Lets talk first about Ppp Loan Employee Retention Credit :
Our team here what do these people doing everyone in this room is assisting teach individuals about ERC and uh constantly offer a beautiful breakfast and have people truly discover the program we ought to head to the space where we have the ability to show a few of the checks that we are getting for companies and I wish to see that what is this this is uh hundreds of millions of dollars actually Kevin hundreds of countless dollars so these are replicate copies of the letters that go to customers verifying that the check is on the method I suggest you understand if you simply begin to 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 simply I indicate think of how many real clients that went through the program yeah this is the very end this is the celebration at the end when the check is validated the numbers are verified 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 gone for sure which’s when they pay so they don’t pay anything until they actually receive the cash they don’t pay bottom line Wonder trust anything until this letter is validated the check is on the way they deposit 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’re about 35 000 of these for
about six billion dollars wow so clearly they know 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 Wonderful here you’re at my YouTube channel we’re discussing something truly essential today the worker retention credit which most of you have actually never ever heard of I definitely hadn’t become aware of it till really just recently and discovered a lot about it because this is probably the most affordable cost of capital for any small company anywhere
anytime if you have staff members in between five and five hundred so I have actually got the specialist with me this is Josh Fox he’s the creator and CEO of bottom line Concepts 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 contact your bank supervisor and state offer me a loan it does not 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 representative for this I love this program it’s going away soon you got to discover all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply start there so throughout the Trump Administration when President Trump was enacted they developed the cares Act and the cares act offered businesses three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everybody it makes a huge difference right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
fix the money cash payroll tax refund all right go on sorry I just need to make sure we got that point I suggest that’s a huge difference a loan versus cash cash I like money cash that’s what we’re discussing 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 original cares Act is the ERC and yes Kevin it is a lovely hard check in the mail where you get actual cash 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 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 investors it’s for staff members right you had to have actually owned a service but it’s based upon you having W-2 staff members 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 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 appropriate so there were six quarters the program was open well walk us through the six quarters so you had quarters two 3 and 4 of 2020 and you had quarters one two and 3 of 2021. all right so that’s how it’s measured you need to be on the W-2 throughout that period 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 precise Kevin is 50 of the worker’s income to a maximum of five 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 7 thousand per quarter how did that happen um they simply changed the rules in.
2021 versus since the chaos 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 as much as 5 thousand Max and after that what happens 21 000 Max in 2021 oh that’s how you come up with 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 money it is now there’s a caution here the PPP cash would have to be reduced from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would reduce the 26 000 so what we’re seeing typically Kevin is if you took PPP cash somewhere around ten thousand dollars a person so let’s say hypothetically you owned a restaurant in New York City where I’m from and you had a hundred staff members and you took PPP cash you would still get a million dollar in the mail from the IRS so it’s big obviously now the huge concern is why does no one learn about this because look when I initially heard about this when I initially fulfilled Josh you know I have actually got great deals of investments in lots of business I’m a major supporter for entrepreneurship in America and make lots of many financial investments in business owners of which lots of suffered through the pandemic when I first heard about this I called BS I do not think it due to the fact that I utilize the PPP we went through the money center Banks to get it it was very easy to do we had our CEOs call the banks they got their loans and that were well been worthy of and we used them sensibly to stay alive 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 called to my politician 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 likewise not true so let’s ask Josh why does no one know about the employee retention credit you know what’s interesting you’re talking about the banks Kevin since in the PPP loan process 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 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 simply process procedure that’s all um and here there was turmoil since remember in the initial cares act you could not do both programs so if you had done PPP you could not do ERC in the initial program and when they changed 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 made it clear to anybody about how to.
do this does your CFO know how to do this not actually she or he’s never done it before 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 business your accountant no your accountant’s never ever done this prior to unless you have an account that went into this service and bottom line my company Kevin has actually stayed in business because 2009 and we’ve been dealing with the federal government and the state federal government to recuperate cash for Fortune 500 Fortune 1000 companies so a lot of our huge big business customers have dealt with bottom line to recover other federal government programs we have actually done sales tax and utilize tax unemployment tax work opportunity tax credits research and development tax credits unclaimed property real estate tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit developed to motivate.
companies to keep staff members 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, company whose business is totally or partially suspended.
decrease by more than 50%.
1. The credit is available to all employers despite size including tax exempt companies. There are.
just two exceptions: (1) state and city governments and their instrumentalities and (2) little.
organizations who take Small Business Loans.
2. To qualify, the company has to fulfill one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s organization is completely or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are below 50% of the similar quarter in 2019. As soon as the.
company’s gross receipts exceed 80% of a similar 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 salaries paid up to $10,000 in overall.
It is effective for salaries paid after March 13th and before December 31, 2020.
The meaning of qualifying salaries varies by whether an employer had, usually, more or less than.
100 workers in 2019.
Companies that specialize in ERC filing assistance normally offer competence and assistance to help businesses browse the complex procedure of claiming the credit. They can provide different services, consisting of:.
How is the employee retention credit calculated? Ppp Loan Employee Retention Credit
Eligibility Evaluation: These business will examine your service’s eligibility for the ERC based upon factors such as your market, earnings, and operations. If you fulfill the requirements for the credit and determine the maximum credit amount you can declare, they can assist figure out.
Documentation and Calculation: ERC filing services will help in collecting the required paperwork, such as payroll records and financial statements, to support your claim. They will likewise help compute the credit quantity based on eligible incomes and other certifying expenses.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for previous quarters, these companies can review your previous payroll records and financials to determine potential opportunities for retroactive credits. They can help you modify previous income tax return to claim these refunds.
Filing Support: Companies concentrating on ERC filings will prepare and send the essential types and paperwork on your behalf. This includes finishing Type 941 or any other necessary tax return.
Compliance and Updates: ERC guidelines and guidance have progressed in time. These companies remain updated with the latest modifications and guarantee that your filings adhere to the most current guidelines. They can likewise supply continuous assistance if the IRS requests extra info or conducts an audit related to your ERC claim.
It’s important to research study and vet any business offering ERC filing help to ensure their trustworthiness and expertise. Try to find established firms with experience in tax and payroll services, or think about reaching out to relied on accounting firms or tax professionals who offer ERC submitting support.
Keep in mind that while these companies can supply important support, it’s constantly a good idea to have a fundamental understanding of the ERC requirements and procedure 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. federal government as part of COVID-19 relief procedures. The goal of the ERC is to motivate organizations to retain and pay their staff members throughout the pandemic, even if their operations have actually been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to eligible companies, consisting of for-profit businesses, tax-exempt organizations, and particular governmental entities. To qualify, employers must fulfill one of two requirements:.
Business operations were totally or partially suspended due to a government order related to COVID-19.
The business experienced a significant decrease in gross invoices. As mentioned earlier, for 2021, a significant decline is specified as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decline in gross invoices compared to the immediately 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 (approximately 70%) of certified salaries paid to workers, consisting of particular 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: Initially, organizations that got a Paycheck Security Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 allows organizations to declare the ERC even if they got a PPP loan. The exact same earnings can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively expanded and improved, allowing eligible employers to claim the credit for certified salaries paid as far back as March 13, 2020. This retroactive arrangement offers a chance for services to amend prior-year tax returns and get refunds.
Declaring the Credit: Employers can declare the ERC by reporting it on their work tax returns, generally Type 941. If the credit goes beyond the quantity of employment taxes owed, the excess can be reimbursed to the employer.
It’s important to keep in mind that the ERC provisions and eligibility criteria have evolved with time. The very best strategy is to seek advice from a tax expert or check out the main internal revenue service website for the most detailed and current info regarding the ERC, including any current legal changes or updates.
To receive the ERC, a service needs to satisfy among the following requirements:.
The business operations were totally or partly suspended due to a government order related to COVID-19.
The business experienced a substantial decline in gross receipts. For 2021, a significant decrease is specified as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
The ERC is readily available to organizations of all sizes, including tax-exempt organizations, but there are some exceptions. Federal government entities and services that got a PPP loan may have restrictions on claiming the credit.
The procedure for declaring the ERC includes finishing the needed forms and including the credit on your employment tax return (normally Form 941). The exact time it requires to process the credit can differ based on numerous elements, consisting of the intricacy of your service and the work of the IRS. It’s advised to speak with a tax professional for assistance specific to your situation.
There are numerous companies that can assist with the procedure of declaring the ERC. Some popular companies that provide help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the information provided here is based on basic understanding and may not reflect the most current updates or modifications to the ERC. It is essential to seek advice from a tax expert or visit the official internal revenue service site for the most current and accurate info concerning eligibility, claiming procedures, and available assistance.
Less than 100. The credit is based if the company had 100 or fewer employees on average in 2019.
on wages paid to all employees whether they really worked or not. Simply put, even if the.
workers worked full time and got paid for full time work, the company still gets the credit.
Greater than 100. If the employer had more than 100 workers usually in 2019, then the credit is.
allowed only for incomes paid to employees who did not work throughout the calendar quarter.
In both cases, “earnings” includes not just cash payments however likewise a portion of the cost of company.
offered healthcare. Ppp Loan Employee Retention Credit
Employers can be immediately compensated for the credit by reducing the amount of payroll taxes they.