Lets talk first about Employee Retention Credit Significant Decline In Gross Receipts :
Our team here what do these men doing everybody in this room is assisting teach individuals about ERC and uh always offer a gorgeous breakfast and have individuals actually discover the program we must head to the space where we have the ability to display some of the checks that we are getting for business and I ‘d like to see that what is this this is uh hundreds of millions of dollars literally Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to clients confirming that the check is on the method I imply you understand if you simply begin to 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 suggest it’s just I indicate think of the number of real clients that went through the program yeah this is the very end this is the celebration at the end when the check is confirmed the numbers are confirmed and the check is on the mail in the mail from the internal revenue service heading to the consumer so that’s how you have the ability to track it you know when you
receive this you know the check is chosen sure and that’s when they pay so they don’t pay anything until 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 method they transfer it into their savings account and they can really trust Wonder trust that the procedure has actually been completed and how many you think you have actually processed considering that you started this we’re about 35 000 of these for
about 6 billion dollars wow so clearly they know what they’re doing and that’s what you need 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 actually important today the employee retention credit which most of you have actually never ever become aware of I definitely hadn’t become aware of it till extremely just recently and learned a lot about it due to the fact that this is probably the most affordable expense of capital for any small business anywhere
anytime if you have staff members in between 5 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 Principles they’re the biggest processor of these ERC credits this is a 170 page program so it’s difficult this isn’t like PPP we simply phone your bank manager and state provide me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to tell all of us about it and how to get it and why I’ve become yes the Ambassador and paid spokesperson for this I enjoy this program it’s disappearing very soon you got to learn all about it let’s talk worker retention credit Josh Fox what is an ERC let’s simply start there so throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act used businesses 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everyone 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.
remedy the money cash payroll tax refund all right go on sorry I just need to ensure we got that point I indicate that’s a huge distinction a loan versus money cash I like money money that’s what we’re talking 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 initial cares Act is the ERC and yes Kevin it is a beautiful difficult check in the mail where you get actual money from the internal revenue service all right so let’s talk about how it works since it seems like to me if it’s a if it’s worker 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 individuals on the cap table not for investors it’s for employees right you had to have owned a service however it’s based on you having W-2 workers 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 six quarters the program was open well stroll us through the 6 quarters so you had quarters two three and four of 2020 and you had quarters one two and 3 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 cash how much can you get back per employee that was on a W-2 in those six quarters so the calculation in 2020 to be exact Kevin is 50 of the staff member’s income to a maximum of 5 thousand dollars per staff member 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 just 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 5 thousand Max and after that what occurs 21 000 Max in 2021 oh that’s how you create twenty 6 thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty 6 thousand dollars per worker that is because that’s a great deal of cash it is now there’s a caution here the PPP cash would need to be reduced from the twenty 6 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 someplace around 10 thousand dollars a person so let’s say hypothetically you owned a dining establishment in New York City where I’m from and you had a hundred workers and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s substantial obviously now the huge concern is why does no one learn about this because look when I first heard about this when I initially satisfied Josh you know I have actually got lots of financial investments in lots of business I’m a major advocate for entrepreneurship in America and make numerous numerous 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 and that were well been worthy of and we used them carefully to survive throughout the pandemic so when I became aware of this I stated nah it can’t hold true however when I dug around I even called to my politician buddies Guv Senators they didn’t learn about it I mean that’s how you understand that’s how misinformation is that there’s no information out there then a lot of individuals told me well you can’t get it since you took the PPP likewise not real so let’s ask Josh why does nobody learn about the employee retention credit you know what’s fascinating you’re discussing the banks Kevin due to the fact that in the PPP loan process the federal government made it very clear that if you desired 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 process procedure that’s all um and here there was turmoil because keep in mind in the original 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 altered the law in 2021 the banks were not doing ERC due to the fact that 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 understand how to do this not truly she or he’s never ever done it in the past do the banks do it nope the banks don’t do it the payroll companies yeah a few of them are doing it as a payroll company your accountant no your accountant’s never ever done this before unless you have an account that entered into this service and bottom line my firm Kevin has actually been in business considering that 2009 and we’ve been working with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 business so a lot of our huge huge business customers have dealt with bottom line to recover other government programs we have actually done sales tax and use tax joblessness tax work opportunity tax credits research and development tax credits unclaimed home real estate tax all of these other federal government programs.
The staff member retention tax credit is a broad based refundable tax credit designed to motivate.
employers to keep employees 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 invoices, company whose service is totally or partly suspended.
decrease by more than 50%.
1. The credit is available to all employers despite size including tax exempt companies. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) little.
businesses who take Small Business Loans.
2. To qualify, the company needs to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s company is completely or partially suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross invoices are below 50% of the equivalent quarter in 2019. As soon as the.
company’s gross receipts exceed 80% of a comparable quarter in 2019 they no longer qualify.
after completion of that quarter.
Computation of the Credit.
The quantity of the credit is 50% of the qualifying incomes paid up to $10,000 in overall.
It is effective for salaries paid after March 13th and before December 31, 2020.
The definition of certifying earnings differs by whether an employer had, usually, basically than.
100 employees in 2019.
Companies that specialize in ERC filing support typically supply expertise and assistance to help businesses browse the complicated process of claiming the credit. They can use different services, including:.
How is the employee retention credit calculated? Employee Retention Credit Significant Decline In Gross Receipts
Eligibility Evaluation: These business will examine your organization’s eligibility for the ERC based upon factors such as your market, income, and operations. If you fulfill the requirements for the credit and determine the optimum credit amount you can declare, they can assist determine.
Documentation and Calculation: ERC filing services will assist in gathering the necessary documentation, such as payroll records and financial declarations, to support your claim. They will also help compute the credit amount based upon qualified salaries and other qualifying expenses.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for previous quarters, these business can examine your past payroll records and financials to identify possible opportunities for retroactive credits. They can assist you amend prior tax returns to declare these refunds.
Filing Help: Business specializing in ERC filings will prepare and submit the needed kinds and documents on your behalf. This consists of finishing Form 941 or any other required tax return.
Compliance and Updates: ERC guidelines and guidance have progressed in time. These business stay upgraded with the latest changes and ensure that your filings abide by the most existing guidelines. They can also supply continuous assistance if the internal revenue service requests additional information or conducts an audit related to your ERC claim.
It is necessary to research study and veterinarian any company providing ERC filing help to ensure their credibility and expertise. Try to find established companies with experience in tax and payroll services, or think about reaching out to relied on accounting companies or tax professionals who offer ERC filing assistance.
Remember that while these business can supply important assistance, it’s always an excellent idea to have a fundamental understanding of the ERC requirements and process yourself. This will help you make informed decisions and ensure accurate filings.
The Worker 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 motivate companies to keep and pay their workers throughout the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to eligible companies, consisting of for-profit services, tax-exempt organizations, and certain governmental entities. To qualify, companies should fulfill one of two requirements:.
The business operations were fully or partially suspended due to a federal government order related to COVID-19.
Business experienced a significant decrease in gross receipts. As discussed earlier, for 2021, a significant decrease is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a significant 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.
Credit Amount: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity is equal to a percentage (as much as 70%) of certified wages paid to staff members, consisting of certain health plan costs. 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, businesses that got a Paycheck Security Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 allows businesses to declare the ERC even if they got a PPP loan. However, the very same wages can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and improved, enabling qualified employers to declare the credit for certified incomes paid as far back as March 13, 2020. This retroactive provision supplies an opportunity for businesses to amend prior-year tax returns and get refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their employment tax returns, typically Kind 941. The excess can be refunded to the employer if the credit surpasses the amount of employment taxes owed.
It is very important to keep in mind that the ERC provisions and eligibility requirements have developed in time. The very best course of action is to consult with a tax professional or go to the official internal revenue service website for the most current and in-depth information relating to the ERC, including any current legislative changes or updates.
To qualify for the ERC, a service needs to fulfill one of the following criteria:.
The business operations were fully or partially suspended due to a government order related to COVID-19.
The business experienced a considerable decrease in gross receipts. For 2021, a significant decrease 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 specified as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the right away preceding quarter.
The ERC is available to companies of all sizes, consisting of tax-exempt companies, but there are some exceptions. Federal government entities and businesses that received a PPP loan may have constraints on claiming the credit.
The procedure for claiming the ERC involves finishing the necessary types and consisting of the credit on your work income tax return (normally Type 941). The exact time it requires to process the credit can vary based on numerous aspects, consisting of the intricacy of your business and the work of the internal revenue service. It’s advised to seek advice from a tax professional for guidance specific to your scenario.
There are several companies that can aid with the procedure of declaring the ERC. These consist of accounting companies, tax advisory services, and payroll company. Some popular business that offer help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research study and get in touch with these companies directly to inquire about their services and costs.
Please keep in mind that the information provided here is based on basic understanding and might not show the most current updates or changes to the ERC. It is very important to talk to a tax expert or check out the main internal revenue service site for the most precise and up-to-date info relating to eligibility, declaring procedures, and offered help.
Less than 100. The credit is based if the employer had 100 or fewer staff members on average in 2019.
on incomes paid to all staff members whether they in fact worked or not. Simply put, even if the.
staff members worked full-time and earned money for full-time work, the employer still gets the credit.
Greater than 100. If the company had more than 100 workers usually in 2019, then the credit is.
allowed just for earnings paid to workers who did not work during the calendar quarter.
In both cases, “wages” includes not simply cash payments however also a portion of the cost of employer.
supplied health care. Employee Retention Credit Significant Decline In Gross Receipts
Companies can be immediately compensated for the credit by lowering the quantity of payroll taxes they.