Lets talk first about Employee Retention Credit Paycheck Protection Program :
Our team here what do these men doing everyone in this space is helping teach people about ERC and uh always provide a stunning breakfast and have people actually discover the program we should head to the space where we have the ability 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 hundreds of countless dollars literally Kevin hundreds of countless dollars so these are replicate copies of the letters that go to customers confirming that the check is on the method I indicate you understand if you simply start to take a 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 indicate it’s simply I imply think of the number of 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 confirmed and the check is on the mail in the mail from the IRS heading to the customer so that’s how you have the ability to track it you know when you
receive this you understand the check is gone for sure which’s when they pay so they don’t pay anything up until they in fact receive the money they don’t pay bottom line Wonder trust anything till this letter is verified the check is on the way they transfer it into their checking account and they can really trust Wonder trust that the procedure has actually been finished and how many you think you have actually processed since you began this we’re about 35 000 of these for
about six billion dollars wow so plainly they know what they’re doing which’s what you require you need specialists 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 Terrific here you’re at my YouTube channel we’re discussing something actually essential today the staff member retention credit which the majority of you have actually never ever become aware of I certainly had not heard of it up until really just recently and learned a lot about it since this is probably the lowest expense of capital for any small business anywhere
anytime if you have staff members between five and five hundred so I’ve got the professional with me this is Josh Fox he’s the creator and CEO of bottom line Concepts they’re the largest processor of these ERC credits this is a 170 page program so it’s challenging this isn’t like PPP we just phone your bank manager and state 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 spokesperson for this I enjoy this program it’s disappearing 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 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 huge difference right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the cash money payroll tax refund all right go on sorry I simply have to ensure we got that point I suggest that’s a big distinction a loan versus money money I like cash cash that’s what we’re discussing 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 cash from the internal revenue service all right so let’s talk about how it works because it seems like to me if it’s a if it’s employee retention credit that person needed to be a staff member 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 workers right you had to have actually owned a business but it’s based on you having W-2 staff members in America not 10.99. so as long as you had W-2 employees and you paid federal payroll taxes that’s why you would be qualified so you need to be on payroll in 2020 on the W-2 and you have to be on payroll for the first six months of 2021 on the W-2 appropriate so there were 6 quarters the program was open well walk us through the six quarters so you had quarters 2 3 and 4 of 2020 and you had quarters one two and 3 of 2021. okay so that’s how it’s determined you need to be on the W-2 during that period 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 calculation in 2020 to be precise Kevin is 50 of the staff member’s wage to an optimum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the employee’s income to an optimum of 7 thousand per quarter how did that take place um they just altered the rules in.
2021 versus because the chaos 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 approximately five thousand Max and then what takes place 21 000 Max in 2021 oh that’s how you create twenty six 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 great deal of cash it is now there’s a caution 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 2 you would lower the 26 000 so what we’re seeing usually Kevin is if you took PPP money somewhere around ten thousand dollars a person so let’s state hypothetically you owned a dining establishment in New york city 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 obviously now the huge concern is why does nobody learn about this since look when I initially found out about this when I first met Josh you understand I’ve got lots of financial investments in great deals of companies I’m a major advocate for entrepreneurship in America and make lots of many investments in entrepreneurs of which lots of suffered through the pandemic when I initially heard about this I called BS I don’t think it since I utilize the PPP we went through the money center Banks to get it it was really easy to do we had our CEOs call the banks they got their loans which were well been worthy of and we utilized them sensibly to stay alive throughout the pandemic so when I became aware of this I stated nah it can’t be true but when I dug around I even contacted us to my politician good friends Guv Senators they didn’t learn about it I suggest that’s how you understand that’s how false information is that there’s no info out there then a bunch of people informed me well you can’t get it because you took the PPP likewise not real so let’s ask Josh why does no one understand about the worker retention credit you understand what’s intriguing you’re discussing the banks Kevin since in the PPP loan procedure the federal government made it really clear that if you wanted a PPP loan you would call Wells Fargo Citibank Bank of America any of the huge 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 because keep in mind in the initial cares act you might not do both programs so if you had actually done PPP you could refrain from doing ERC in the initial 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 government never made it clear to any person about how to.
do this does your CFO know how to do this not really he or she’s never ever 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 company your accounting professional no your accountant’s never done this prior to unless you have an account that went into this organization and bottom line my firm Kevin has actually stayed in business considering that 2009 and we’ve been working with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 companies so a great deal of our big big corporate customers have worked with bottom line to recuperate other government programs we have actually done sales tax and use tax unemployment tax work chance tax credits research and development tax credits unclaimed home real estate tax all of these other government programs.
The staff member retention tax credit is a broad based refundable tax credit created to encourage.
employers to keep workers on their payroll. The credit is 50% of up to $10,000 in salaries paid by an.
company whose company is totally or partially suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is readily available to all companies regardless of size including tax exempt companies. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) small.
services 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 organization is totally or partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the company’s gross receipts are listed below 50% of the similar quarter in 2019. When the.
employer’s gross receipts go above 80% of an equivalent quarter in 2019 they no longer qualify.
after the end of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the certifying wages paid up to $10,000 in total.
It works for earnings paid after March 13th and prior to December 31, 2020.
The definition of qualifying earnings varies by whether an employer had, on average, basically than.
100 staff members in 2019.
Companies that concentrate on ERC filing support typically offer knowledge and support to help businesses navigate the complicated procedure of declaring the credit. They can offer various services, including:.
How is the employee retention credit calculated? Employee Retention Credit Paycheck Protection Program
Eligibility Assessment: These business will assess your organization’s eligibility for the ERC based upon aspects such as your industry, income, and operations. They can help identify if you satisfy the requirements for the credit and recognize the optimum credit amount you can declare.
Paperwork and Estimation: ERC filing services will help in gathering the required paperwork, such as payroll records and monetary statements, to support your claim. They will also assist determine the credit amount based on qualified salaries and other qualifying costs.
Retroactive Claim Evaluation: If you are eligible to claim the ERC for previous quarters, these business can review your previous payroll records and financials to determine prospective chances for retroactive credits. They can help you amend previous income tax return to claim these refunds.
Filing Help: Companies specializing in ERC filings will prepare and send the required forms and documentation in your place. This includes completing Kind 941 or any other necessary tax forms.
Compliance and Updates: ERC policies and assistance have actually developed over time. These companies remain upgraded with the latest changes and ensure that your filings adhere to the most present standards. If the IRS demands additional info or carries out an audit associated to your ERC claim, they can likewise provide continuous support.
It is essential to research and veterinarian any company offering ERC filing help to guarantee their reliability and knowledge. Try to find recognized companies with experience in tax and payroll services, or think about connecting to relied on accounting companies or tax specialists who use ERC submitting assistance.
Remember that while these companies can supply important assistance, it’s constantly a good concept to have a basic understanding of the ERC requirements and process yourself. This will help you make informed choices and guarantee accurate filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief steps. The objective of the ERC is to encourage companies to retain 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 employers, including for-profit businesses, tax-exempt companies, and specific governmental entities. To certify, employers must fulfill one of two requirements:.
Business operations were totally or partially suspended due to a federal government order related to COVID-19.
Business experienced a significant decline in gross invoices. As mentioned previously, for 2021, a significant decline is specified as a 20% decrease in gross invoices compared to the exact 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 right away preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity is equal to a portion (approximately 70%) of certified incomes paid to employees, consisting of certain health insurance expenditures. The maximum credit per employee 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 Defense Program (PPP) loan were not eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 permits businesses to declare the ERC even if they got a PPP loan. The very same salaries can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively broadened and enhanced, permitting qualified companies to declare the credit for qualified wages paid as far back as March 13, 2020. This retroactive provision offers an opportunity for businesses to change prior-year tax returns and receive refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their employment income tax return, normally Kind 941. If the credit goes beyond the quantity of work taxes owed, the excess can be reimbursed to the employer.
It is essential to note that the ERC provisions and eligibility criteria have evolved with time. The very best course of action is to speak with a tax professional or go to the main internal revenue service website for the most detailed and up-to-date info relating to the ERC, including any recent legislative changes or updates.
To qualify for the ERC, an organization needs to meet one of the following criteria:.
The business operations were completely or partly suspended due to a federal government order related to COVID-19.
The business experienced a considerable 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 substantial decline 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 available to companies of all sizes, consisting of tax-exempt companies, but there are some exceptions. Government entities and services that received a PPP loan may have limitations on claiming the credit.
The process for declaring the ERC involves finishing the required forms and including the credit on your work tax return (usually Kind 941). The exact time it takes to process the credit can vary based upon a number of elements, including the intricacy of your business and the workload of the internal revenue service. It’s recommended to consult with a tax professional for guidance particular to your situation.
There are a number of companies that can assist with the process of declaring the ERC. These consist of accounting firms, tax advisory services, and payroll service providers. Some widely known business that offer support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research and contact these companies directly to inquire about their costs and services.
Please keep in mind that the details provided here is based upon general understanding and might not show the most current updates or changes to the ERC. It is very important to seek advice from a tax professional or check out the main internal revenue service website for the most accurate and up-to-date details relating to eligibility, claiming procedures, and available support.
Less than 100. If the company had 100 or fewer workers typically in 2019, then the credit is based.
on wages paid to all workers whether they actually worked or not. To put it simply, 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 staff members on average in 2019.
permitted only for salaries paid to employees who did not work during the calendar quarter.
In both cases, “incomes” includes not just money payments but also a portion of the expense of employer.
provided healthcare. Employee Retention Credit Paycheck Protection Program
Companies can be right away compensated for the credit by reducing the amount of payroll taxes they.