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 (up to 70%) of qualified wages paid to staff members, consisting of specific health plan 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: At first, businesses that got an Income Protection Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 enables services to claim the ERC even if they got a PPP loan. The exact same incomes can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and improved, permitting eligible companies to declare the credit for certified salaries paid as far back as March 13, 2020. This retroactive arrangement supplies an opportunity for companies to change prior-year tax returns and receive refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their work tax returns, typically Type 941. The excess can be reimbursed to the employer if the credit goes beyond the amount of work taxes owed.
It is essential to note that the ERC arrangements and eligibility requirements have actually progressed with time. The best strategy is to talk to a tax expert or check out the main internal revenue service site for the most comprehensive and up-to-date details regarding the ERC, consisting of any current legal changes or updates.
To receive the ERC, an organization must fulfill one of the following criteria:.
The business operations were totally or partly suspended due to a government order related to COVID-19.
The business experienced a substantial decrease in gross receipts. For 2021, a significant decrease is specified as a 20% decline in gross invoices compared to the very 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 receipts compared to the instantly preceding quarter.
The ERC is readily available to businesses of all sizes, including tax-exempt companies, but there are some exceptions. For example, federal government entities and companies that got a PPP loan may have limitations on declaring the credit.
The procedure for declaring the ERC includes finishing the essential forms and consisting of the credit on your employment tax return (typically Form 941). The exact time it requires to process the credit can differ based on several aspects, consisting of the complexity of your company and the workload of the IRS. It’s advised to speak with a tax expert for guidance particular to your scenario.
There are several companies that can aid with the process of declaring the ERC. These consist of accounting companies, tax advisory services, and payroll company. Some well-known business that offer support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research and contact these companies directly to inquire about their charges and services.
Please keep in mind that the details provided here is based on general understanding and may not show the most recent updates or changes to the ERC. It is necessary to speak with a tax expert or visit the official IRS site for the most precise and updated information relating to eligibility, claiming treatments, and available assistance.
Less than 100. The credit is based if the employer had 100 or fewer employees on average in 2019.
on salaries paid to all workers whether they in fact worked or not. In other words, even if the.
employees worked full time and made money for full-time work, the employer still gets the credit.
Greater than 100. The credit is if the company had more than 100 workers on average in 2019.
allowed just for earnings paid to employees who did not work during the calendar quarter.
In both cases, “wages” includes not just money payments but likewise a part of the expense of employer.
offered health care. Employee Retention Credit Income Tax Reporting
Companies can be instantly reimbursed for the credit by decreasing the amount of payroll taxes they.