Lets talk first about Employee Retention Credit Receivable On Financial Statements :
Our group here what do these guys doing everyone in this room is helping teach individuals about ERC and uh constantly provide a gorgeous breakfast and have people really learn about the program we need to head to the space where we have the ability to display some of the checks that we are getting for business and I want to see that what is this this is uh hundreds of countless dollars actually Kevin hundreds of countless dollars so these are replicate copies of the letters that go to clients verifying that the check is on the way I suggest you understand if you simply begin to take a look at some of these here I mean this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I mean it’s just I imply consider 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 verified the numbers are confirmed and the check is on the mail in the mail from the IRS heading to the client so that’s how you have the ability to track it you understand when you
get this you know the check is chosen sure which’s when they pay so they do not pay anything until they in fact receive the cash they do not pay bottom line Wonder trust anything till this letter is confirmed the check is on the method they deposit it into their savings account and they can truly trust Wonder trust that the procedure has been ended up and how many you think you have actually processed considering that you began this we’re about 35 000 of these for
about six billion dollars wow so clearly they understand what they’re doing and that’s what you need you require 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 Terrific here you’re at my YouTube channel we’re talking about something actually crucial today the worker retention credit which the majority of you have actually never ever become aware of I certainly hadn’t heard of it until really recently and found out a lot about it because this is probably the most affordable cost of capital for any small business anywhere
anytime if you have workers in between five and five hundred so I have actually got the professional 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 simply call up your bank supervisor and state offer me a loan it does not 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 representative for this I enjoy this program it’s disappearing very soon you got to learn all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just begin there so during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act provided businesses three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everybody it makes a huge distinction right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
fix the cash cash payroll tax refund fine go on sorry I just have to ensure we got that point I imply that’s a huge distinction a loan versus cash money I like money money that’s what we’re speaking about 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 real cash from the IRS all right so let’s speak about how it works since it seems like to me if it’s a if it’s worker retention credit that individual had to be an employee so I’m going to make the Presumption this cash is not for the owner not for individuals on the cap table not for shareholders it’s for employees right you needed to have owned a business however 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 need to be on payroll for the very first 6 months of 2021 on the W-2 proper so there were six quarters the program was open well stroll us through the 6 quarters so you had quarters two 3 and four of 2020 and you had quarters one 2 and three of 2021. all right so that’s how it’s determined you have to be on the W-2 throughout that duration now let’s talk my preferred part cash just how much can you return per worker that was on a W-2 in those six quarters so the computation 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 wage to an optimum of seven thousand per quarter how did that take place um they just altered the rules in.
2021 versus due to the fact that the chaos of the pandemic so they wanted 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 takes place 21 000 Max in 2021 oh that’s how you come up with twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty 6 thousand dollars per employee that is because that’s a lot of cash it is now there’s a caveat here the PPP money would have 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 money somewhere around ten thousand dollars a person so let’s state 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 clearly now the huge question is why does nobody understand about this due to the fact that look when I first found out about this when I initially met Josh you understand I’ve got lots of financial investments in great deals of business I’m a major advocate for entrepreneurship in America and make lots of lots of financial investments in business owners of which lots of suffered through the pandemic when I first became aware of this I called BS I don’t think it due to the fact that I use the PPP we went through the cash 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 deserved and we utilized them carefully to survive during the pandemic so when I heard about this I said nah it can’t hold true but when I dug around I even contacted us to my political leader good friends Governor Senators they didn’t understand about it I imply that’s how you understand that’s how false information is that there’s no info out there then a bunch of people told me well you can’t get it due to the fact that you took the PPP likewise not true so let’s ask Josh why does nobody learn about the worker retention credit you know what’s fascinating you’re speaking about the banks Kevin because 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 procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply process process that’s all um and here there was mayhem since 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 altered the law in 2021 the banks were not doing ERC since it’s not alone so you’re getting a tax refund so the government never made it clear to anybody about how to.
do this does your CFO know how to do this not really she or he’s never ever done it previously 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 accountant no your accountant’s never ever done this before unless you have an account that entered into this company and bottom line my firm Kevin has actually been in business given that 2009 and we have actually been working with the federal government and the state federal government to recuperate money for Fortune 500 Fortune 1000 companies so a lot of our big huge corporate customers have actually dealt with bottom line to recover other government programs we have actually done sales tax and utilize tax unemployment tax work chance 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 developed to encourage.
companies to keep staff members on their payroll. The credit is 50% of as much as $10,000 in wages paid by an.
company whose company is totally or partly suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is available to all companies no matter size consisting of tax exempt companies. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) small.
organizations who take Small company Loans.
2. To qualify, the company has to satisfy one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s organization is fully or partly suspended by government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the comparable quarter in 2019. When the.
employer’s gross invoices go above 80% of an equivalent quarter in 2019 they no longer qualify.
after the end of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the qualifying earnings paid up to $10,000 in total.
It works for salaries paid after March 13th and before December 31, 2020.
The definition of qualifying wages varies by whether an employer had, typically, more or less than.
100 staff members in 2019.
Business that specialize in ERC filing assistance usually offer expertise and assistance to help companies browse the complex process of declaring the credit. They can use different services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Receivable On Financial Statements
Eligibility Assessment: These business will examine your company’s eligibility for the ERC based upon factors such as your industry, revenue, and operations. They can help determine if you fulfill the requirements for the credit and identify the maximum credit quantity you can claim.
Documentation and Estimation: ERC filing services will assist in collecting the required documentation, such as payroll records and monetary declarations, to support your claim. They will likewise help determine the credit amount based on eligible wages and other certifying costs.
Retroactive Claim Review: If you are qualified to declare the ERC for prior quarters, these business can review your past payroll records and financials to identify potential chances for retroactive credits. They can help you modify previous income tax return to declare these refunds.
Filing Assistance: Business concentrating on ERC filings will prepare and send the needed kinds and documents on your behalf. This consists of completing Type 941 or any other required tax forms.
Compliance and Updates: ERC guidelines and guidance have actually developed in time. These business remain updated with the latest changes and guarantee that your filings adhere to the most existing standards. If the IRS demands additional information or performs an audit associated to your ERC claim, they can likewise supply continuous support.
It is essential to research study and veterinarian any company offering ERC filing support to ensure their reliability and knowledge. Look for established companies with experience in tax and payroll services, or think about reaching out to trusted accounting firms or tax experts who provide ERC filing assistance.
Keep in mind that while these companies can provide valuable support, it’s always an excellent concept to have a fundamental understanding of the ERC requirements and procedure yourself. This will assist you make notified decisions and ensure precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief procedures. The goal of the ERC is to encourage organizations to keep 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 offered to qualified employers, including for-profit companies, tax-exempt organizations, and certain governmental entities. To certify, employers must fulfill one of two requirements:.
Business operations were totally or partly suspended due to a government order related to COVID-19.
Business experienced a considerable decline in gross receipts. As discussed previously, for 2021, a significant decline is specified as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decline is specified 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.
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 percentage (approximately 70%) of certified incomes paid to employees, including certain health plan expenses. The maximum credit per staff member is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, services that received a Paycheck Protection Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 allows organizations 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 Arrangement: The ERC has been retroactively broadened and improved, permitting qualified companies to claim the credit for certified salaries paid as far back as March 13, 2020. This retroactive provision offers a chance for services to amend prior-year tax returns and receive refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their work tax returns, normally Kind 941. If the credit goes beyond the quantity of work taxes owed, the excess can be refunded to the employer.
It is essential to keep in mind that the ERC arrangements and eligibility criteria have progressed in time. The very best strategy is to speak with a tax expert or go to the main IRS website for the most in-depth and up-to-date details regarding the ERC, consisting of any current legal changes or updates.
To receive the ERC, a company needs to meet among the following criteria:.
The business operations were completely or partly suspended due to a government order related to COVID-19.
The business experienced a considerable decrease in gross receipts. For 2021, a considerable decrease is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019, or a 20% decline in gross receipts compared to the right away preceding quarter.
The ERC is available to companies of all sizes, consisting of tax-exempt companies, however there are some exceptions. For instance, government entities and organizations that received a PPP loan may have limitations on declaring the credit.
The procedure for declaring the ERC involves finishing the essential types and consisting of the credit on your employment income tax return (usually Form 941). The exact time it takes to process the credit can vary based on a number of elements, consisting of the intricacy of your business and the workload of the internal revenue service. It’s suggested to seek advice from a tax expert for guidance particular to your circumstance.
There are several companies that can help with the process of claiming the ERC. Some widely known companies that use support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the details offered here is based on general understanding and might not show the most recent updates or modifications to the ERC. It is necessary to consult with a tax expert or visit the main IRS website for the most current and accurate information regarding eligibility, declaring treatments, and readily available support.
Less than 100. The credit is based if the employer had 100 or fewer workers on average in 2019.
on wages paid to all employees whether they in fact worked or not. In other words, even if the.
staff members worked full-time and made money for full-time work, the company still gets the credit.
Greater than 100. If the employer had more than 100 workers on average in 2019, then the credit is.
permitted only for wages paid to staff members who did not work during the calendar quarter.
In both cases, “incomes” consists of not just money payments but also a part of the expense of employer.
supplied health care. Employee Retention Credit Receivable On Financial Statements
Companies can be immediately repaid for the credit by lowering the quantity of payroll taxes they.