Lets talk first about Employee Retention Credit With Ppp Loan :
Our team here what do these men doing everyone in this space is helping teach people about ERC and uh always supply a lovely breakfast and have people really learn more about the program we need to head to the space where we are able to show some of the checks that we are getting for companies and I ‘d like to see that what is this this is uh numerous millions of dollars actually Kevin numerous countless dollars so these are duplicate copies of the letters that go to clients confirming that the check is on the method I mean you understand if you simply start 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 suggest it’s simply I indicate consider the number of real customers 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 confirmed and the check is on the mail in the mail from the internal revenue service heading to the customer so that’s how you’re able to track it you know when you
receive this you understand the check is gone for sure and that’s when they pay so they do not pay anything till they actually receive the money they don’t pay bottom line Wonder trust anything until this letter is verified the check is on the way they transfer it into their checking account and they can truly trust Wonder trust that the procedure has been completed and the number of you think you’ve processed given that you began this we have to do with 35 000 of these for
about 6 billion dollars wow so plainly they know what they’re doing and that’s what you require you require 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 Wonderful here you’re at my YouTube channel we’re talking about something really crucial today the employee retention credit which most of you have never ever become aware of I certainly hadn’t heard of it until really recently and learned a lot about it because this is probably the lowest cost of capital for any small company anywhere
anytime if you have employees in between 5 and five hundred so I’ve 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 challenging this isn’t like PPP we just phone your bank manager and say offer 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 have actually ended up being yes the Ambassador and paid representative for this I like this program it’s going away very soon you got to find out everything 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 came up with the cares Act and the cares act provided organizations 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 okay go on sorry I just need to make sure we got that point I suggest that’s a big distinction a loan versus money money I like cash 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 lovely difficult check in the mail where you get actual money from the IRS all right so let’s discuss how it works because it seems like to me if it’s a if it’s worker 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 people on the cap table not for investors it’s for employees right you needed to have actually owned a service however it’s based upon you having W-2 workers in America not 10.99. As long as you had W-2 employees 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 first six months of 2021 on the W-2 right 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 2 and three of 2021. okay 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 cash just how much can you get back per worker that was on a W-2 in those 6 quarters so the calculation in 2020 to be precise Kevin is 50 of the employee’s income to a maximum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the staff member’s wage to an optimum of seven thousand per quarter how did that happen 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 up to 5 thousand Max and then what happens 21 000 Max in 2021 oh that’s how you develop twenty 6 thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty 6 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 need to be decreased from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would decrease the 26 000 so what we’re seeing typically Kevin is if you took PPP cash someplace around ten thousand dollars a person so let’s say hypothetically you owned a restaurant 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 IRS so it’s big clearly now the huge concern is why does no one know about this because appearance when I initially found out about this when I initially met Josh you understand I have actually got great deals of financial investments in great deals of companies I’m a major supporter for entrepreneurship in America and make numerous many financial investments in business owners of which numerous suffered through the pandemic when I initially heard about this I called BS I don’t think 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 been worthy of and we utilized them sensibly to survive during 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 buddies Guv Senators they didn’t know about it I suggest that’s how you know that’s how misinformation is that there’s no details out there then a bunch of people informed me well you can’t get it since you took the PPP also not real so let’s ask Josh why does no one know about the worker retention credit you understand what’s interesting 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 big 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 procedure process that’s all um and here there was chaos because keep in mind in the initial cares act you might refrain from doing both programs so if you had done PPP you might refrain from doing ERC in the initial program and when they altered 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 anyone about how to.
do this does your CFO understand how to do this not actually he or she’s never ever done it before do the banks do it nope the banks don’t do it the payroll business yeah a few of them are doing it as a payroll company your accountant no your accountant’s never done this before unless you have an account that entered into this business and bottom line my firm Kevin has stayed in business since 2009 and we’ve been dealing with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 companies so a great deal of our huge huge business clients have dealt with bottom line to recover other federal 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 federal government programs.
The worker retention tax credit is a broad based refundable tax credit developed to encourage.
employers to keep workers on their payroll. The credit is 50% of as much as $10,000 in incomes paid by an.
employer whose company is totally or partially suspended because of COVID-19 or whose gross invoices.
decrease by more than 50%.
1. The credit is offered to all companies despite size consisting of tax exempt companies. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) little.
businesses who take Small company Loans.
2. To qualify, the company has to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s organization is completely or partially suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross invoices are below 50% of the similar quarter in 2019. When the.
company’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 wages paid up to $10,000 in total.
It is effective for earnings paid after March 13th and prior to December 31, 2020.
The meaning of certifying wages varies by whether an employer had, usually, basically than.
100 employees in 2019.
Business that specialize in ERC filing support usually supply know-how and support to assist organizations navigate the complicated process of declaring the credit. They can offer different services, including:.
How is the employee retention credit calculated? Employee Retention Credit With Ppp Loan
Eligibility Assessment: These companies will evaluate your company’s eligibility for the ERC based upon elements such as your industry, profits, and operations. If you satisfy the requirements for the credit and recognize the optimum credit quantity you can claim, they can help determine.
Documentation and Calculation: ERC filing services will help in collecting the required paperwork, such as payroll records and financial declarations, to support your claim. They will also help calculate the credit amount based on eligible salaries and other qualifying costs.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for previous quarters, these companies can review your past payroll records and financials to recognize possible opportunities for retroactive credits. They can help you amend previous income tax return to claim these refunds.
Filing Help: Business concentrating on ERC filings will prepare and submit the essential kinds and documents on your behalf. This includes completing Form 941 or any other necessary tax return.
Compliance and Updates: ERC regulations and guidance have evolved gradually. These companies remain updated with the current changes and ensure that your filings comply with the most current standards. They can likewise provide ongoing assistance if the internal revenue service demands additional details or performs an audit related to your ERC claim.
It is essential to research study and vet any company offering ERC filing support to ensure their trustworthiness and competence. Try to find established companies with experience in tax and payroll services, or consider connecting to trusted accounting companies or tax professionals who provide ERC filing assistance.
Remember that while these companies can offer valuable assistance, it’s constantly a great concept to have a standard understanding of the ERC requirements and process yourself. This will assist you make informed decisions and guarantee precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief measures. The objective of the ERC is to motivate organizations to retain and pay their employees throughout the pandemic, even if their operations have been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is available to eligible employers, including for-profit companies, tax-exempt companies, and specific governmental entities. To certify, employers should fulfill one of two criteria:.
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 discussed previously, 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 decline is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decline in gross invoices compared to the immediately preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit amount amounts to a portion (up to 70%) of certified earnings paid to employees, consisting of certain health insurance 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, businesses that received a Paycheck Protection Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 enables companies to claim the ERC even if they got a PPP loan. However, the very same incomes can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and enhanced, enabling eligible employers to declare the credit for qualified incomes paid as far back as March 13, 2020. This retroactive arrangement provides a chance for organizations to change prior-year tax returns and receive refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their employment income tax return, generally Type 941. The excess can be refunded to the company if the credit exceeds the quantity of employment taxes owed.
It’s important to note that the ERC arrangements and eligibility criteria have evolved in time. The best course of action is to talk to a tax expert or check out the official internal revenue service website for the most up-to-date and detailed info relating to the ERC, including any recent legislative modifications or updates.
To qualify for the ERC, an organization should fulfill among the following requirements:.
The business operations were totally 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% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a substantial decline is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
The ERC is readily available to companies of all sizes, consisting of tax-exempt organizations, however there are some exceptions. For example, government entities and businesses that received a PPP loan might have limitations on declaring the credit.
The process for claiming the ERC involves finishing the required kinds and including the credit on your work tax return (usually Form 941). The exact time it requires to process the credit can differ based upon several elements, including the intricacy of your business and the work of the internal revenue service. It’s recommended to talk to a tax expert for guidance particular to your scenario.
There are a number of business that can assist with the process of declaring the ERC. These include accounting companies, tax advisory services, and payroll company. Some well-known companies that provide support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research and get in touch with these business straight to inquire about their services and fees.
Please keep in mind that the details provided here is based upon basic knowledge and may not show the most current updates or changes to the ERC. It is necessary to speak with a tax expert or check out the official internal revenue service site for the most current and precise information regarding eligibility, declaring treatments, and offered help.
Less than 100. If the employer had 100 or less workers usually in 2019, then the credit is based.
on wages paid to all workers whether they really 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. If the company had more than 100 workers typically in 2019, then the credit is.
permitted just for earnings paid to workers who did not work throughout the calendar quarter.
In both cases, “salaries” includes not simply money payments but likewise a portion of the cost of company.
supplied healthcare. Employee Retention Credit With Ppp Loan
Employers can be immediately compensated for the credit by minimizing the amount of payroll taxes they.