Lets talk first about Employee Retention Credit New Law :
Our group here what do these men doing everybody in this room is assisting teach people about ERC and uh always offer a beautiful breakfast and have people really learn about the program we ought to head to the space where we have the ability to show a few of the checks that we are getting for companies and I want to see that what is this this is uh numerous millions of dollars actually Kevin hundreds of countless dollars so these are replicate copies of the letters that go to customers verifying that the check is on the way I mean you understand if you simply begin to look at some 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 imply think of the number of 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 confirmed and the check is on the mail in the mail from the internal revenue service heading to the customer so that’s how you have the ability to track it you know when you
get this you understand the check is opted for sure and that’s when they pay so they don’t pay anything till they in fact get the cash they do not pay bottom line Wonder trust anything up until this letter is verified the check is on the way they deposit it into their bank account and they can truly trust Wonder trust that the process has been ended up and how many you believe you’ve processed because you began this we’re about 35 000 of these for
about six billion dollars wow so clearly they know what they’re doing and that’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 actually crucial today the employee retention credit which the majority of you have actually never ever heard of I definitely hadn’t heard of it up until extremely recently and discovered a lot about it due to the fact that this is probably the most affordable cost of capital for any small business anywhere
anytime if you have employees 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 Ideas they’re the biggest processor of these ERC credits this is a 170 page program so it’s challenging this isn’t like PPP we just contact your bank supervisor and say provide me a loan it does not work there’s not a loan it’s an application and Josh is going to inform us all about it and how to get it and why I’ve ended up being yes the Ambassador and paid representative for this I love this program it’s going away soon you got to find out everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just begin there so throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act provided organizations three chances 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 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
remedy the cash cash payroll tax refund okay go on sorry I just have to ensure we got that point I mean that’s a big distinction a loan versus money money I like cash cash that’s what we’re discussing 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 lovely difficult check in the mail where you get real cash from the IRS all right so let’s discuss 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 an employee so I’m going to make the Assumption this cash is not for the owner not for people on the cap table not for shareholders it’s for employees right you needed to have actually owned an organization 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 qualified so you have to be on payroll in 2020 on the W-2 and you have to be on payroll for the first 6 months of 2021 on the W-2 right so there were 6 quarters the program was open well stroll us through the six quarters so you had quarters 2 three and 4 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 period now let’s talk my preferred part money how much can you return per employee that was on a W-2 in those 6 quarters so the computation in 2020 to be exact Kevin is 50 of the worker’s wage to an optimum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers escalated to 70 of the worker’s income to a maximum of seven thousand per quarter how did that occur um they simply altered the rules in.
2021 versus because 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 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 employee that is since that’s a lot of cash it is now there’s a caution here the PPP money would have to be minimized from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would minimize the 26 000 so what we’re seeing typically Kevin is if you took PPP money somewhere around 10 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 employees and you took PPP money you would still get a million dollar in the mail from the IRS so it’s big certainly now the big question is why does no one know about this because look when I first found out about this when I first met Josh you know I have actually got great deals of investments in lots of business I’m a major supporter for entrepreneurship in America and make lots of numerous investments in entrepreneurs of which numerous suffered through the pandemic when I first heard about this I called BS I do not believe it because I utilize the PPP we went through the cash center Banks to get it it was really easy to do we had our CEOs call the banks they got their loans and that were well should have and we used them carefully to stay alive throughout the pandemic so when I became aware of this I said nah it can’t hold true however when I dug around I even contacted us to my political leader good friends Guv Senators they didn’t know about it I suggest that’s how you know that’s how misinformation is that there’s no information out there then a lot of people told me well you can’t get it because you took the PPP also not true so let’s ask Josh why does nobody know about the employee retention credit you know what’s fascinating you’re discussing 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 process in Canada a pre-pp loan there’s no loans in Canada by the way it’s just process process that’s all um and here there was chaos because keep in mind in the initial cares act you might refrain from doing both programs so if you had actually done PPP you could refrain from doing ERC in the original 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 anyone about how to.
do this does your CFO know how to do this not actually she or he’s never ever done it in the past 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 accounting professional’s never done this prior to unless you have an account that entered into this organization and bottom line my company Kevin has actually stayed in business given 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 companies so a lot of our big huge business clients have worked with bottom line to recover other government programs we’ve done sales tax and utilize tax joblessness tax work chance tax credits research and development tax credits unclaimed property property tax all of these other federal government programs.
The staff member retention tax credit is a broad based refundable tax credit developed to encourage.
employers to keep workers on their payroll. The credit is 50% of up to $10,000 in salaries paid by an.
Due to the fact that of COVID-19 or whose gross receipts, company whose organization is completely or partly suspended.
decrease by more than 50%.
1. The credit is readily available to all employers no matter size consisting of tax exempt organizations. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
services who take Small company Loans.
2. To qualify, the employer needs to satisfy one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s organization is fully 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. As soon as the.
company’s gross receipts go above 80% of a comparable quarter in 2019 they no longer certify.
after completion of that quarter.
Estimation of the Credit.
The quantity 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 before December 31, 2020.
The meaning of certifying salaries varies by whether a company had, on average, more or less than.
100 employees in 2019.
Business that concentrate on ERC filing help usually provide proficiency and support to assist services navigate the complex process of declaring the credit. They can provide numerous services, including:.
How is the employee retention credit calculated? Employee Retention Credit New Law
Eligibility Assessment: These companies will evaluate your organization’s eligibility for the ERC based upon factors such as your industry, profits, and operations. If you fulfill the requirements for the credit and recognize the maximum credit amount you can claim, they can help figure out.
Documentation and Calculation: ERC filing services will assist in collecting the necessary documentation, such as payroll records and financial statements, to support your claim. They will also assist compute the credit quantity based on eligible earnings and other certifying expenditures.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for prior quarters, these business can review your past payroll records and financials to recognize prospective opportunities for retroactive credits. They can help you amend previous income tax return to claim these refunds.
Filing Help: Business specializing in ERC filings will prepare and send the needed forms and paperwork on your behalf. This includes completing Kind 941 or any other required tax return.
Compliance and Updates: ERC regulations and guidance have progressed gradually. These companies remain updated with the latest changes and guarantee that your filings comply with the most current standards. They can also offer ongoing support if the internal revenue service demands extra info or carries out an audit related to your ERC claim.
It is very important to research study and vet any business providing ERC filing assistance to guarantee their reliability and know-how. Look for established companies with experience in tax and payroll services, or think about connecting to trusted accounting companies or tax specialists who offer ERC filing support.
Bear in mind that while these companies can offer important support, it’s constantly an excellent idea to have a basic understanding of the ERC requirements and procedure yourself. This will help you make notified decisions 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 procedures. The objective of the ERC is to encourage organizations to maintain and pay their employees throughout the pandemic, even if their operations have been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to eligible companies, consisting of for-profit companies, tax-exempt organizations, and particular governmental entities. To qualify, companies must satisfy one of two criteria:.
Business operations were completely or partially suspended due to a federal government order related to COVID-19.
Business experienced a substantial decline in gross receipts. As pointed out earlier, for 2021, a substantial decline is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decrease in gross invoices compared to the exact 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 quantity is equal to a percentage (up to 70%) of qualified wages paid to workers, including 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, organizations that received a Paycheck Protection Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 enables companies to declare the ERC even if they received a PPP loan. However, the same incomes can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and boosted, enabling qualified companies to claim the credit for certified earnings paid as far back as March 13, 2020. This retroactive arrangement offers an opportunity for services to amend prior-year income tax return and get refunds.
Claiming the Credit: Companies can declare the ERC by reporting it on their employment tax returns, generally Kind 941. The excess can be reimbursed to the employer if the credit exceeds the amount of work taxes owed.
It is necessary to keep in mind that the ERC provisions and eligibility requirements have actually progressed over time. The best course of action is to seek advice from a tax professional or check out the official internal revenue service site for the most up-to-date and in-depth information concerning the ERC, consisting of any recent legal changes or updates.
To get approved for the ERC, a company must satisfy one of the following requirements:.
The business operations were totally or partly suspended due to a federal government order related to COVID-19.
The business experienced a significant decrease in gross receipts. For 2021, a substantial decline is specified 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% decline in gross receipts compared to the exact same quarter in 2019, or a 20% decline in gross invoices compared to the immediately preceding quarter.
The ERC is readily available to services of all sizes, consisting of tax-exempt organizations, but there are some exceptions. Federal government entities and businesses that got a PPP loan might have restrictions on claiming the credit.
The procedure for claiming the ERC includes completing the necessary types and consisting of the credit on your work income tax return (typically Form 941). The exact time it requires to process the credit can vary based upon several elements, including the complexity of your company and the work of the internal revenue service. It’s advised to talk to a tax professional for guidance specific to your situation.
There are several companies that can aid with the procedure of claiming the ERC. These include accounting companies, tax advisory services, and payroll company. Some widely known business that use support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research and contact these business straight to ask about their services and fees.
Please keep in mind that the info supplied here is based upon general understanding and might not show the most current updates or modifications to the ERC. It is necessary to speak with a tax professional or go to the official internal revenue service website for the most accurate and updated information relating to eligibility, declaring treatments, and readily available assistance.
Less than 100. If the employer had 100 or less staff members typically in 2019, then the credit is based.
on salaries paid to all employees whether they in fact worked or not. To put it simply, even if the.
staff members worked full time and earned money for full-time work, the employer still gets the credit.
Greater than 100. The credit is if the company had more than 100 employees on average in 2019.
enabled only for earnings paid to staff members who did not work during the calendar quarter.
In both cases, “salaries” consists of not just cash payments however also a portion of the expense of company.
supplied healthcare. Employee Retention Credit New Law
Companies can be instantly reimbursed for the credit by reducing the amount of payroll taxes they.