Lets talk first about Employee Retention Credits Under The Cares Act :
Our group here what do these men doing everyone in this space is helping teach people about ERC and uh constantly provide a lovely breakfast and have individuals actually find out about the program we ought to head to the room where we have the ability to display some of the checks that we are getting for business and I wish to see that what is this this is uh numerous millions of dollars actually Kevin numerous countless dollars so these are replicate copies of the letters that go to customers confirming that the check is on the method I indicate you understand if you simply begin to take a look at a few of these here I imply this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s just I imply think about how many 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 consumer so that’s how you’re able to track it you know when you
get 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 till this letter is confirmed the check is on the method they transfer it into their savings account and they can genuinely rely on Wonder trust that the procedure has actually been completed and the number of you think you’ve processed given that you started this we’re about 35 000 of these for
about six billion dollars wow so plainly they know what they’re doing and that’s what you need you require professionals 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 speaking about something really crucial today the employee retention credit which the majority of you have never become aware of I definitely had not become aware of it until really recently and learned a lot about it since this is most likely the lowest expense of capital for any small company anywhere
anytime if you have workers in between 5 and five hundred so I’ve got the professional 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 your bank supervisor and say 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 have actually ended up being yes the Ambassador and paid representative for this I like this program it’s disappearing very soon you got to find out all about it let’s talk worker retention credit Josh Fox what is an ERC let’s just begin there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act offered companies 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 big distinction right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the cash money payroll tax refund fine go on sorry I simply have to make sure we got that point I imply that’s a big distinction a loan versus money money I like cash money that’s what we’re discussing okay 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 lovely hard check in the mail where you get real cash from the internal revenue service all right so let’s talk about how it works because it sounds like to me if it’s a if it’s staff member retention credit that individual had to be a staff member so I’m going to make the Assumption this money is not for the owner not for people on the cap table not for investors it’s for employees right you had to have owned a company but it’s based on you having W-2 employees 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 eligible so you need to be on payroll in 2020 on the W-2 and you need to be on payroll for the very first six months of 2021 on the W-2 appropriate so there were six quarters the program was open well walk us through the six quarters so you had quarters two three and 4 of 2020 and you had quarters one two and 3 of 2021. okay so that’s how it’s determined you have to be on the W-2 throughout that period now let’s talk my favorite part money just how much can you get back per employee that was on a W-2 in those six quarters so the estimation in 2020 to be exact Kevin is 50 of the staff member’s wage to an optimum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers increased to 70 of the employee’s wage to an optimum of 7 thousand per quarter how did that happen um they simply changed the rules in.
2021 versus since 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 as much as 5 thousand Max and after that what takes place 21 000 Max in 2021 oh that’s how you develop twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per staff member that is since 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 2 you would reduce the 26 000 so what we’re seeing on average Kevin is if you took PPP cash somewhere around ten thousand dollars a person so let’s state hypothetically you owned a restaurant in New york city City where I’m from and you had a hundred staff members and you took PPP money you would still get a million dollar in the mail from the internal revenue service so it’s big obviously now the big concern is why does nobody learn about this because look when I first became aware of this when I first fulfilled Josh you know I’ve got great deals of financial investments in great deals of business I’m a major advocate for entrepreneurship in America and make lots of many investments in business owners of which numerous 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 money center Banks to get it it was very easy to do we had our CEOs call the banks they got their loans which were well been worthy of and we utilized them carefully to stay alive throughout the pandemic so when I found out about this I stated nah it can’t be true but when I dug around I even contacted us to my politician good friends Governor Senators they didn’t understand about it I indicate that’s how you understand that’s how false information is that there’s no info out there then a lot of people told me well you can’t get it since you took the PPP likewise not real so let’s ask Josh why does nobody understand about the staff member retention credit you know what’s intriguing 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 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 just process process that’s all um and here there was mayhem because keep in mind in the initial cares act you might not do both programs so if you had actually done PPP you might not do ERC in the initial program and when they altered the law in 2021 the banks were refraining from doing ERC since it’s not alone so you’re getting a tax refund so the government never ever made it clear to anyone about how to.
do this does your CFO understand how to do this not really he or she’s never ever done it before do the banks do it nope the banks don’t do it the payroll companies yeah some of them are doing it as a payroll business your accounting professional no your accounting professional’s never ever done this prior to unless you have an account that entered into this business and bottom line my company Kevin has been in business given that 2009 and we have actually been dealing with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 business so a lot of our huge big business customers have worked with bottom line to recuperate other government programs we have actually done sales tax and utilize tax joblessness tax work opportunity tax credits research and development tax credits unclaimed property property tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit developed to motivate.
employers to keep staff members on their payroll. The credit is 50% of as much as $10,000 in earnings paid by an.
Since of COVID-19 or whose gross receipts, company whose organization is completely or partly suspended.
decrease by more than 50%.
1. The credit is offered to all employers no matter size including tax exempt organizations. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) small.
organizations who take Small Business Loans.
2. To qualify, the employer needs to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s service is fully or partly suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the equivalent quarter in 2019. Once the.
company’s gross invoices exceed 80% of an equivalent quarter in 2019 they no longer certify.
after the end of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the qualifying earnings paid up to $10,000 in overall.
It works for incomes paid after March 13th and before December 31, 2020.
The meaning of qualifying earnings varies by whether a company had, on average, basically than.
100 staff members in 2019.
Companies that concentrate on ERC filing support normally offer know-how and support to assist businesses navigate the complicated procedure of claiming the credit. They can offer various services, including:.
How is the employee retention credit calculated? Employee Retention Credits Under The Cares Act
Eligibility Assessment: These business will assess your business’s eligibility for the ERC based on aspects such as your market, profits, and operations. They can assist determine if you satisfy the requirements for the credit and identify the maximum credit amount you can declare.
Documents and Computation: ERC filing services will help in collecting the essential paperwork, such as payroll records and financial declarations, to support your claim. They will also help determine the credit quantity based upon eligible wages and other qualifying expenditures.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for previous quarters, these companies can evaluate your past payroll records and financials to identify prospective opportunities for retroactive credits. They can assist you change prior income tax return to claim these refunds.
Filing Help: Business focusing on ERC filings will prepare and submit the essential forms and documents in your place. This consists of finishing Kind 941 or any other necessary tax return.
Compliance and Updates: ERC policies and guidance have developed gradually. These companies stay upgraded with the most recent modifications and ensure that your filings adhere to the most current standards. If the IRS demands extra details or conducts an audit associated to your ERC claim, they can likewise provide continuous assistance.
It is necessary to research study and veterinarian any company offering ERC filing support to guarantee their reliability and knowledge. Search for established companies with experience in tax and payroll services, or consider reaching out to trusted accounting companies or tax specialists who offer ERC filing assistance.
Bear in mind that while these companies can provide valuable assistance, it’s constantly a good idea to have a standard understanding of the ERC requirements and procedure yourself. This will help you make informed choices and make sure precise filings.
The Worker 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 encourage organizations to keep and pay their employees during the pandemic, even if their operations have been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to eligible companies, consisting of for-profit businesses, tax-exempt companies, and specific governmental entities. To certify, companies should satisfy one of two criteria:.
Business operations were completely or partially suspended due to a government order related to COVID-19.
Business experienced a considerable decline in gross receipts. As discussed earlier, for 2021, a considerable decline is specified as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019, or a 20% decline in gross receipts compared to the right away preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount is equal to a percentage (as much as 70%) of qualified wages paid to employees, including particular health plan expenses. The maximum 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 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 claim the ERC even if they got a PPP loan. However, the same incomes can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and boosted, enabling eligible companies to claim the credit for certified salaries paid as far back as March 13, 2020. This retroactive arrangement provides an opportunity for businesses to change prior-year income tax return and get refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their employment tax returns, normally Type 941. If the credit surpasses the quantity of employment taxes owed, the excess can be refunded to the company.
It is essential to keep in mind that the ERC provisions and eligibility requirements have developed with time. The very best strategy is to seek advice from a tax expert or check out the official IRS website for the most comprehensive and current info concerning the ERC, including any recent legislative changes or updates.
To qualify for the ERC, a company needs to fulfill one of the following requirements:.
The business operations were fully or partly suspended due to a federal government order related to COVID-19.
Business experienced a substantial decrease in gross invoices. For 2021, a considerable decrease is specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decline in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross receipts compared to the immediately preceding quarter.
The ERC is available to organizations of all sizes, consisting of tax-exempt organizations, but there are some exceptions. Government entities and businesses that got a PPP loan may have restrictions on claiming the credit.
The procedure for declaring the ERC involves finishing the necessary forms and including the credit on your employment tax return (normally Type 941). The exact time it takes to process the credit can vary based on several elements, including the complexity of your company and the workload of the IRS. It’s suggested to speak with a tax expert for guidance specific to your situation.
There are a number of business that can assist with the procedure of declaring the ERC. Some widely known companies 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 basic understanding and might not reflect the most current updates or changes to the ERC. It’s important to seek advice from a tax expert or go to the official IRS site for the most precise and up-to-date details regarding eligibility, declaring procedures, and available support.
Less than 100. The credit is based if the company had 100 or fewer workers on average in 2019.
on earnings paid to all staff members whether they in fact worked or not. Simply put, even if the.
staff members worked full-time and got paid 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.
enabled only for incomes paid to workers who did not work during the calendar quarter.
In both cases, “incomes” consists of not just cash payments but also a part of the cost of company.
provided healthcare. Employee Retention Credits Under The Cares Act
Companies can be immediately compensated for the credit by decreasing the amount of payroll taxes they.