Lets talk first about Taxpayer Certainty And Disaster Tax Relief Act Of 2020 Employee Retention Credit :
Our team here what do these guys doing everybody in this space is assisting teach people about ERC and uh constantly provide a lovely breakfast and have individuals really learn about the program we must head to the room 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 numerous millions of dollars actually Kevin numerous countless dollars so these are replicate copies of the letters that go to clients validating that the check is on the way I imply you understand if you simply start to take a look at some of these here I suggest this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s simply I indicate think about 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 IRS heading to the consumer so that’s how you’re able to track it you understand when you
receive this you understand the check is chosen sure which’s when they pay so they do not pay anything till they in fact receive the cash they don’t pay bottom line Wonder trust anything until this letter is validated the check is on the way they transfer it into their bank account and they can truly trust Wonder trust that the procedure has actually been completed and how many you believe you have actually 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 and that’s what you need you require specialists 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 Terrific 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 ever heard of I certainly hadn’t heard of it till really just recently and learned a lot about it since this is most likely the lowest cost of capital for any small company anywhere
anytime if you have workers between 5 and five hundred so I’ve got the expert with me this is Josh Fox he’s the creator and CEO of bottom line Ideas 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 simply phone 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 spokesperson for this I enjoy this program it’s disappearing very soon you got to learn all about it let’s talk employee retention credit Josh Fox what is an ERC let’s just begin there so throughout the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act provided services three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everybody it makes a huge distinction right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the cash cash payroll tax refund okay go on sorry I simply have to ensure we got that point I indicate that’s a big difference a loan versus money money I like cash money 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 initial 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 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 worker 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 workers right you needed to have actually owned a company however it’s based on you having W-2 workers 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 qualified so you need 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 correct so there were 6 quarters the program was open well walk us through the six quarters so you had quarters 2 three and 4 of 2020 and you had quarters one 2 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 preferred part cash how much can you get back per staff member that was on a W-2 in those six quarters so the computation in 2020 to be precise Kevin is 50 of the employee’s salary to a maximum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers escalated to 70 of the worker’s salary to a maximum of seven thousand per quarter how did that happen um they simply changed the rules in.
2021 versus because the turmoil of the pandemic so they wanted 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 five thousand Max and then what takes place 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 money it is now there’s a caveat here the PPP cash would need to be minimized from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would reduce the 26 000 so what we’re seeing on average Kevin is if you took PPP cash someplace around 10 thousand dollars a person so let’s say hypothetically you owned a dining establishment in New York 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 big obviously now the big concern is why does no one understand about this due to the fact that look when I first found out about this when I first fulfilled Josh you know I have actually got great deals of investments in great deals of business I’m a major advocate for entrepreneurship in America and make many numerous investments in business owners of which many suffered through the pandemic when I initially became aware of this I called BS I don’t think it because 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 been worthy of and we utilized them wisely to stay alive throughout the pandemic so when I found out about this I said nah it can’t be true however when I dug around I even contacted us to my political leader friends Governor Senators they didn’t understand about it I suggest that’s how you know that’s how misinformation is that there’s no details out there then a bunch of people informed me well you can’t get it because you took the PPP likewise not real so let’s ask Josh why does nobody know about the worker retention credit you understand what’s intriguing you’re discussing the banks Kevin due to the fact that in the PPP loan procedure 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 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 chaos due to the fact that keep in mind in the initial cares act you could refrain from doing both programs so if you had actually done PPP you might 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 ever made it clear to anyone about how to.
do this does your CFO know 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 given that 2009 and we’ve been dealing with the federal government and the state government to recuperate money for Fortune 500 Fortune 1000 companies so a great deal of our huge huge corporate customers have worked with bottom line to recover other government programs we have actually done sales tax and utilize tax joblessness tax work opportunity tax credits research and development tax credits unclaimed home real estate tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit designed to motivate.
employers to keep staff members on their payroll. The credit is 50% of approximately $10,000 in salaries paid by an.
Because of COVID-19 or whose gross receipts, employer whose service is fully or partly suspended.
decline by more than 50%.
1. The credit is readily available to all companies no matter size consisting of tax exempt organizations. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) little.
services who take Small Business Loans.
2. To certify, the company needs to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s company is totally or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross invoices are listed below 50% of the equivalent quarter in 2019. When the.
employer’s gross invoices go above 80% of a comparable quarter in 2019 they no longer certify.
after the end of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the qualifying earnings paid up to $10,000 in overall.
It is effective for earnings paid after March 13th and prior to December 31, 2020.
The meaning of qualifying incomes differs by whether a company had, typically, more or less than.
100 workers in 2019.
Companies that concentrate on ERC filing support typically supply proficiency and support to assist businesses navigate the complex procedure of claiming the credit. They can use numerous services, including:.
How is the employee retention credit calculated? Taxpayer Certainty And Disaster Tax Relief Act Of 2020 Employee Retention Credit
Eligibility Evaluation: These companies will evaluate your service’s eligibility for the ERC based upon aspects such as your market, earnings, and operations. They can help figure out if you satisfy the requirements for the credit and identify the maximum credit amount you can declare.
Documents and Estimation: ERC filing services will help in collecting the essential documentation, such as payroll records and monetary declarations, to support your claim. They will also help determine the credit quantity based on eligible earnings and other qualifying expenditures.
Retroactive Claim Review: If you are qualified to declare the ERC for previous quarters, these companies can evaluate your previous payroll records and financials to determine prospective opportunities for retroactive credits. They can help you amend previous tax returns to claim these refunds.
Filing Help: Companies concentrating on ERC filings will prepare and submit the needed forms and documents in your place. This includes finishing Kind 941 or any other necessary tax forms.
Compliance and Updates: ERC policies and guidance have actually progressed with time. These business remain updated with the latest modifications and ensure that your filings comply with the most current guidelines. If the IRS demands additional info or conducts an audit related to your ERC claim, they can likewise supply continuous assistance.
It is essential to research and veterinarian any business using ERC filing support to guarantee their credibility and expertise. Search for recognized firms with experience in tax and payroll services, or consider reaching out to trusted accounting companies or tax specialists who offer ERC filing support.
Remember that while these companies can provide valuable support, it’s constantly a great concept to have a basic understanding of the ERC requirements and procedure yourself. This will help 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 goal of the ERC is to encourage companies to retain and pay their employees during 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 eligible companies, including for-profit companies, tax-exempt companies, and specific governmental entities. To qualify, companies should meet one of two criteria:.
The business operations were totally or partially suspended due to a federal government order related to COVID-19.
Business experienced a substantial decline in gross receipts. As pointed out earlier, for 2021, a substantial decline 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 receipts compared to the very same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit quantity amounts to a portion (as much as 70%) of qualified wages paid to staff members, including certain health plan costs. The maximum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, services that received a Paycheck Defense Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 permits organizations to declare the ERC even if they got a PPP loan. The exact same incomes can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and boosted, allowing qualified companies to declare the credit for certified wages paid as far back as March 13, 2020. This retroactive provision provides an opportunity for businesses to amend prior-year income tax return and get refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their work income tax return, generally Type 941. The excess can be reimbursed to the employer if the credit exceeds the amount of employment taxes owed.
It is necessary to keep in mind that the ERC provisions and eligibility requirements have actually evolved over time. The best course of action is to consult with a tax professional or go to the main IRS site for the most up-to-date and detailed details relating to the ERC, including any recent legal changes or updates.
To qualify for the ERC, a company needs to fulfill one of the following requirements:.
The business operations were fully or partially suspended due to a federal government order related to COVID-19.
The business experienced a considerable decline in gross receipts. For 2021, a considerable decrease is defined as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a substantial decline is defined as a 20% decline 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 readily available to companies of all sizes, including tax-exempt companies, however there are some exceptions. For example, government entities and businesses that received a PPP loan might have restrictions on claiming the credit.
The process for claiming the ERC involves finishing the required types and including the credit on your employment tax return (usually Type 941). The exact time it takes to process the credit can differ based on several factors, including the complexity of your business and the workload of the IRS. It’s recommended to speak with a tax expert for guidance particular to your circumstance.
There are a number of companies that can assist with the process of declaring the ERC. Some well-known business that offer assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the info offered here is based upon general knowledge and may not reflect the most recent updates or changes to the ERC. It is very important to speak with a tax expert or check out the main IRS website for the most precise and updated information relating to eligibility, declaring procedures, and available help.
Less than 100. If the company had 100 or fewer workers typically in 2019, then the credit is based.
on salaries paid to all employees whether they really worked or not. In other words, even if the.
workers worked full-time and got paid for full time work, the employer still gets the credit.
Greater than 100. If the employer had more than 100 workers on average in 2019, then the credit is.
enabled only for earnings paid to staff members who did not work throughout the calendar quarter.
In both cases, “earnings” includes not just money payments but also a part of the expense of company.
offered healthcare. Taxpayer Certainty And Disaster Tax Relief Act Of 2020 Employee Retention Credit
Companies can be instantly reimbursed for the credit by lowering the amount of payroll taxes they.