Lets talk first about New Cares Act Employee Retention Credit :
Our team here what do these guys doing everyone in this room is helping teach people about ERC and uh constantly supply a gorgeous breakfast and have individuals really learn about the program we must 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 hundreds of countless dollars so these are duplicate copies of the letters that go to customers validating that the check is on the method I mean you know if you just begin to take a 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 verified and the check is on the mail in the mail from the internal revenue service heading to the client so that’s how you have the ability to track it you understand when you
get this you understand the check is chosen sure and that’s when they pay so they don’t pay anything up until they really get the money they don’t pay bottom line Wonder trust anything up until this letter is confirmed the check is on the method they deposit it into their bank account and they can genuinely trust Wonder trust that the process has been finished and the number of you believe you have actually processed given that you started this we’re about 35 000 of these for
about six billion dollars wow so clearly they understand what they’re doing and that’s what you need 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 Terrific here you’re at my YouTube channel we’re speaking about something truly essential today the worker retention credit which the majority of you have never become aware of I definitely had not become aware of it till really just recently and learned a lot about it since this is probably the most affordable cost of capital for any small company anywhere
anytime if you have workers in between 5 and five hundred so I have actually got the expert with me this is Josh Fox he’s the founder and CEO of bottom line Ideas they’re the biggest processor of these ERC credits this is a 170 page program so it’s hard this isn’t like PPP we just call your bank manager and state offer me a loan it doesn’t 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 ended up being yes the Ambassador and paid spokesperson for this I enjoy this program it’s going away very soon you got to learn all about it let’s talk worker retention credit Josh Fox what is an ERC let’s simply begin there so throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act provided services three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everyone it makes a big distinction right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the cash money payroll tax refund all right go on sorry I simply need to make sure we got that point I suggest that’s a huge distinction a loan versus cash money 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 beautiful difficult check in the mail where you get real money 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 worker retention credit that individual had to be a staff member so I’m going to make the Assumption this cash is not for the owner not for individuals on the cap table not for investors it’s for workers right you needed to have actually owned a service but it’s based upon you having W-2 employees in America not 10.99. As long as you had W-2 workers 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 proper so there were 6 quarters the program was open well stroll us through the six quarters so you had quarters two three and 4 of 2020 and you had quarters one 2 and 3 of 2021. fine so that’s how it’s determined you need to be on the W-2 throughout that duration now let’s talk my preferred part money how much can you get back 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 worker’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 employee’s salary to a maximum of seven thousand per quarter how did that happen um they simply altered the rules in.
2021 versus since the turmoil of the pandemic so they wanted 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 after that what happens 21 000 Max in 2021 oh that’s how you create 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 because that’s a great deal of money it is now there’s a caveat here the PPP money would have to be reduced 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 somewhere around 10 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 employees and you took PPP money you would still get a million dollar in the mail from the IRS so it’s big obviously now the big question is why does no one understand about this because appearance when I initially found out about this when I first satisfied Josh you understand I’ve got great deals of investments in lots of companies I’m a major advocate for entrepreneurship in America and make numerous numerous investments in entrepreneurs of which lots of suffered through the pandemic when I initially became aware of this I called BS I do not believe 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 and that were well should have and we utilized them carefully to survive throughout the pandemic so when I became aware of this I said nah it can’t be true however when I dug around I even called to my political leader good friends Guv Senators they didn’t learn about it I imply that’s how you know that’s how false information is that there’s no details out there then a lot of people informed 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 know about the staff member retention credit you know what’s intriguing you’re discussing the banks Kevin due to the fact that in the PPP loan process the federal government made it really clear that if you desired a PPP loan you would call Wells Fargo Citibank Bank of America any of the big banks in our nation and they would process process 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 turmoil due to the fact that keep in mind in the initial cares act you could not do both programs so if you had actually done PPP you might refrain from doing ERC in the original program and when they altered the law in 2021 the banks were not 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 anybody about how to.
do this does your CFO understand how to do this not really he or she’s never done it before do the banks do it nope the banks don’t do it the payroll companies yeah a few of them are doing it as a payroll business your accountant no your accountant’s never done this prior to unless you have an account that entered into this organization and bottom line my firm Kevin has actually stayed in business considering that 2009 and we’ve been working with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 companies so a lot of our big huge business customers have actually worked with bottom line to recover other federal government programs we’ve done sales tax and use tax unemployment tax work chance tax credits research and development tax credits unclaimed property real estate tax all of these other federal government programs.
The staff member retention tax credit is a broad based refundable tax credit developed to encourage.
companies 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 totally or partially suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
1. The credit is offered to all employers regardless of size including tax exempt organizations. There are.
just two exceptions: (1) state and city governments and their instrumentalities and (2) small.
services who take Small company Loans.
2. To certify, the company has to satisfy one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s business is fully or partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the equivalent quarter in 2019. When the.
employer’s gross invoices exceed 80% of a comparable 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 qualifying salaries paid up to $10,000 in total.
It works for wages paid after March 13th and before December 31, 2020.
The meaning of certifying incomes differs by whether an employer had, usually, basically than.
100 employees in 2019.
Business that focus on ERC filing assistance generally provide proficiency and assistance to assist organizations navigate the complicated procedure of declaring the credit. They can use various services, consisting of:.
How is the employee retention credit calculated? New Cares Act Employee Retention Credit
Eligibility Evaluation: These business will evaluate your service’s eligibility for the ERC based upon elements such as your market, income, and operations. They can help identify if you satisfy the requirements for the credit and recognize the maximum credit amount you can declare.
Documents and Estimation: ERC filing services will help in collecting the necessary documentation, such as payroll records and monetary declarations, to support your claim. They will likewise assist determine the credit quantity based on qualified wages and other certifying expenditures.
Retroactive Claim Review: If you are eligible to declare the ERC for previous quarters, these companies can examine your previous payroll records and financials to determine possible opportunities for retroactive credits. They can assist you change prior tax returns to declare these refunds.
Filing Assistance: Business concentrating on ERC filings will prepare and send the necessary kinds and documents on your behalf. This includes finishing Kind 941 or any other necessary tax forms.
Compliance and Updates: ERC guidelines and guidance have actually developed gradually. These business stay upgraded with the most recent changes and make sure that your filings adhere to the most existing guidelines. They can also supply ongoing assistance if the IRS demands extra info or performs an audit related to your ERC claim.
It’s important to research and veterinarian any company providing ERC filing help to guarantee their credibility and competence. Look for recognized firms with experience in tax and payroll services, or consider reaching out to relied on accounting companies or tax experts who use ERC submitting assistance.
Keep in mind that while these companies can supply valuable help, it’s constantly a great idea to have a standard understanding of the ERC requirements and process yourself. This will assist you make informed decisions and make sure accurate filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief steps. The objective of the ERC is to motivate companies to maintain and pay their workers throughout the pandemic, even if their operations have actually been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to eligible employers, including for-profit companies, tax-exempt companies, and particular governmental entities. To qualify, employers should fulfill one of two criteria:.
The business operations were fully or partly suspended due to a government order related to COVID-19.
The business experienced a considerable decrease in gross invoices. As pointed out earlier, for 2021, a substantial decrease is specified as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a significant 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.
Credit Amount: 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 (as much as 70%) of certified salaries paid to workers, including specific 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: At first, businesses that received an Income Security Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 enables companies to declare the ERC even if they received a PPP loan. Nevertheless, the exact same salaries can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and enhanced, enabling eligible employers to claim the credit for qualified earnings paid as far back as March 13, 2020. This retroactive provision supplies a chance for businesses to amend prior-year income tax return and get refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their employment tax returns, usually Kind 941. The excess can be refunded to the company if the credit goes beyond the quantity of work taxes owed.
It is necessary to keep in mind that the ERC arrangements and eligibility requirements have actually evolved with time. The best strategy is to consult with a tax expert or visit the official internal revenue service website for the most in-depth and updated info relating to the ERC, consisting of any recent legal modifications or updates.
To get approved for the ERC, a company must fulfill among the following requirements:.
The business operations were totally or partially suspended due to a federal government order related to COVID-19.
The business experienced a considerable decrease in gross invoices. For 2021, a significant decline 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 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.
The ERC is available to companies of all sizes, including tax-exempt companies, however there are some exceptions. For example, federal government entities and organizations that got a PPP loan might have restrictions on claiming the credit.
The process for declaring the ERC involves finishing the required forms and including the credit on your work tax return (generally Kind 941). The exact time it takes to process the credit can differ based upon numerous factors, consisting of the intricacy of your service and the work of the IRS. It’s advised to consult with a tax expert for guidance specific to your scenario.
There are a number of business that can help with the process of claiming the ERC. Some popular companies that provide help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the info offered here is based on basic understanding and might not show the most recent updates or changes to the ERC. It’s important to speak with a tax professional or visit the main internal revenue service site for the most precise and updated information relating to eligibility, declaring procedures, and offered support.
Less than 100. If the company had 100 or less employees usually in 2019, then the credit is based.
on wages paid to all staff members whether they in fact worked or not. Simply put, even if the.
workers worked full-time and made money for full-time work, the employer still gets the credit.
Greater than 100. If the company had more than 100 employees on average in 2019, then the credit is.
permitted just for wages paid to employees who did not work during the calendar quarter.
In both cases, “incomes” consists of not just cash payments however also a portion of the cost of employer.
supplied healthcare. New Cares Act Employee Retention Credit
Companies can be immediately reimbursed for the credit by reducing the quantity of payroll taxes they.