Lets talk first about Ppp Versus Employee Retention Credit :
Our team here what do these men doing everyone in this space is helping teach people about ERC and uh always provide a beautiful breakfast and have people really find out about the program we need to head to the space where we have the ability to display some of the checks that we are getting for business and I wish to see that what is this this is uh hundreds of countless dollars literally Kevin hundreds of millions of dollars so these are duplicate copies of the letters that go to clients verifying that the check is on the way I imply you know if you simply begin 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 simply I mean consider the number of actual clients 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 IRS heading to the customer so that’s how you have the ability to track it you know when you
receive this you know the check is chosen sure and that’s when they pay so they do not pay anything up until they in fact receive the cash they do not pay bottom line Wonder trust anything up until this letter is verified the check is on the method they deposit it into their bank account and they can truly trust Wonder trust that the procedure has been ended up and the number of you think you’ve processed because you started this we have to do with 35 000 of these for
about six billion dollars wow so clearly 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 discussing something actually important today the employee retention credit which the majority of you have actually never heard of I certainly hadn’t heard of it till extremely recently and found out a lot about it since this is most likely the lowest expense of capital for any small business anywhere
anytime if you have staff members between 5 and five hundred so I’ve got the professional with me this is Josh Fox he’s the creator and CEO of bottom line Principles they’re the largest processor of these ERC credits this is a 170 page program so it’s difficult this isn’t like PPP we just call your bank manager and state provide me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to tell 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 like this program it’s going away soon you got to find out everything about it let’s talk worker retention credit Josh Fox what is an ERC let’s just begin there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act used businesses 3 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 two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the cash money payroll tax refund fine go on sorry I simply have to make certain we got that point I mean that’s a big difference a loan versus cash cash I like money cash that’s what we’re speaking about okay 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 difficult check in the mail where you get actual cash from the IRS 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 worker retention credit that person needed to be an employee so I’m going to make the Presumption this cash is not for the owner not for individuals on the cap table not for investors it’s for workers right you had to have actually owned a service but it’s based on you having W-2 employees in America not 10.99. so as long as you had W-2 workers 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 first six months of 2021 on the W-2 proper 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 measured you need to be on the W-2 during that period now let’s talk my favorite part money how much can you return per staff member that was on a W-2 in those six quarters so the estimation in 2020 to be precise Kevin is 50 of the staff member’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 wage to an optimum of seven thousand per quarter how did that occur um they just changed the rules in.
2021 versus since the mayhem 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 create 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 since that’s a lot of money it is now there’s a caution here the PPP cash would have to be decreased from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would lower the 26 000 so what we’re seeing typically Kevin is if you took PPP cash someplace around 10 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 workers and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s big undoubtedly now the huge concern is why does nobody know about this due to the fact that appearance when I initially found out about this when I initially satisfied Josh you know I’ve got lots of investments in great deals of companies I’m a significant advocate for entrepreneurship in America and make numerous lots of financial investments in business owners of which lots of suffered through the pandemic when I first heard about this I called BS I don’t think it since 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 used them sensibly to stay alive during the pandemic so when I heard about this I stated nah it can’t be true but when I dug around I even contacted us to my politician buddies Governor Senators they didn’t know about it I suggest that’s how you understand that’s how false information is that there’s no information out there then a bunch of individuals 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 no one learn about the staff member retention credit you understand what’s fascinating you’re talking about the banks Kevin due to the fact that in the PPP loan procedure 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 nation 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 mayhem since keep in mind in the initial cares act you might refrain from doing both programs so if you had done PPP you might not do ERC in the original program and when they altered the law in 2021 the banks were not doing ERC since 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 actually he or she’s never ever 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 company your accountant no your accounting professional’s never ever done this before unless you have an account that went into this organization and bottom line my firm Kevin has actually stayed in business because 2009 and we have actually been dealing with the federal government and the state government to recuperate money for Fortune 500 Fortune 1000 business so a great deal of our huge big corporate customers have dealt with bottom line to recuperate other government programs we’ve done sales tax and utilize tax joblessness tax work chance tax credits research and development tax credits unclaimed home 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 motivate.
companies to keep workers on their payroll. The credit is 50% of up to $10,000 in earnings paid by an.
Because of COVID-19 or whose gross invoices, employer whose business is completely or partly suspended.
decline by more than 50%.
1. The credit is available to all companies no matter size consisting of tax exempt organizations. There are.
just two 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 meet one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s organization is fully or partly suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross invoices are listed below 50% of the similar quarter in 2019. When the.
company’s gross receipts exceed 80% of a similar quarter in 2019 they no longer certify.
after completion of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the certifying incomes paid up to $10,000 in overall.
It works for wages paid after March 13th and prior to December 31, 2020.
The definition of qualifying salaries varies by whether a company had, usually, more or less than.
100 employees in 2019.
Business that concentrate on ERC filing help usually supply expertise and support to assist companies navigate the complex process of declaring the credit. They can provide numerous services, including:.
How is the employee retention credit calculated? Ppp Versus Employee Retention Credit
Eligibility Evaluation: These companies will assess your business’s eligibility for the ERC based on factors such as your market, earnings, and operations. They can assist figure out if you meet the requirements for the credit and recognize the maximum credit amount you can declare.
Paperwork and Computation: ERC filing services will help in gathering the essential documentation, such as payroll records and monetary statements, to support your claim. They will also assist calculate the credit amount based upon qualified incomes and other qualifying expenses.
Retroactive Claim Review: If you are qualified to declare the ERC for previous quarters, these business can evaluate your past payroll records and financials to recognize prospective opportunities for retroactive credits. They can help you change prior income tax return to declare these refunds.
Filing Support: Business specializing in ERC filings will prepare and submit the necessary types and documentation in your place. This consists of completing Type 941 or any other required tax return.
Compliance and Updates: ERC regulations and assistance have developed gradually. These business remain updated with the current modifications and guarantee that your filings adhere to the most current standards. If the Internal revenue service demands extra details or conducts an audit associated to your ERC claim, they can also supply ongoing support.
It is very important to research and vet any company offering ERC filing help to ensure their trustworthiness and expertise. Search for established firms with experience in tax and payroll services, or think about reaching out to trusted accounting firms or tax specialists who provide ERC filing assistance.
Keep in mind that while these companies can supply important assistance, it’s constantly a good idea to have a fundamental 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 introduced by the U.S. federal government as part of COVID-19 relief procedures. The goal of the ERC is to motivate companies to maintain and pay their employees throughout the pandemic, even if their operations have actually been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to qualified employers, including for-profit businesses, tax-exempt organizations, and particular governmental entities. To qualify, companies should satisfy one of two criteria:.
Business operations were completely 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 decrease is specified as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decline in gross receipts compared to the very same quarter in 2019, or a 20% decline in gross invoices 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 portion (up to 70%) of qualified incomes paid to workers, consisting of specific health plan expenses. 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 a Paycheck Defense Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 enables businesses to claim the ERC even if they got a PPP loan. However, the exact same salaries can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively broadened and improved, allowing eligible companies to declare the credit for certified salaries paid as far back as March 13, 2020. This retroactive provision supplies a chance for services to modify prior-year tax returns and get refunds.
Declaring the Credit: Employers can declare the ERC by reporting it on their work tax returns, normally Kind 941. The excess can be reimbursed to the company if the credit exceeds the amount of work taxes owed.
It is essential to note that the ERC provisions and eligibility requirements have progressed over time. The best course of action is to talk to a tax professional or check out the official internal revenue service site for the most updated and in-depth details concerning the ERC, consisting of any recent legislative changes or updates.
To qualify for the ERC, a service must satisfy among the following requirements:.
The business operations were totally or partly suspended due to a federal government order related to COVID-19.
Business experienced a considerable decline in gross receipts. For 2021, a substantial decrease is specified as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross receipts compared to the right away preceding quarter.
The ERC is available to companies of all sizes, consisting of tax-exempt organizations, but there are some exceptions. Government entities and companies that received a PPP loan might have restrictions on declaring the credit.
The procedure for claiming the ERC includes finishing the needed kinds and including the credit on your employment tax return (typically Form 941). The exact time it takes to process the credit can vary based on a number of factors, consisting of the intricacy of your business and the work of the internal revenue service. It’s advised to speak with a tax professional for assistance particular to your scenario.
There are a number of business that can assist with the procedure of declaring the ERC. Some popular companies that provide assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the info provided here is based upon basic knowledge and may not reflect the most current updates or changes to the ERC. It is very important to consult with a tax professional or go to the main IRS site for the most accurate and current details relating to eligibility, declaring procedures, and readily available support.
Less than 100. The credit is based if the company had 100 or fewer employees on average in 2019.
on earnings paid to all workers whether they in fact worked or not. Simply put, even if the.
staff members worked full-time and got paid for full time work, the employer still gets the credit.
Greater than 100. If the company had more than 100 workers usually in 2019, then the credit is.
permitted only for incomes paid to staff members who did not work during the calendar quarter.
In both cases, “earnings” consists of not just money payments however also a part of the expense of employer.
provided health care. Ppp Versus Employee Retention Credit
Employers can be instantly reimbursed for the credit by minimizing the amount of payroll taxes they.