Lets talk first about Ppp Vs Employee Retention Credit :
Our team here what do these people doing everyone in this space is assisting teach people about ERC and uh constantly offer a beautiful breakfast and have people truly learn about the program we ought to head to the room where we have the ability to display some of the checks that we are getting for companies and I want to see that what is this this is uh hundreds of countless dollars literally Kevin numerous millions of dollars so these are duplicate copies of the letters that go to clients validating that the check is on the way I suggest you know if you simply start 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 indicate it’s simply I indicate think about the number of actual customers that went through the program yeah this is the very end this is the party at the end when the check is validated the numbers are verified and the check is on the mail in the mail from the internal revenue service heading to the customer so that’s how you’re able to track it you know when you
get this you know the check is opted for sure and that’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 confirmed the check is on the method they deposit it into their checking account and they can genuinely trust Wonder trust that the procedure has actually been ended up and how many you think you’ve processed since you started this we’re about 35 000 of these for
about six billion dollars wow so plainly they know what they’re doing which’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 essential today the employee retention credit which the majority of you have actually never heard of I definitely hadn’t heard of it until very just recently and found out a lot about it due to the fact that this is probably the most affordable cost of capital for any small company anywhere
anytime if you have staff members 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 Concepts they’re the biggest 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 manager 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 all of us about it and how to get it and why I have actually become yes the Ambassador and paid representative for this I love this program it’s going away soon you got to find out everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just start there so during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act provided services 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody it makes a big difference right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the money cash payroll tax refund alright go on sorry I just have to ensure we got that point I suggest that’s a big distinction a loan versus money cash 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 lovely hard check in the mail where you get actual money from the IRS all right so let’s discuss how it works because it seems like to me if it’s a if it’s employee retention credit that individual had to be an employee so I’m going to make the Presumption this cash is not for the owner not for people on the cap table not for investors it’s for staff members right you had to have actually owned a company but it’s based upon you having W-2 employees in America not 10.99. so as long as you had W-2 employees 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 right so there were six quarters the program was open well walk us through the 6 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 measured you need to be on the W-2 during that duration now let’s talk my preferred part cash 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 exact Kevin is 50 of the staff member’s income to a maximum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s income to an optimum of 7 thousand per quarter how did that take place um they just altered the rules in.
2021 versus because the turmoil of the pandemic so they wanted 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 as much as five thousand Max and after that what occurs 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 worker that is since that’s a great deal of cash it is now there’s a caveat 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 decrease the 26 000 so what we’re seeing typically Kevin is if you took PPP money somewhere around 10 thousand dollars a person so let’s state hypothetically you owned a dining establishment 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 huge obviously now the huge question is why does nobody understand about this since look when I initially heard about this when I first fulfilled Josh you understand I’ve got lots of financial investments in great deals of business I’m a significant advocate for entrepreneurship in America and make numerous many financial investments in entrepreneurs of which many suffered through the pandemic when I first found out about 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 very easy to do we had our CEOs call the banks they got their loans which were well been worthy of and we used them wisely to stay alive throughout the pandemic so when I found out about this I stated nah it can’t hold true however when I dug around I even called to my political leader pals Guv Senators they didn’t know about it I suggest that’s how you understand that’s how false information is that there’s no info out there then a bunch 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 understand about the worker retention credit you know what’s intriguing you’re speaking about the banks Kevin since in the PPP loan procedure the federal government made it extremely clear that if you desired a PPP loan you would call Wells Fargo Citibank Bank of America any of the big banks in our country 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 due to the fact that remember in the initial cares act you might not do both programs so if you had actually done PPP you could refrain from doing ERC in the original program and when they changed 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 made it clear to anybody about how to.
do this does your CFO understand how to do this not truly she or he’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 business your accounting professional no your accounting professional’s never ever done this prior to unless you have an account that went into this business and bottom line my firm Kevin has been in business since 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 huge big business clients have actually worked with bottom line to recover other government programs we’ve done sales tax and utilize tax unemployment tax work opportunity tax credits research and development tax credits unclaimed home property tax all of these other federal government programs.
The worker retention tax credit is a broad based refundable tax credit developed to motivate.
companies to keep employees on their payroll. The credit is 50% of as much as $10,000 in incomes paid by an.
Due to the fact that of COVID-19 or whose gross receipts, company whose business is completely or partly suspended.
decline by more than 50%.
1. The credit is available to all employers despite size consisting of tax exempt companies. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
companies who take Small company Loans.
2. To qualify, the company needs to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s business is fully or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross receipts are below 50% of the comparable quarter in 2019. When the.
employer’s gross receipts exceed 80% of an equivalent quarter in 2019 they no longer certify.
after the end of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the qualifying salaries paid up to $10,000 in overall.
It works for incomes paid after March 13th and before December 31, 2020.
The definition of certifying salaries varies by whether a company had, usually, more or less than.
100 staff members in 2019.
Business that concentrate on ERC filing assistance normally offer expertise and assistance to help organizations browse the complicated procedure of claiming the credit. They can offer numerous services, including:.
How is the employee retention credit calculated? Ppp Vs Employee Retention Credit
Eligibility Assessment: These companies will assess your service’s eligibility for the ERC based upon aspects such as your industry, earnings, and operations. They can assist determine if you fulfill the requirements for the credit and identify the maximum credit amount you can claim.
Paperwork and Estimation: ERC filing services will help in gathering the needed documentation, such as payroll records and monetary statements, to support your claim. They will also assist determine the credit quantity based on qualified wages and other certifying expenses.
Retroactive Claim Review: If you are eligible to claim the ERC for previous quarters, these business can evaluate your past payroll records and financials to identify potential opportunities for retroactive credits. They can help you modify previous tax returns to declare these refunds.
Filing Support: Companies focusing on ERC filings will prepare and send the required types and documents on your behalf. This consists of finishing Type 941 or any other required tax return.
Compliance and Updates: ERC guidelines and guidance have developed with time. These business remain updated with the current changes and guarantee that your filings comply with the most existing guidelines. They can likewise provide ongoing assistance if the IRS demands additional information or carries out an audit related to your ERC claim.
It is very important to research and vet any business offering ERC filing assistance to guarantee their trustworthiness and knowledge. Try to find established firms with experience in tax and payroll services, or consider connecting to relied on accounting firms or tax experts who use ERC submitting support.
Remember that while these business can supply important assistance, it’s always a good idea to have a basic understanding of the ERC requirements and process yourself. This will assist you make informed decisions and guarantee 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 encourage companies to maintain and pay their staff members throughout the pandemic, even if their operations have actually been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is available to qualified companies, including for-profit organizations, tax-exempt organizations, and certain governmental entities. To qualify, companies must fulfill one of two requirements:.
The business operations were fully or partially suspended due to a government order related to COVID-19.
The business experienced a significant decrease in gross invoices. As pointed out earlier, for 2021, a considerable decrease is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019, or a 20% decline in gross invoices 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 is equal to a portion (approximately 70%) of qualified wages paid to employees, including certain health plan expenditures. The optimum credit per staff member is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, services that received a Paycheck Defense Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 permits businesses to declare the ERC even if they received a PPP loan. The 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 enhanced, permitting eligible employers to declare the credit for certified incomes paid as far back as March 13, 2020. This retroactive provision offers a chance for companies to amend prior-year income tax return and receive refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their employment tax returns, usually Form 941. If the credit exceeds the quantity of work taxes owed, the excess can be reimbursed to the company.
It is very important to note that the ERC arrangements and eligibility requirements have progressed in time. The best strategy is to speak with a tax expert or check out the official IRS website for the most detailed and current details regarding the ERC, consisting of any current legal modifications or updates.
To qualify for the ERC, a company needs to satisfy one of 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 receipts. For 2021, a significant decrease is defined as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
The ERC is available to companies of all sizes, including tax-exempt organizations, however there are some exceptions. Government entities and organizations that received a PPP loan might have restrictions on declaring the credit.
The procedure for declaring the ERC involves completing the necessary forms and including the credit on your employment tax return (typically Form 941). The exact time it takes to process the credit can differ based on a number of aspects, consisting of the complexity of your company and the workload of the internal revenue service. It’s recommended to seek advice from a tax expert for assistance specific to your circumstance.
There are a number of business that can help with the process of claiming the ERC. These include accounting companies, tax advisory services, and payroll company. Some popular business that provide help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research study and call these companies straight to inquire about their services and charges.
Please note that the information provided here is based upon basic knowledge and might not show the most current updates or changes to the ERC. It is very important to consult with a tax expert or visit the official internal revenue service website for the most updated and precise info concerning eligibility, claiming procedures, and available help.
Less than 100. If the employer had 100 or fewer staff members typically in 2019, then the credit is based.
on earnings paid to all staff members whether they actually worked or not. In other words, even if the.
employees worked full-time and got paid for full-time work, the employer still gets the credit.
Greater than 100. The credit is if the company had more than 100 staff members on average in 2019.
enabled just for wages paid to workers who did not work during the calendar quarter.
In both cases, “earnings” consists of not just money payments but likewise a portion of the expense of company.
provided healthcare. Ppp Vs Employee Retention Credit
Companies can be immediately compensated for the credit by lowering the amount of payroll taxes they.