Lets talk first about Hurricane Harvey Employee Retention Credit :
Our group here what do these people doing everyone in this room is helping teach individuals about ERC and uh always offer a gorgeous breakfast and have people really discover the program we need to head to the space where we have the ability to display a few of the checks that we are getting for companies and I wish to see that what is this this is uh numerous countless dollars literally Kevin numerous countless dollars so these are duplicate copies of the letters that go to clients validating that the check is on the way I imply you know if you just start to look at a few of these here I suggest this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s simply I imply consider the number of real clients that went through the program yeah this is the very end this is the party 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 chosen sure and that’s when they pay so they don’t pay anything up until they actually get the money they don’t pay bottom line Wonder trust anything up until this letter is verified the check is on the way they transfer it into their savings account and they can really rely on Wonder trust that the procedure has actually been completed and the number of you think you’ve processed considering that you started this we have to do with 35 000 of these for
about six billion dollars wow so plainly they understand what they’re doing and that’s what you require you need experts 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 truly crucial today the worker retention credit which the majority of you have actually never ever become aware of I certainly had not become aware of it until extremely recently and learned a lot about it since this is most likely the most affordable expense of capital for any small company anywhere
anytime if you have employees in between five 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 contact your bank supervisor and state provide me a loan it does not work there’s not a loan it’s an application and Josh is going to inform us all about it and how to get it and why I have actually become yes the Ambassador and paid spokesperson for this I like this program it’s disappearing very soon you got to discover all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just begin there so throughout the Trump Administration when President Trump was enacted they developed the cares Act and the cares act used companies three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everybody it makes a big difference right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the money cash payroll tax refund okay go on sorry I just have to make certain we got that point I suggest that’s a big distinction a loan versus cash cash I like cash 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 original cares Act is the ERC and yes Kevin it is a stunning difficult check in the mail where you get real money from the internal revenue service all right so let’s discuss how it works due to the fact that it seems like to me if it’s a if it’s employee retention credit that person needed to be a staff member so I’m going to make the Assumption this money 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 business but it’s based upon 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 qualified so you have to be on payroll in 2020 on the W-2 and you need to be on payroll for the very first 6 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 2 3 and 4 of 2020 and you had quarters one two and three of 2021. fine so that’s how it’s determined you have to be on the W-2 throughout that duration now let’s talk my favorite part money just how much can you return per employee that was on a W-2 in those 6 quarters so the calculation in 2020 to be specific Kevin is 50 of the employee’s wage to an optimum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers increased to 70 of the worker’s salary to an optimum of seven thousand per quarter how did that happen um they simply changed the rules in.
2021 versus because 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 five thousand Max and then what occurs 21 000 Max in 2021 oh that’s how you create twenty six 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 since that’s a lot of money it is now there’s a caution here the PPP money would have to be minimized from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would decrease the 26 000 so what we’re seeing usually Kevin is if you took PPP money somewhere around ten thousand dollars an individual so let’s say hypothetically you owned a dining establishment in New york city City where I’m from and you had a hundred workers and you took PPP money you would still get a million dollar in the mail from the internal revenue service so it’s substantial undoubtedly now the huge question is why does nobody know about this since look when I first found out about this when I first fulfilled Josh you know I have actually got great deals of investments in great deals of companies I’m a significant supporter for entrepreneurship in America and make many lots of investments in entrepreneurs of which lots of suffered through the pandemic when I first found out about 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 extremely easy to do we had our CEOs call the banks they got their loans which were well deserved and we used them wisely to stay alive during the pandemic so when I found out about this I said nah it can’t hold true but when I dug around I even called to my politician pals Governor Senators they didn’t understand about it I mean that’s how you know that’s how misinformation is that there’s no info out there then a lot of people informed me well you can’t get it because you took the PPP also not true so let’s ask Josh why does nobody understand about the staff member 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 wanted a PPP loan you would call Wells Fargo Citibank Bank of America any of the huge 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 turmoil since keep in mind in the original cares act you might refrain from doing both programs so if you had 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 because it’s not alone so you’re getting a tax refund so the federal government never made it clear to anybody about how to.
do this does your CFO understand how to do this not really he or she’s never ever 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 accounting professional no your accounting professional’s never ever done this prior to unless you have an account that went into this organization and bottom line my company Kevin has stayed in business given that 2009 and we have actually been dealing with the federal government and the state federal government to recuperate cash for Fortune 500 Fortune 1000 companies so a great deal of our big big business clients have worked with bottom line to recuperate other federal government programs we have actually done sales tax and use tax unemployment tax work opportunity tax credits research and development tax credits unclaimed home property tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit created to encourage.
companies to keep workers on their payroll. The credit is 50% of as much as $10,000 in incomes paid by an.
Due to the fact that of COVID-19 or whose gross receipts, company whose organization is fully or partially suspended.
decrease by more than 50%.
1. The credit is offered to all companies regardless of size including tax exempt companies. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) little.
organizations who take Small Business 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 company is totally or partially 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 comparable quarter in 2019. Once the.
employer’s gross receipts exceed 80% of an equivalent quarter in 2019 they no longer certify.
after the end of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the certifying incomes paid up to $10,000 in overall.
It is effective for earnings paid after March 13th and before December 31, 2020.
The definition of qualifying wages differs by whether an employer had, on average, more or less than.
100 staff members in 2019.
Business that focus on ERC filing support usually supply competence and support to assist services browse the intricate procedure of declaring the credit. They can offer numerous services, consisting of:.
How is the employee retention credit calculated? Hurricane Harvey Employee Retention Credit
Eligibility Evaluation: These companies will assess your company’s eligibility for the ERC based upon elements such as your market, income, and operations. They can assist determine if you fulfill the requirements for the credit and identify the maximum credit quantity you can declare.
Paperwork and Computation: ERC filing services will assist in collecting the essential paperwork, such as payroll records and monetary declarations, to support your claim. They will also help determine the credit amount based on qualified earnings and other certifying costs.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for prior quarters, these companies can review your past payroll records and financials to recognize possible opportunities for retroactive credits. They can help you modify prior tax returns to declare these refunds.
Filing Assistance: Companies focusing on ERC filings will prepare and submit the needed kinds and documentation on your behalf. This includes completing Kind 941 or any other required tax forms.
Compliance and Updates: ERC policies and assistance have actually progressed with time. These companies remain upgraded with the latest modifications and make sure that your filings abide by the most present standards. They can likewise supply ongoing support if the internal revenue service demands additional info or conducts an audit related to your ERC claim.
It is very important to research and veterinarian any company offering ERC filing help to guarantee their trustworthiness and know-how. Look for established firms with experience in tax and payroll services, or think about connecting to relied on accounting firms or tax specialists who use ERC filing assistance.
Remember that while these companies can provide valuable support, it’s always a great idea to have a fundamental understanding of the ERC requirements and process yourself. This will assist you make informed decisions 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 maintain and pay their staff members 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 employers, consisting of for-profit companies, tax-exempt organizations, and certain governmental entities. To qualify, employers should fulfill one of two criteria:.
Business operations were fully or partly suspended due to a government order related to COVID-19.
Business experienced a considerable decrease in gross invoices. As pointed out previously, for 2021, a substantial decline is specified as a 20% decrease in gross receipts 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% decline in gross invoices compared to the instantly preceding quarter.
Credit Quantity: 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 (up to 70%) of qualified incomes paid to employees, including specific health insurance expenses. The optimum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, businesses that received an Income Security Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 allows organizations to declare the ERC even if they received a PPP loan. However, the very 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 boosted, allowing qualified companies to declare the credit for certified earnings paid as far back as March 13, 2020. This retroactive provision offers a chance for companies to change prior-year tax returns and receive refunds.
Declaring the Credit: Employers can declare the ERC by reporting it on their work income tax return, usually Type 941. The excess can be refunded to the company if the credit goes beyond the amount of work taxes owed.
It is necessary to keep in mind that the ERC arrangements and eligibility requirements have actually progressed in time. The best strategy is to seek advice from a tax expert or visit the official IRS website for the most detailed and current details relating to the ERC, including any recent legislative modifications or updates.
To receive the ERC, a business should meet among the following 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 receipts. For 2021, a considerable decline is specified as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019, or a 20% decline in gross receipts compared to the right away preceding quarter.
The ERC is offered to services of all sizes, consisting of tax-exempt companies, however there are some exceptions. For instance, government entities and companies that received a PPP loan may have constraints on claiming the credit.
The process for declaring the ERC includes completing the needed kinds and consisting of the credit on your employment tax return (usually Type 941). The exact time it takes to process the credit can differ based upon several factors, including the intricacy of your service and the workload of the IRS. It’s recommended to speak with a tax expert for assistance specific to your circumstance.
There are several companies that can assist with the procedure of declaring the ERC. Some widely known business that provide help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the information provided here is based upon basic understanding and may not reflect the most recent updates or changes to the ERC. It is very important to seek advice from a tax expert or go to the main IRS website for the most current and accurate info relating to eligibility, claiming procedures, and available assistance.
Less than 100. If the company had 100 or fewer staff members typically in 2019, then the credit is based.
on incomes paid to all staff members whether they really worked or not. To put it simply, even if the.
workers worked full-time and earned money for full time work, the employer still gets the credit.
Greater than 100. The credit is if the company had more than 100 employees on average in 2019.
allowed only for wages paid to workers who did not work throughout the calendar quarter.
In both cases, “wages” includes not just cash payments however likewise a part of the cost of employer.
provided health care. Hurricane Harvey Employee Retention Credit
Employers can be instantly reimbursed for the credit by decreasing the amount of payroll taxes they.