Lets talk first about Federal Employee Retention Credit Hurricane Irma :
Our group here what do these guys doing everyone in this space is assisting teach people about ERC and uh always offer a lovely breakfast and have people truly find out about the program we must head to the room where we are able to show a few 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 numerous millions of dollars so these are duplicate copies of the letters that go to clients verifying that the check is on the method I mean you understand if you just start to take a look at some of these here I imply 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 actual 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 verified 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
get this you know the check is chosen sure and that’s when they pay so they don’t pay anything till they in fact receive the money 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 rely on Wonder trust that the procedure has actually been ended up and how many you think you have actually processed given that you began this we’re about 35 000 of these for
about 6 billion dollars wow so clearly they understand what they’re doing which’s what you require you require professionals 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 speaking about something really essential today the employee retention credit which the majority of you have never ever become aware of I definitely hadn’t become aware of it until really recently and found out a lot about it because this is most likely the lowest cost of capital for any small business anywhere
anytime if you have employees in between 5 and five hundred so I’ve got the specialist with me this is Josh Fox he’s the founder and CEO of bottom line Concepts 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 just call up your bank supervisor and state offer me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to tell us all 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 going away soon you got to learn 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 created the cares Act and the cares act offered services three 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 distinction right there two 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 all right go on sorry I simply have to make certain we got that point I suggest that’s a big difference a loan versus cash money I like cash cash that’s what we’re speaking about 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 initial cares Act is the ERC and yes Kevin it is a gorgeous hard check in the mail where you get actual cash from the IRS all right so let’s discuss how it works because it sounds like to me if it’s a if it’s worker retention credit that person needed to be a staff member so I’m going to make the Presumption this money is not for the owner not for individuals on the cap table not for shareholders it’s for employees right you had to have owned a business however it’s based on 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 qualified so you have to be on payroll in 2020 on the W-2 and you have to be on payroll for the first 6 months of 2021 on the W-2 proper so there were 6 quarters the program was open well walk us through the 6 quarters so you had quarters two three and 4 of 2020 and you had quarters one 2 and three of 2021. okay so that’s how it’s determined you have to be on the W-2 during that period now let’s talk my preferred part money 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 staff member’s salary 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 salary to an optimum of 7 thousand per quarter how did that happen um they simply changed the rules in.
2021 versus since the mayhem of the pandemic so they wished 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 approximately five thousand Max and then what happens 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 employee that is since that’s a lot 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 lower the 26 000 so what we’re seeing on average Kevin is if you took PPP cash somewhere around ten thousand dollars an individual 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 huge undoubtedly now the huge question is why does no one know about this due to the fact that look when I initially found out about this when I initially satisfied Josh you know I’ve got lots of investments in lots of business I’m a major supporter for entrepreneurship in America and make many lots of financial investments in business owners of which many suffered through the pandemic when I initially found out about this I called BS I don’t believe it since I use 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 which were well should have and we utilized them wisely to survive during the pandemic so when I became aware of this I said nah it can’t be true but when I dug around I even contacted us to my political leader buddies Governor Senators they didn’t know about it I indicate that’s how you know that’s how misinformation is that there’s no details out there then a lot of people told me well you can’t get it due to the fact that you took the PPP also not real so let’s ask Josh why does no one understand about the staff member retention credit you understand what’s fascinating you’re speaking about the banks Kevin since in the PPP loan procedure 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 country and they would process procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s just procedure process that’s all um and here there was chaos due to the fact that keep in mind in the initial cares act you could refrain from doing both programs so if you had actually done PPP you might refrain from doing ERC in the initial program and when they changed 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 ever made it clear to anyone about how to.
do this does your CFO know how to do this not truly he or she’s never done it before do the banks do it nope the banks do not do it the payroll business yeah some of them are doing it as a payroll business your accounting professional no your accountant’s never ever done this prior to unless you have an account that went into this company and bottom line my firm Kevin has been in business given 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 corporate customers have actually dealt with bottom line to recuperate other government programs we’ve done sales tax and use tax joblessness tax work chance 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 workers on their payroll. The credit is 50% of as much as $10,000 in wages paid by an.
Due to the fact that of COVID-19 or whose gross receipts, employer whose organization is totally or partially suspended.
decline by more than 50%.
1. The credit is offered to all employers no matter size consisting of tax exempt organizations. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) little.
services who take Small Business Loans.
2. To certify, the employer has to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s service is completely or partly suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross invoices are below 50% of the similar quarter in 2019. When the.
employer’s gross invoices exceed 80% of a comparable quarter in 2019 they no longer qualify.
after the end of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the certifying wages paid up to $10,000 in overall.
It works for salaries paid after March 13th and prior to December 31, 2020.
The meaning of certifying wages differs by whether a company had, on average, more or less than.
100 workers in 2019.
Business that focus on ERC filing assistance generally supply proficiency and assistance to help companies navigate the complex procedure of claiming the credit. They can offer different services, including:.
How is the employee retention credit calculated? Federal Employee Retention Credit Hurricane Irma
Eligibility Assessment: These business will evaluate your business’s eligibility for the ERC based upon factors such as your industry, revenue, and operations. If you fulfill the requirements for the credit and identify the optimum credit amount you can claim, they can help identify.
Documents and Estimation: ERC filing services will help in collecting the required documentation, such as payroll records and monetary statements, to support your claim. They will also help compute the credit quantity based upon eligible earnings and other certifying expenditures.
Retroactive Claim Evaluation: If you are eligible to claim the ERC for prior quarters, these companies can evaluate your previous payroll records and financials to determine prospective chances for retroactive credits. They can help you amend previous tax returns to claim these refunds.
Filing Help: Companies concentrating on ERC filings will prepare and send the essential types and documentation in your place. This consists of finishing Form 941 or any other necessary tax forms.
Compliance and Updates: ERC guidelines and guidance have actually progressed in time. These business stay updated with the most recent changes and guarantee that your filings comply with the most current standards. They can likewise provide continuous support if the internal revenue service demands extra details or performs an audit related to your ERC claim.
It is very important to research study and veterinarian any business providing ERC filing assistance to ensure their credibility and proficiency. Look for recognized companies with experience in tax and payroll services, or consider connecting to relied on accounting firms or tax experts who offer ERC filing support.
Remember that while these companies can provide important support, it’s constantly an excellent concept to have a fundamental understanding of the ERC requirements and process yourself. This will help you make notified choices and guarantee accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief procedures. The goal of the ERC is to encourage services to keep and pay their staff members during the pandemic, even if their operations have actually been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is available to qualified employers, including for-profit services, tax-exempt organizations, and specific governmental entities. To qualify, employers need to satisfy one of two requirements:.
The business operations were completely or partially suspended due to a federal government order related to COVID-19.
The business experienced a substantial decrease in gross invoices. As pointed out previously, for 2021, a significant decline is defined as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a substantial decline is specified as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
Credit Amount: 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 workers, consisting of particular health insurance expenses. 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, businesses that got a Paycheck Defense Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 allows companies to claim the ERC even if they received a PPP loan. However, the same salaries can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and enhanced, permitting eligible employers to declare the credit for certified wages paid as far back as March 13, 2020. This retroactive arrangement provides an opportunity for businesses to amend prior-year income tax return and get refunds.
Claiming the Credit: Companies can declare the ERC by reporting it on their employment income tax return, typically Form 941. The excess can be refunded to the employer if the credit goes beyond the amount of employment taxes owed.
It is essential to note that the ERC provisions and eligibility requirements have actually evolved gradually. The best strategy is to speak with a tax professional or check out the main IRS website for the most updated and in-depth details relating to the ERC, including any current legislative changes or updates.
To get approved for the ERC, a business should meet one of the following requirements:.
Business operations were fully or partly suspended due to a government order related to COVID-19.
The business experienced a substantial decline in gross invoices. For 2021, a considerable decrease is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decline is specified as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the right away preceding quarter.
The ERC is available to businesses of all sizes, consisting of tax-exempt organizations, but there are some exceptions. Federal government entities and companies that received a PPP loan may have limitations on declaring the credit.
The process for declaring the ERC includes finishing the required forms and including the credit on your employment income tax return (generally Form 941). The exact time it takes to process the credit can vary based upon a number of aspects, consisting of the intricacy of your organization and the work of the internal revenue service. It’s advised to consult with a tax expert for guidance specific to your circumstance.
There are several companies that can assist with the process of claiming the ERC. These include accounting companies, tax advisory services, and payroll service providers. Some widely known companies that offer support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research and get in touch with these companies straight to inquire about their services and fees.
Please note that the details offered here is based on basic understanding and might not reflect the most recent updates or modifications to the ERC. It is very important to consult with a tax expert or check out the main internal revenue service website for the most precise and updated details relating to eligibility, declaring treatments, and offered help.
Less than 100. If the company had 100 or fewer workers typically in 2019, then the credit is based.
on earnings paid to all workers whether they actually worked or not. To put it simply, 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 employer had more than 100 employees typically in 2019, then the credit is.
enabled just for wages paid to employees who did not work throughout the calendar quarter.
In both cases, “wages” consists of not just money payments however likewise a portion of the cost of employer.
provided healthcare. Federal Employee Retention Credit Hurricane Irma
Companies can be immediately compensated for the credit by minimizing the amount of payroll taxes they.