Lets talk first about Hurricane Katrina Employee Retention Credit :
Our group here what do these guys doing everyone in this space is helping teach individuals about ERC and uh always offer a gorgeous breakfast and have individuals truly learn about the program we must head to the room where we have the ability 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 numerous 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 imply you know if you just begin to look at some of these here I indicate this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s simply I mean consider the number of actual customers that went through the program yeah this is the very end this is the celebration 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
receive this you know the check is opted for sure which’s when they pay so they do not pay anything until they really receive the money they don’t pay bottom line Wonder trust anything till this letter is verified the check is on the way they transfer it into their checking account and they can truly rely on Wonder trust that the procedure has actually been finished and how many you believe you’ve processed since you started this we have to do with 35 000 of these for
about 6 billion dollars wow so plainly they understand what they’re doing which’s what you need 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 Terrific here you’re at my YouTube channel we’re speaking about something actually important today the worker retention credit which most of you have never heard of I certainly hadn’t become aware of it till really just recently and discovered a lot about it due to the fact that this is most likely the lowest expense of capital for any small company anywhere
anytime if you have employees between 5 and five hundred so I’ve got the specialist with me this is Josh Fox he’s the creator and CEO of bottom line Principles 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 phone 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 have actually ended up being yes the Ambassador and paid representative for this I love this program it’s disappearing very soon you got to learn all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply start there so during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act offered companies 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone 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 cash money payroll tax refund fine go on sorry I just need to ensure we got that point I mean that’s a huge difference a loan versus money money I like money money 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 gorgeous hard check in the mail where you get real money from the internal revenue service all right so let’s speak about how it works due to the fact that it sounds like to me if it’s a if it’s staff member retention credit that individual needed to be a worker so I’m going to make the Assumption this money is not for the owner not for people on the cap table not for shareholders it’s for employees right you had to have owned a business but it’s based on you having W-2 workers in America not 10.99. so as long as you had W-2 staff members 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 right so there were six quarters the program was open well walk us through the 6 quarters so you had quarters 2 three and four of 2020 and you had quarters one two and 3 of 2021. alright so that’s how it’s measured you need to be on the W-2 during that period now let’s talk my favorite part cash just how much can you get back per employee that was on a W-2 in those six quarters so the calculation in 2020 to be exact Kevin is 50 of the employee’s wage to a maximum of 5 thousand dollars per employee 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 take place um they just altered the rules in.
2021 versus because the mayhem of the pandemic so they wished to even get more to keep those workers on payroll 100 so if you can get 5 000 per person Max in twenty that was 50 in 2020 approximately 5 thousand Max and after that what occurs 21 000 Max in 2021 oh that’s how you come up with twenty 6 thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty six thousand dollars per employee that is because that’s a great deal of money it is now there’s a caution here the PPP money would need to be minimized from the twenty six 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 10 thousand dollars an individual so let’s state hypothetically you owned a dining establishment in New York 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 substantial obviously now the huge concern is why does no one learn about this since appearance when I first found out about this when I initially satisfied Josh you understand I’ve got lots of financial investments in great deals of companies I’m a significant advocate for entrepreneurship in America and make numerous many investments in entrepreneurs of which many suffered through the pandemic when I initially 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 cash center Banks to get it it was extremely easy to do we had our CEOs call the banks they got their loans and that were well deserved and we utilized them wisely to stay alive during the pandemic so when I became aware of this I stated nah it can’t hold true however when I dug around I even called to my politician pals 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 individuals told me well you can’t get it due to the fact that you took the PPP likewise not real so let’s ask Josh why does nobody learn about the worker retention credit you understand what’s intriguing you’re discussing the banks Kevin since in the PPP loan procedure the federal government made it extremely 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 procedure that’s all um and here there was turmoil because keep in mind in the original cares act you might not do both programs so if you had actually done PPP you could not do 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 federal government never ever made it clear to any person about how to.
do this does your CFO know 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 business your accounting professional no your accountant’s never done this prior to unless you have an account that entered into this business and bottom line my firm Kevin has actually been in business since 2009 and we’ve been dealing with the federal government and the state government to recuperate money for Fortune 500 Fortune 1000 business so a lot of our huge huge corporate customers have actually worked with bottom line to recover other government programs we’ve done sales tax and utilize tax joblessness tax work chance tax credits research and development tax credits unclaimed home property tax all of these other government programs.
The staff member retention tax credit is a broad based refundable tax credit designed to motivate.
employers to keep staff members on their payroll. The credit is 50% of up to $10,000 in incomes paid by an.
company whose organization is completely or partially suspended because of COVID-19 or whose gross invoices.
decrease by more than 50%.
Schedule.
1. The credit is offered to all companies no matter size including tax exempt organizations. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) little.
organizations who take Small company Loans.
2. To certify, the employer has to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s company is fully or partly suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross receipts are below 50% of the equivalent quarter in 2019. Once the.
employer’s gross receipts exceed 80% of a similar quarter in 2019 they no longer qualify.
after completion of that quarter.
Computation of the Credit.
The quantity of the credit is 50% of the qualifying salaries paid up to $10,000 in total.
It is effective for wages paid after March 13th and before December 31, 2020.
The definition of qualifying wages varies by whether a company had, on average, more or less than.
100 workers in 2019.
Companies that specialize in ERC filing assistance generally provide know-how and support to assist companies navigate the complicated process of claiming the credit. They can offer different services, including:.
How is the employee retention credit calculated? Hurricane Katrina Employee Retention Credit
Eligibility Evaluation: These business will assess your business’s eligibility for the ERC based upon aspects such as your industry, earnings, and operations. They can assist figure out if you meet the requirements for the credit and determine the optimum credit quantity you can claim.
Documents and Calculation: ERC filing services will help in collecting the necessary documents, such as payroll records and financial statements, to support your claim. They will also assist calculate the credit amount based upon qualified salaries and other certifying expenses.
Retroactive Claim Review: If you are eligible to declare the ERC for prior quarters, these business can evaluate your past payroll records and financials to determine potential chances for retroactive credits. They can help you amend prior income tax return to declare these refunds.
Filing Help: Companies concentrating on ERC filings will prepare and submit the essential forms and paperwork in your place. This includes completing Kind 941 or any other required tax forms.
Compliance and Updates: ERC regulations and guidance have actually developed gradually. These business remain upgraded with the most recent modifications and guarantee that your filings adhere to the most current guidelines. They can likewise offer continuous assistance if the IRS requests additional details or carries out an audit related to your ERC claim.
It’s important to research and veterinarian any business offering ERC filing assistance to ensure their credibility and know-how. Look for established companies with experience in tax and payroll services, or consider connecting to relied on accounting firms or tax professionals who provide ERC submitting assistance.
Keep in mind that while these business can supply valuable assistance, it’s constantly an excellent 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 Staff Member Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief steps. The goal of the ERC is to encourage businesses to maintain and pay their staff members throughout the pandemic, even if their operations have been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to eligible companies, including for-profit organizations, tax-exempt companies, and certain governmental entities. To qualify, companies should meet one of two criteria:.
The business operations were completely or partly suspended due to a government order related to COVID-19.
The business experienced a considerable decline in gross receipts. As mentioned previously, for 2021, a substantial decrease is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a significant decrease 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.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity amounts to a percentage (as much as 70%) of certified incomes paid to workers, including certain health insurance costs. 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, companies that got a Paycheck Protection Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 enables services to declare the ERC even if they received a PPP loan. The exact same incomes can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively broadened and improved, enabling qualified companies to claim the credit for qualified wages paid as far back as March 13, 2020. This retroactive provision offers an opportunity for organizations to change prior-year income tax return and receive refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their work tax returns, generally Type 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 criteria have evolved in time. The very best course of action is to speak with a tax professional or check out the official internal revenue service website for the most comprehensive and updated information relating to the ERC, consisting of any current legislative modifications or updates.
To qualify for the ERC, a company should meet among the following requirements:.
Business operations were completely or partly suspended due to a government order related to COVID-19.
The business experienced a significant decline in gross invoices. For 2021, a substantial decrease is specified as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decline in gross invoices compared to the very same quarter in 2019, or a 20% decline in gross invoices compared to the instantly preceding quarter.
The ERC is offered to services of all sizes, including tax-exempt companies, but there are some exceptions. Federal government entities and businesses that received a PPP loan may have restrictions on declaring the credit.
The process for claiming the ERC involves completing the needed kinds and including the credit on your employment income tax return (normally Type 941). The exact time it takes to process the credit can vary based on a number of aspects, including the complexity of your service and the work of the IRS. It’s advised to seek advice from a tax expert for assistance particular to your circumstance.
There are numerous business that can help with the process of claiming the ERC. Some popular companies that use help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the details offered here is based on general knowledge and might not reflect the most current updates or modifications to the ERC. It’s important to seek advice from a tax expert or check out the main IRS site for the most current and precise info regarding eligibility, declaring treatments, and available help.
Less than 100. The credit is based if the employer had 100 or fewer workers on average in 2019.
on earnings paid to all employees whether they actually worked or not. To put it simply, even if the.
workers worked full time and earned money for full time work, the company still gets the credit.
Greater than 100. If the employer had more than 100 staff members typically in 2019, then the credit is.
permitted just for salaries paid to workers who did not work throughout the calendar quarter.
In both cases, “earnings” includes not simply money payments but likewise a part of the cost of employer.
supplied health care. Hurricane Katrina Employee Retention Credit
Payment.
Companies can be immediately repaid for the credit by reducing the amount of payroll taxes they.