Lets talk first about Employee Retention Credit State Tax Treatment :
Our team here what do these men doing everyone in this room is helping teach people about ERC and uh always provide a lovely breakfast and have people actually learn more 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 companies and I wish to see that what is this this is uh hundreds of countless dollars actually Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to clients validating that the check is on the way I indicate you know if you just start to take a look at a few 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 suggest think of the number of actual clients that went through the program yeah this is the very end this is the celebration at the end when the check is validated the numbers are verified and the check is on the mail in the mail from the IRS heading to the consumer so that’s how you’re able to track it you understand when you
get this you understand the check is chosen sure which’s when they pay so they do not pay anything until they really receive the money they do not pay bottom line Wonder trust anything until this letter is validated the check is on the method they deposit it into their bank account and they can truly trust Wonder trust that the procedure has actually been completed and how many you believe you have actually processed considering that you started this we have to do with 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 truly important today the employee retention credit which most of you have actually never heard of I certainly had not become aware of it until very recently and learned a lot about it due to the fact that this is probably the most affordable cost of capital for any small company anywhere
anytime if you have employees in between five and five hundred so I have actually got the expert 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 hard this isn’t like PPP we simply call up your bank manager and say give 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 like this program it’s going away very soon you got to discover all 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 developed the cares Act and the cares act used organizations three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everybody it makes a huge distinction right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the money money payroll tax refund okay go on sorry I just need to make certain we got that point I suggest that’s a big difference a loan versus cash cash I like money cash that’s what we’re speaking about 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 stunning tough check in the mail where you get actual money from the IRS all right so let’s speak about how it works because it sounds like to me if it’s a if it’s staff member retention credit that individual needed to be a staff member 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 workers right you had to have owned a service but it’s based on you having W-2 workers 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 eligible so you have to be on payroll in 2020 on the W-2 and you have to be on payroll for the very first six months of 2021 on the W-2 proper so there were 6 quarters the program was open well stroll us through the six quarters so you had quarters 2 3 and 4 of 2020 and you had quarters one 2 and three of 2021. alright so that’s how it’s determined you need to be on the W-2 throughout that duration now let’s talk my favorite part money how much can you return per worker that was on a W-2 in those six quarters so the estimation in 2020 to be exact Kevin is 50 of the worker’s salary to a maximum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers escalated to 70 of the worker’s wage to an optimum of 7 thousand per quarter how did that take place um they simply altered the rules in.
2021 versus because the turmoil 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 happens 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 six thousand dollars per staff member that is because that’s a great deal of cash it is now there’s a caveat here the PPP cash would have to be minimized 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 typically Kevin is if you took PPP cash somewhere around 10 thousand dollars a person so let’s say hypothetically you owned a restaurant in New york city 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 IRS so it’s big clearly now the huge concern is why does nobody learn about this because look when I initially found out about this when I first met Josh you understand I have actually got lots of investments in great deals of companies I’m a significant supporter for entrepreneurship in America and make lots of lots of financial investments in entrepreneurs of which many suffered through the pandemic when I first found out 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 extremely easy to do we had our CEOs call the banks they got their loans which were well deserved and we utilized them wisely to survive 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 called to my politician friends Guv Senators they didn’t understand about it I imply that’s how you understand that’s how false information is that there’s no information out there then a bunch of people informed me well you can’t get it since you took the PPP likewise not true so let’s ask Josh why does no one know about the worker retention credit you know what’s intriguing you’re speaking about the banks Kevin since 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 big banks in our nation 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 due to the fact that remember in the original cares act you could refrain from doing both programs so if you had done PPP you could not do ERC in the original program and when they changed 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 any person about how to.
do this does your CFO understand how to do this not really he or she’s never done it in the past do the banks do it nope the banks do not do it the payroll business yeah a few 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 business and bottom line my firm Kevin has actually stayed in business considering that 2009 and we’ve been dealing with the federal government and the state federal government to recuperate cash for Fortune 500 Fortune 1000 business so a lot of our big big business customers have dealt with bottom line to recuperate other federal government programs we have actually done sales tax and utilize tax joblessness tax work opportunity tax credits research and development tax credits unclaimed property real estate tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit designed to motivate.
companies to keep workers on their payroll. The credit is 50% of up to $10,000 in earnings paid by an.
Since of COVID-19 or whose gross invoices, employer whose organization is completely or partly suspended.
decline by more than 50%.
1. The credit is readily available to all companies no matter size consisting of tax exempt companies. There are.
just 2 exceptions: (1) state and city governments and their instrumentalities and (2) little.
companies who take Small company Loans.
2. To certify, the employer needs to meet one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s service is totally or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are listed below 50% of the similar quarter in 2019. Once the.
employer’s gross invoices go above 80% of an equivalent quarter in 2019 they no longer certify.
after the end of that quarter.
Computation of the Credit.
The quantity of the credit is 50% of the certifying salaries paid up to $10,000 in overall.
It works for wages paid after March 13th and prior to December 31, 2020.
The definition of qualifying salaries differs by whether an employer had, on average, more or less than.
100 employees in 2019.
Business that specialize in ERC filing assistance typically supply proficiency and assistance to assist businesses browse the complicated procedure of claiming the credit. They can offer various services, including:.
How is the employee retention credit calculated? Employee Retention Credit State Tax Treatment
Eligibility Evaluation: These business will assess your service’s eligibility for the ERC based on factors such as your market, profits, and operations. They can assist identify if you satisfy the requirements for the credit and recognize the optimum credit amount you can claim.
Paperwork and Estimation: ERC filing services will help in collecting the needed documentation, such as payroll records and monetary statements, to support your claim. They will also help calculate the credit quantity based on eligible incomes and other qualifying costs.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for prior quarters, these companies can evaluate your past payroll records and financials to determine potential opportunities for retroactive credits. They can help you change prior income tax return to declare these refunds.
Filing Help: Business focusing on ERC filings will prepare and send the needed kinds and paperwork in your place. This includes finishing Kind 941 or any other required tax return.
Compliance and Updates: ERC policies and guidance have developed with time. These business remain updated with the current modifications and ensure that your filings adhere to the most existing standards. If the IRS demands extra details or carries out an audit related to your ERC claim, they can also supply continuous support.
It is necessary to research study and vet any company offering ERC filing help to guarantee their reliability and proficiency. Try to find recognized firms with experience in tax and payroll services, or think about reaching out to relied on accounting firms or tax specialists who offer ERC submitting assistance.
Bear in mind that while these business can offer important assistance, it’s constantly an excellent concept to have a basic understanding of the ERC requirements and procedure yourself. This will assist you make informed choices and make sure precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief procedures. The goal of the ERC is to motivate organizations to maintain and pay their workers during 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 companies, consisting of for-profit companies, tax-exempt organizations, and particular governmental entities. To qualify, companies must fulfill one of two requirements:.
The business operations were totally or partially suspended due to a government order related to COVID-19.
Business experienced a substantial decline in gross invoices. As pointed out earlier, for 2021, a significant decline is defined as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a considerable decrease is specified as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decline 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 (as much as 70%) of certified incomes paid to workers, including particular health plan costs. The optimum 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 an Income Security Program (PPP) loan were not eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 allows services to claim the ERC even if they got a PPP loan. The very same incomes can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and improved, allowing eligible employers to claim the credit for qualified wages paid as far back as March 13, 2020. This retroactive provision offers an opportunity for companies to change prior-year tax returns and receive refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their employment tax returns, typically Kind 941. The excess can be reimbursed to the company if the credit exceeds the quantity of work taxes owed.
It’s important to note that the ERC arrangements and eligibility criteria have developed with time. The very best strategy is to speak with a tax professional or visit the main IRS site for the most detailed and updated details regarding the ERC, consisting of any current legislative changes or updates.
To receive the ERC, an organization needs to fulfill among the following 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 invoices. For 2021, a substantial decrease is defined as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a considerable decrease is specified as a 20% decrease in gross invoices 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 companies of all sizes, consisting of tax-exempt companies, but there are some exceptions. Federal government entities and organizations that got a PPP loan might have limitations on declaring the credit.
The process for declaring the ERC involves finishing the needed types and including the credit on your work income tax return (typically Type 941). The exact time it takes to process the credit can vary based on several aspects, including the complexity of your organization and the work of the internal revenue service. It’s advised to consult with a tax professional for assistance specific to your scenario.
There are a number of business that can help with the procedure of claiming the ERC. These include accounting firms, tax advisory services, and payroll company. Some popular business that offer help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research study and contact these business straight to inquire about their services and charges.
Please keep in mind that the information supplied here is based upon general understanding and might not reflect the most recent updates or modifications to the ERC. It is necessary to talk to a tax expert or visit the official IRS website for the most accurate and updated details regarding eligibility, claiming procedures, and readily available support.
Less than 100. If the employer had 100 or less staff members usually in 2019, then the credit is based.
on earnings paid to all staff members whether they in fact worked or not. To put it simply, even if the.
staff members worked full-time and got paid for full-time work, the employer still gets the credit.
Greater than 100. The credit is if the employer had more than 100 employees on average in 2019.
permitted just for salaries paid to staff members who did not work during the calendar quarter.
In both cases, “salaries” consists of not simply money payments but also a portion of the expense of company.
offered health care. Employee Retention Credit State Tax Treatment
Employers can be instantly repaid for the credit by decreasing the amount of payroll taxes they.