Lets talk first about New Rules For Employee Retention Credit :
Our team here what do these guys doing everybody in this room is assisting teach people about ERC and uh always provide a stunning breakfast and have individuals actually find out about the program we ought to head to the room where we are able to show some of the checks that we are getting for business and I ‘d like to see that what is this this is uh hundreds of countless 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 way I imply you understand if you just start 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 imply it’s just I imply think about how many actual customers that went through the program yeah this is the very end this is the party at the end when the check is confirmed the numbers are validated and the check is on the mail in the mail from the IRS heading to the consumer so that’s how you have the ability to track it you understand when you
receive this you know the check is opted for sure which’s when they pay so they don’t pay anything till they actually receive the cash they don’t pay bottom line Wonder trust anything until this letter is confirmed the check is on the method they deposit it into their checking account and they can genuinely rely on Wonder trust that the procedure has actually been ended up and the number of you believe you’ve processed because you started this we’re about 35 000 of these for
about 6 billion dollars wow so clearly they know 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 one of these that’s what matters all right Mr Terrific here you’re at my YouTube channel we’re talking about something truly crucial today the staff member retention credit which most of you have never heard of I certainly had not heard of it until really recently and learned a lot about it since this is probably the most affordable cost of capital for any small business anywhere
anytime if you have employees between 5 and five hundred so I have actually got the specialist with me this is Josh Fox he’s the founder and CEO of bottom line Concepts they’re the largest processor of these ERC credits this is a 170 page program so it’s challenging this isn’t like PPP we just call up your bank supervisor and say give 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’ve ended up being yes the Ambassador and paid spokesperson for this I enjoy this program it’s disappearing very soon you got to find out everything 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 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 nearly everyone it makes a big distinction right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
remedy the cash cash payroll tax refund alright go on sorry I simply need to make certain we got that point I suggest that’s a huge distinction a loan versus money cash I like cash money that’s what we’re speaking about fine 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 stunning tough 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 seems like to me if it’s a if it’s staff member retention credit that person needed to be an employee 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 needed to have actually owned a company however it’s based upon 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 qualified so you need to be on payroll in 2020 on the W-2 and you need to be on payroll for the first 6 months of 2021 on the W-2 right so there were 6 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 three of 2021. fine so that’s how it’s measured you need to be on the W-2 during that duration now let’s talk my favorite part cash just how much can you get back per worker that was on a W-2 in those six quarters so the computation in 2020 to be specific Kevin is 50 of the employee’s income to a maximum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the employee’s wage to a maximum of 7 thousand per quarter how did that happen um they simply changed the rules in.
2021 versus due to the fact that the chaos of the pandemic so they wished 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 as much as 5 thousand Max and after that what happens 21 000 Max in 2021 oh that’s how you develop twenty 6 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 because that’s a lot of money it is now there’s a caveat here the PPP money would have to be lowered 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 usually 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 IRS so it’s big obviously now the huge question is why does nobody learn about this since look when I initially heard about this when I first met Josh you know I have actually got lots of investments in great deals of companies I’m a significant supporter for entrepreneurship in America and make lots of lots of investments in business owners of which lots of suffered through the pandemic when I initially heard about this I called BS I don’t believe 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 should have and we used them carefully to stay alive during the pandemic so when I heard about this I stated nah it can’t hold true but when I dug around I even contacted us to my politician pals Governor Senators they didn’t know about it I mean that’s how you understand that’s how misinformation is that there’s no information out there then a lot of people informed me well you can’t get it since you took the PPP also not true so let’s ask Josh why does no one learn about the worker retention credit you know what’s interesting you’re speaking about 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 simply procedure process that’s all um and here there was chaos since remember in the original cares act you could not do both programs so if you had actually done PPP you might not do ERC in the original 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 anyone about how to.
do this does your CFO understand how to do this not truly she or he’s never ever done it previously do the banks do it nope the banks do not do it the payroll companies yeah some of them are doing it as a payroll company your accountant no your accounting professional’s never done this before unless you have an account that went into this business and bottom line my firm Kevin has actually stayed in business given that 2009 and we have actually been dealing with the federal government and the state government to recuperate money for Fortune 500 Fortune 1000 companies so a lot of our huge huge corporate customers have actually worked with bottom line to recuperate other federal government programs we’ve done sales tax and utilize tax unemployment tax work chance tax credits research and development tax credits unclaimed home real estate tax all of these other government programs.
The staff member retention tax credit is a broad based refundable tax credit developed to encourage.
companies to keep workers on their payroll. The credit is 50% of approximately $10,000 in incomes paid by an.
Due to the fact that of COVID-19 or whose gross receipts, company whose company is fully or partially suspended.
decrease by more than 50%.
1. The credit is available to all employers despite size including tax exempt companies. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) little.
companies who take Small Business Loans.
2. To certify, the employer needs to satisfy one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s business is fully or partially suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are listed below 50% of the equivalent quarter in 2019. As soon as the.
company’s gross invoices exceed 80% of an equivalent quarter in 2019 they no longer qualify.
after the end of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the certifying wages paid up to $10,000 in overall.
It is effective for salaries paid after March 13th and before December 31, 2020.
The definition of qualifying wages differs by whether an employer had, typically, basically than.
100 workers in 2019.
Companies that specialize in ERC filing help normally offer competence and support to help organizations navigate the complex procedure of declaring the credit. They can provide various services, including:.
How is the employee retention credit calculated? New Rules For Employee Retention Credit
Eligibility Assessment: These companies will examine your company’s eligibility for the ERC based on elements such as your industry, profits, and operations. If you meet the requirements for the credit and recognize the maximum credit quantity you can claim, they can assist identify.
Documents and Computation: ERC filing services will help in gathering the necessary paperwork, such as payroll records and financial declarations, to support your claim. They will also assist calculate the credit amount based on qualified wages and other certifying expenses.
Retroactive Claim Review: If you are eligible to declare the ERC for previous quarters, these business can evaluate your previous payroll records and financials to determine possible opportunities for retroactive credits. They can help you amend previous income tax return to claim these refunds.
Filing Assistance: Business specializing in ERC filings will prepare and submit the essential kinds and documents on your behalf. This includes finishing Kind 941 or any other required tax return.
Compliance and Updates: ERC policies and guidance have evolved with time. These business stay updated with the current modifications and guarantee that your filings adhere to the most current standards. If the IRS requests additional details or performs an audit associated to your ERC claim, they can also provide ongoing support.
It’s important to research and vet any company providing ERC filing help to guarantee their trustworthiness and competence. Try to find recognized firms with experience in tax and payroll services, or consider reaching out to relied on accounting firms or tax experts who offer ERC filing support.
Remember that while these business can supply valuable assistance, it’s constantly a good concept to have a basic understanding of the ERC requirements and process yourself. This will assist you make notified decisions and ensure precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief measures. The objective of the ERC is to encourage companies to keep 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 available to eligible companies, including for-profit companies, tax-exempt companies, and particular governmental entities. To certify, employers must meet one of two criteria:.
The business operations were completely or partially suspended due to a federal government order related to COVID-19.
The business experienced a significant decline in gross invoices. As pointed out previously, for 2021, a significant 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 specified as a 20% decline 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 Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit amount amounts to a percentage (up to 70%) of certified salaries paid to employees, consisting of specific health plan costs. The maximum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, companies that got an Income Protection Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 permits businesses to claim the ERC even if they received a PPP loan. The very same salaries can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and enhanced, enabling qualified employers to claim the credit for certified salaries paid as far back as March 13, 2020. This retroactive arrangement supplies a chance for services to modify prior-year income tax return and receive refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their work tax returns, typically Form 941. The excess can be refunded to the employer if the credit exceeds the quantity of employment taxes owed.
It is very important to keep in mind that the ERC provisions and eligibility criteria have developed with time. The best course of action is to seek advice from a tax expert or check out the main internal revenue service website for the most current and detailed info concerning the ERC, including any current legislative changes or updates.
To get approved for the ERC, a business must fulfill among the following criteria:.
The business operations were fully or partially suspended due to a federal government order related to COVID-19.
Business experienced a significant decrease in gross invoices. For 2021, a significant 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% decline in gross receipts compared to the very same quarter in 2019, or a 20% decline in gross receipts compared to the instantly preceding quarter.
The ERC is offered to services of all sizes, consisting of tax-exempt companies, but there are some exceptions. For instance, federal government entities and businesses that received a PPP loan may have limitations on claiming the credit.
The process for declaring the ERC includes finishing the needed kinds and consisting of the credit on your employment tax return (typically Type 941). The exact time it requires to process the credit can vary based on several aspects, including the complexity of your service and the work of the internal revenue service. It’s suggested to talk to a tax professional for guidance particular to your circumstance.
There are numerous companies that can help with the process of claiming the ERC. Some well-known companies that offer assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the info offered here is based upon basic understanding and might not show the most recent updates or changes to the ERC. It is essential to seek advice from a tax professional or check out the main IRS site for the most updated and precise details relating to eligibility, declaring treatments, and available support.
Less than 100. If the company had 100 or less workers on average in 2019, then the credit is based.
on incomes paid to all workers whether they actually worked or not. Simply put, even if the.
employees worked full-time and made money for full time work, the company still gets the credit.
Greater than 100. The credit is if the company had more than 100 staff members on average in 2019.
permitted only for salaries paid to workers who did not work throughout the calendar quarter.
In both cases, “salaries” includes not just cash payments but likewise a portion of the expense of employer.
supplied healthcare. New Rules For Employee Retention Credit
Employers can be immediately repaid for the credit by reducing the amount of payroll taxes they.