Lets talk first about Qualified Health Plan Expenses For The Employee Retention Credit :
Our group here what do these men doing everybody in this room is assisting teach people about ERC and uh constantly offer a gorgeous breakfast and have individuals actually learn more about the program we need to head to the space where we are able 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 millions of dollars actually Kevin numerous millions of dollars so these are replicate copies of the letters that go to customers validating that the check is on the method I indicate 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 mean it’s just I suggest think of the number of real clients 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 confirmed and the check is on the mail in the mail from the internal revenue service heading to the customer so that’s how you have the ability to track it you understand when you
receive this you understand the check is gone for sure and that’s when they pay so they don’t pay anything till they really receive the cash they do not pay bottom line Wonder trust anything until this letter is validated the check is on the method they transfer it into their savings 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 given that you began this we’re about 35 000 of these for
about six billion dollars wow so clearly they understand what they’re doing which’s what you require you require 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 really essential today the staff member retention credit which most of you have never ever become aware of I certainly hadn’t heard of it till very just recently and found out a lot about it due to the fact that this is most likely the most affordable cost of capital for any small business anywhere
anytime if you have employees between 5 and five hundred so I’ve got the professional 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 hard this isn’t like PPP we just call your bank manager and say provide 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’ve ended up being yes the Ambassador and paid spokesperson for this I like this program it’s going away soon you got to learn everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply start there so during the Trump Administration when President Trump was enacted they created 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 almost everyone it makes a huge distinction right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
remedy the money cash payroll tax refund all right go on sorry I simply have to make sure we got that point I suggest that’s a big difference a loan versus cash cash I like money money 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 stunning difficult check in the mail where you get actual money from the IRS all right so let’s discuss how it works since it sounds like to me if it’s a if it’s worker 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 shareholders it’s for staff members right you had to have actually owned a company but it’s based upon you having W-2 staff members 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 have 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 6 quarters the program was open well walk us through the six quarters so you had quarters two 3 and four of 2020 and you had quarters one 2 and 3 of 2021. all right so that’s how it’s measured you have to be on the W-2 throughout that period now let’s talk my favorite 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 precise Kevin is 50 of the staff member’s wage to a maximum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers increased to 70 of the worker’s salary to an optimum of seven thousand per quarter how did that happen um they simply altered the rules in.
2021 versus because 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 occurs 21 000 Max in 2021 oh that’s how you come up with twenty 6 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 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 two you would lower the 26 000 so what we’re seeing usually Kevin is if you took PPP money somewhere around 10 thousand dollars a person so let’s say hypothetically you owned a restaurant in New york city City where I’m from and you had a hundred employees and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s huge clearly now the big concern is why does no one learn about this due to the fact that look when I first became aware of this when I first satisfied Josh you know I’ve got lots of investments in lots of companies I’m a significant supporter for entrepreneurship in America and make many many financial investments in business owners of which numerous suffered through the pandemic when I initially heard about this I called BS I don’t believe it since I utilize the PPP we went through the money center Banks to get it it was really easy to do we had our CEOs call the banks they got their loans and that were well deserved and we used them carefully to survive during the pandemic so when I became aware of this I said nah it can’t hold true but when I dug around I even called to my political leader buddies Governor Senators they didn’t understand about it I suggest that’s how you understand that’s how misinformation is that there’s no information out there then a lot of individuals 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 staff member retention credit you know what’s fascinating you’re talking about the banks Kevin because in the PPP loan procedure the federal government made it extremely clear that if you wanted 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 just process process that’s all um and here there was mayhem since keep in mind in the initial cares act you could refrain from doing 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 not doing ERC due to the fact that it’s not alone so you’re getting a tax refund so the government never made it clear to anybody about how to.
do this does your CFO understand how to do this not really she or he’s never done it previously do the banks do it nope the banks do not do it the payroll companies yeah a few of them are doing it as a payroll company your accounting professional no your accountant’s never ever done this before unless you have an account that entered into this company and bottom line my firm Kevin has been in business considering that 2009 and we’ve been working with the federal government and the state federal government to recover cash for Fortune 500 Fortune 1000 business so a great deal of our huge big corporate customers have worked with bottom line to recuperate 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 federal government programs.
The worker retention tax credit is a broad based refundable tax credit created to encourage.
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 invoices, company whose service is completely or partly suspended.
decrease by more than 50%.
1. The credit is offered to all companies despite size consisting of tax exempt companies. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
organizations who take Small company Loans.
2. To qualify, the company has to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s company is fully or partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross invoices are listed below 50% of the equivalent quarter in 2019. When the.
employer’s gross invoices exceed 80% of a similar quarter in 2019 they no longer qualify.
after completion 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 incomes paid after March 13th and before December 31, 2020.
The meaning of certifying earnings varies by whether an employer had, on average, basically than.
100 workers in 2019.
Companies that focus on ERC filing support generally provide proficiency and assistance to assist businesses navigate the complicated procedure of claiming the credit. They can offer different services, consisting of:.
How is the employee retention credit calculated? Qualified Health Plan Expenses For The Employee Retention Credit
Eligibility Evaluation: These business will assess your organization’s eligibility for the ERC based on elements such as your industry, revenue, and operations. They can help determine if you fulfill the requirements for the credit and identify the optimum credit quantity you can claim.
Documentation and Computation: ERC filing services will help in gathering the required documents, such as payroll records and financial statements, to support your claim. They will also assist determine the credit amount based upon eligible wages and other qualifying costs.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for prior quarters, these business can review your previous payroll records and financials to identify prospective chances for retroactive credits. They can help you amend previous income tax return to claim these refunds.
Filing Assistance: Companies specializing in ERC filings will prepare and send the essential types and documents in your place. This consists of completing Form 941 or any other necessary tax return.
Compliance and Updates: ERC regulations and guidance have actually progressed in time. These business remain updated with the most recent changes and guarantee that your filings comply with the most present guidelines. They can also offer ongoing assistance if the internal revenue service requests additional details or carries out an audit related to your ERC claim.
It is essential to research and veterinarian any business providing ERC filing assistance to ensure their credibility and know-how. Try to find established firms with experience in tax and payroll services, or think about reaching out to trusted accounting firms or tax experts who use ERC filing support.
Remember that while these business can offer valuable support, it’s constantly an excellent concept to have a fundamental understanding of the ERC requirements and process yourself. This will help you make notified choices and guarantee 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 objective of the ERC is to motivate services to keep and pay their workers throughout the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to eligible companies, including for-profit services, tax-exempt companies, and specific governmental entities. To certify, companies need to meet one of two criteria:.
Business operations were fully or partially suspended due to a government order related to COVID-19.
The business experienced a considerable decrease in gross receipts. As discussed previously, for 2021, a significant decrease is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit quantity is equal to a portion (as much as 70%) of qualified wages paid to staff members, consisting of certain health insurance 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, businesses that received a Paycheck Security Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 enables companies to declare the ERC even if they received a PPP loan. However, the same earnings can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively broadened and enhanced, allowing qualified companies to declare the credit for certified wages paid as far back as March 13, 2020. This retroactive provision offers a chance for companies to modify prior-year income tax return and receive refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their work income tax return, normally Form 941. If the credit exceeds the quantity of work taxes owed, the excess can be reimbursed to the employer.
It is necessary to keep in mind that the ERC provisions and eligibility requirements have actually developed gradually. The very best strategy is to talk to a tax professional or check out the main internal revenue service site for the most updated and detailed information relating to the ERC, including any current legal modifications or updates.
To get approved for the ERC, an organization must fulfill among the following criteria:.
The business operations were totally or partly suspended due to a government order related to COVID-19.
The business experienced a considerable decrease in gross receipts. For 2021, a considerable decline is defined as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a substantial decline is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross receipts compared to the right away preceding quarter.
The ERC is available to services of all sizes, including tax-exempt companies, but there are some exceptions. Federal government entities and companies that received a PPP loan may have restrictions on declaring the credit.
The procedure for declaring the ERC involves completing the required kinds and consisting of the credit on your work tax return (normally Type 941). The exact time it requires to process the credit can differ based on a number of aspects, consisting of the intricacy of your business and the workload of the IRS. It’s recommended to seek advice from a tax professional for assistance specific to your situation.
There are several business that can aid with the process of claiming the ERC. These consist of accounting companies, tax advisory services, and payroll company. Some widely known business that use support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research study and get in touch with these companies straight to ask about their fees and services.
Please keep in mind that the information offered here is based upon general understanding and might not show the most current updates or changes to the ERC. It is essential to consult with a tax professional or visit the main internal revenue service website for the most current and accurate info concerning eligibility, declaring procedures, and available help.
Less than 100. If the company had 100 or less workers on average in 2019, then the credit is based.
on salaries paid to all workers whether they in fact worked or not. In other words, even if the.
workers worked full time and earned money for full-time work, the employer still gets the credit.
Greater than 100. The credit is if the employer had more than 100 workers on average in 2019.
allowed just for salaries paid to employees who did not work throughout the calendar quarter.
In both cases, “earnings” consists of not simply money payments but also a part of the expense of company.
provided health care. Qualified Health Plan Expenses For The Employee Retention Credit
Employers can be immediately compensated for the credit by decreasing the amount of payroll taxes they.