Lets talk first about Employee Retention Credit Payroll Tax Deferral :
Our group here what do these guys doing everyone in this room is helping teach individuals about ERC and uh always supply a lovely breakfast and have people truly learn about the program we ought to head to the space where we are able to display some 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 actually Kevin numerous millions of dollars so these are replicate copies of the letters that go to clients verifying that the check is on the way I mean you know if you just 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 simply I imply consider how many real 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 internal revenue service heading to the client so that’s how you have the ability to track it you know when you
receive this you know the check is gone for sure which’s when they pay so they don’t pay anything until they in fact get the cash they don’t pay bottom line Wonder trust anything up until this letter is confirmed the check is on the way they deposit it into their savings account and they can really trust Wonder trust that the process has been ended up and the number of you believe you’ve processed given that you started this we have to do with 35 000 of these for
about 6 billion dollars wow so plainly they understand what they’re doing which’s what you require you require experts 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 Wonderful 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 become aware of it until really recently and learned a lot about it due to the fact that this is most likely the most affordable expense of capital for any small business anywhere
anytime if you have employees in between five and five hundred so I’ve got the expert with me this is Josh Fox he’s the creator and CEO of bottom line Ideas 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 just call up your bank supervisor and state give 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 ended up being yes the Ambassador and paid spokesperson for this I enjoy this program it’s going away soon you got to learn all about it let’s talk worker retention credit Josh Fox what is an ERC let’s just start there so during the Trump Administration when President Trump was enacted they created the cares Act and the cares act provided companies three chances 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 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the cash money payroll tax refund fine go on sorry I just need to ensure we got that point I suggest that’s a big difference a loan versus cash 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 beautiful tough check in the mail where you get actual money from the IRS all right so let’s talk about how it works due to the fact that it seems like to me if it’s a if it’s staff member 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 investors it’s for staff members right you had to have owned a business but it’s based on you having W-2 employees in America not 10.99. As long as you had W-2 staff members 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 six months of 2021 on the W-2 right so there were 6 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. alright so that’s how it’s measured you need to be on the W-2 during that period now let’s talk my preferred part money how much can you get back per worker that was on a W-2 in those 6 quarters so the computation in 2020 to be precise Kevin is 50 of the worker’s salary to a maximum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s income to an optimum of seven thousand per quarter how did that take place um they simply changed the rules in.
2021 versus due to the fact that the turmoil 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 approximately five thousand Max and then what occurs 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 lot of money it is now there’s a caveat here the PPP cash would need to be decreased from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would lower the 26 000 so what we’re seeing usually Kevin is if you took PPP cash somewhere around 10 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 staff members and you took PPP cash 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 first heard about this when I initially satisfied Josh you know I’ve got lots of investments in lots of companies I’m a major supporter for entrepreneurship in America and make lots of many financial investments in entrepreneurs of which lots of suffered through the pandemic when I first heard about this I called BS I do not think it because I use 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 which were well should have and we used them carefully to survive throughout the pandemic so when I heard about this I stated nah it can’t hold true but when I dug around I even contacted us to my politician good friends Guv Senators they didn’t know about it I indicate that’s how you understand that’s how misinformation is that there’s no info out there then a lot of people informed me well you can’t get it because you took the PPP also not real so let’s ask Josh why does no one understand about the worker retention credit you understand what’s interesting you’re talking about the banks Kevin due to the fact that in the PPP loan process 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 process in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply procedure process that’s all um and here there was chaos due to the fact that keep in mind in the initial cares act you could refrain from doing both programs so if you had actually done PPP you could not do ERC in the original program and when they altered 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 made it clear to anybody 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 don’t do it the payroll business yeah some of them are doing it as a payroll business your accountant 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 company Kevin has actually been in business because 2009 and we’ve been working with the federal government and the state federal government to recover cash for Fortune 500 Fortune 1000 business so a lot of our huge big business clients have actually worked with bottom line to recuperate other government programs we have actually done sales tax and use tax joblessness tax work chance tax credits research and development tax credits unclaimed home property tax all of these other government programs.
The worker retention tax credit is a broad based refundable tax credit designed to motivate.
companies to keep staff members on their payroll. The credit is 50% of as much as $10,000 in wages paid by an.
Because of COVID-19 or whose gross receipts, employer whose service is fully or partly suspended.
decline by more than 50%.
1. The credit is readily available to all companies no matter size including tax exempt organizations. There are.
just 2 exceptions: (1) state and city governments and their instrumentalities and (2) little.
businesses who take Small Business Loans.
2. To certify, the company has to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s organization is totally or partially suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross receipts are below 50% of the similar quarter in 2019. When the.
company’s gross invoices exceed 80% of a similar quarter in 2019 they no longer certify.
after the end of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the qualifying earnings paid up to $10,000 in overall.
It works for salaries paid after March 13th and before December 31, 2020.
The meaning of qualifying earnings varies by whether an employer had, on average, basically than.
100 workers in 2019.
Business that specialize in ERC filing help normally supply knowledge and support to help organizations browse the complex procedure of declaring the credit. They can provide various services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Payroll Tax Deferral
Eligibility Assessment: These business will assess your organization’s eligibility for the ERC based on factors such as your market, profits, and operations. They can assist identify if you meet the requirements for the credit and identify the optimum credit amount you can declare.
Paperwork and Computation: ERC filing services will help in gathering the necessary documentation, such as payroll records and financial statements, to support your claim. They will also help determine the credit quantity based on eligible incomes and other qualifying expenses.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for previous quarters, these companies can examine your past payroll records and financials to determine possible opportunities for retroactive credits. They can help you amend previous income tax return to claim these refunds.
Filing Help: Companies focusing on ERC filings will prepare and send the essential forms and paperwork in your place. This includes completing Type 941 or any other required tax return.
Compliance and Updates: ERC regulations and guidance have actually developed with time. These companies remain upgraded with the most recent changes and ensure that your filings adhere to the most current standards. They can likewise supply continuous assistance if the IRS requests additional information or carries out an audit related to your ERC claim.
It is very important to research and vet any business providing ERC filing support to guarantee their reliability and competence. Search for recognized firms with experience in tax and payroll services, or consider connecting to relied on accounting firms or tax experts who provide ERC submitting assistance.
Remember that while these business can provide important support, it’s constantly a great idea to have a basic understanding of the ERC requirements and process yourself. This will assist you make informed decisions and guarantee accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief steps. The objective of the ERC is to encourage services to maintain and pay their staff members throughout the pandemic, even if their operations have actually been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to eligible employers, consisting of for-profit services, tax-exempt organizations, and certain governmental entities. To qualify, employers must satisfy one of two criteria:.
Business operations were totally or partially suspended due to a federal government order related to COVID-19.
Business experienced a considerable decrease in gross receipts. As mentioned previously, for 2021, a substantial decline is specified as a 20% decline in gross receipts 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 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 quantity amounts to a portion (up to 70%) of qualified incomes paid to workers, including certain health plan expenses. The optimum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, companies that got a Paycheck Defense Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 permits businesses to claim the ERC even if they got a PPP loan. However, the same salaries can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively broadened and enhanced, permitting qualified companies to claim the credit for qualified wages paid as far back as March 13, 2020. This retroactive arrangement provides a chance for companies to modify prior-year tax returns and receive refunds.
Claiming the Credit: Companies can declare the ERC by reporting it on their work tax returns, usually Kind 941. If the credit goes beyond the quantity of work taxes owed, the excess can be refunded to the employer.
It is necessary to keep in mind that the ERC provisions and eligibility requirements have evolved gradually. The very best strategy is to talk to a tax professional or go to the main IRS website for the most up-to-date and in-depth information regarding the ERC, consisting of any recent legislative changes or updates.
To receive the ERC, an organization must fulfill one of the following criteria:.
The business operations were completely or partly suspended due to a government order related to COVID-19.
The business experienced a significant decrease in gross invoices. For 2021, a substantial decline is defined as a 20% decrease 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 invoices compared to the right away preceding quarter.
The ERC is offered to organizations of all sizes, including tax-exempt companies, however there are some exceptions. Federal government entities and services that got a PPP loan might have constraints on claiming the credit.
The process for claiming the ERC includes finishing the necessary types and consisting of the credit on your employment income tax return (normally Form 941). The exact time it takes to process the credit can differ based on numerous factors, consisting of the intricacy of your service and the workload of the internal revenue service. It’s advised to speak with a tax professional for guidance specific to your scenario.
There are several business that can assist with the procedure of declaring the ERC. Some widely known business that provide assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the info supplied here is based on general understanding and may not show the most recent updates or changes to the ERC. It is necessary to consult with a tax expert or check out the main IRS website for the most up-to-date and precise information regarding eligibility, declaring treatments, and available assistance.
Less than 100. The credit is based if the employer had 100 or fewer staff members on average in 2019.
on earnings paid to all workers whether they in fact worked or not. Simply put, even if the.
workers worked full time and got paid 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.
allowed only for wages paid to staff members who did not work during the calendar quarter.
In both cases, “wages” consists of not just money payments however also a portion of the expense of employer.
provided healthcare. Employee Retention Credit Payroll Tax Deferral
Employers can be immediately compensated for the credit by decreasing the quantity of payroll taxes they.