Lets talk first about What Is Employee Retention Credit Under The Cares Act :
Our group here what do these people doing everyone in this space is helping teach individuals about ERC and uh always offer a stunning breakfast and have people truly learn about the program we ought to head to the room where we are able to show some of the checks that we are getting for business and I wish to see that what is this this is uh numerous countless dollars actually Kevin hundreds of countless dollars so these are replicate copies of the letters that go to clients validating that the check is on the way I mean you understand if you just begin to take a look at some of these here I mean 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 of how many actual customers that went through the program yeah this is the very end this is the party at the end when the check is verified the numbers are validated and the check is on the mail in the mail from the IRS heading to the client so that’s how you’re able to track it you know when you
get this you know the check is gone for 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 until this letter is validated the check is on the method they deposit it into their checking account and they can really rely on Wonder trust that the process has been finished and the number of you believe you’ve processed considering that you started this we’re about 35 000 of these for
about 6 billion dollars wow so clearly they know what they’re doing which’s what you require you need specialists 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 discussing something really important today the worker retention credit which most of you have actually never ever become aware of I definitely had not heard of it up until really just recently and learned 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 employees 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 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 call up your bank manager and say offer 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 representative for this I enjoy this program it’s disappearing soon you got to discover everything about it let’s talk staff member 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 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone it makes a big distinction right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
remedy the cash money payroll tax refund alright go on sorry I simply need to make certain we got that point I imply that’s a huge difference a loan versus money 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 initial cares Act is the ERC and yes Kevin it is a stunning hard check in the mail where you get real money from the internal revenue service all right so let’s talk about how it works because it sounds like to me if it’s a if it’s staff member retention credit that individual had to be an employee so I’m going to make the Presumption 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 company but it’s based upon you having W-2 workers 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 six months of 2021 on the W-2 correct so there were six quarters the program was open well stroll us through the 6 quarters so you had quarters 2 three and 4 of 2020 and you had quarters one two and 3 of 2021. fine so that’s how it’s determined you have to be on the W-2 during that duration now let’s talk my favorite part cash just how much can you get back per worker that was on a W-2 in those six quarters so the estimation in 2020 to be specific Kevin is 50 of the employee’s wage to an optimum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers increased to 70 of the worker’s wage to a maximum of seven thousand per quarter how did that happen um they just changed the rules in.
2021 versus since the mayhem 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 up to five thousand Max and after that what happens 21 000 Max in 2021 oh that’s how you create twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty 6 thousand dollars per employee that is since that’s a lot of cash it is now there’s a caveat here the PPP money would need to be minimized 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 money someplace around ten thousand dollars a person so let’s state hypothetically you owned a restaurant 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 substantial obviously now the big question is why does nobody know about this since appearance when I initially found out about this when I first met Josh you understand I have actually got lots of financial investments in great deals of business I’m a major supporter for entrepreneurship in America and make lots of lots of investments in business owners of which many suffered through the pandemic when I first found out about this I called BS I do not believe it because I utilize 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 should have and we utilized them sensibly to stay alive during the pandemic so when I heard about this I stated nah it can’t be true however when I dug around I even called to my political leader good friends Governor Senators they didn’t learn about it I mean that’s how you know that’s how misinformation is that there’s no details out there then a lot of people informed me well you can’t get it since you took the PPP likewise not real so let’s ask Josh why does nobody understand about the employee retention credit you know what’s interesting you’re talking about 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 process in Canada a pre-pp loan there’s no loans in Canada by the way it’s just procedure procedure that’s all um and here there was turmoil because remember in the initial cares act you might not do both programs so if you had done PPP you might refrain from doing ERC in the initial program and when they changed the law in 2021 the banks were not doing ERC because it’s not alone so you’re getting a tax refund so the government never made it clear to any person about how to.
do this does your CFO know how to do this not actually she or he’s never ever done it in the past do the banks do it nope the banks do not do it the payroll business yeah some of them are doing it as a payroll company your accountant no your accountant’s never done this before unless you have an account that went into this company and bottom line my firm Kevin has stayed in business given that 2009 and we’ve been dealing with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 business so a lot of our huge huge business customers have actually worked with bottom line to recuperate other federal 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 government programs.
The employee retention tax credit is a broad based refundable tax credit created to motivate.
companies to keep workers on their payroll. The credit is 50% of approximately $10,000 in earnings paid by an.
Because of COVID-19 or whose gross receipts, company whose business is fully or partly suspended.
decrease by more than 50%.
1. The credit is offered to all employers regardless of size consisting of tax exempt organizations. There are.
just two exceptions: (1) state and city governments and their instrumentalities and (2) small.
businesses who take Small Business Loans.
2. To certify, the employer has to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s service is totally or partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the company’s gross receipts are listed below 50% of the comparable quarter in 2019. Once the.
employer’s gross invoices go above 80% of an equivalent quarter in 2019 they no longer qualify.
after completion of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the qualifying earnings paid up to $10,000 in overall.
It works for salaries paid after March 13th and before December 31, 2020.
The definition of qualifying incomes varies by whether a company had, usually, more or less than.
100 workers in 2019.
Business that focus on ERC filing assistance usually provide expertise and support to help organizations browse the complicated procedure of declaring the credit. They can provide different services, consisting of:.
How is the employee retention credit calculated? What Is Employee Retention Credit Under The Cares Act
Eligibility Evaluation: These companies will evaluate your service’s eligibility for the ERC based on factors such as your industry, profits, and operations. They can assist determine if you satisfy the requirements for the credit and recognize the optimum credit quantity you can claim.
Documents and Calculation: ERC filing services will assist in gathering the required documentation, such as payroll records and monetary statements, to support your claim. They will likewise assist compute the credit quantity based upon qualified wages and other certifying expenditures.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for prior quarters, these companies can examine your previous payroll records and financials to recognize possible chances for retroactive credits. They can help you modify prior tax returns to declare these refunds.
Filing Help: Companies focusing on ERC filings will prepare and send the required forms and documents on your behalf. This consists of finishing Kind 941 or any other necessary tax return.
Compliance and Updates: ERC guidelines and assistance have actually developed gradually. These companies stay updated with the latest changes and guarantee that your filings comply with the most present standards. They can likewise provide continuous assistance if the internal revenue service requests extra information or carries out an audit related to your ERC claim.
It is essential to research and vet any company using ERC filing help to ensure their credibility and knowledge. Look for recognized companies with experience in tax and payroll services, or think about connecting to trusted accounting firms or tax experts who provide ERC filing assistance.
Keep in mind that while these business can offer important support, it’s always a good idea to have a fundamental understanding of the ERC requirements and procedure yourself. This will assist you make informed decisions and guarantee accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief measures. The goal of the ERC is to motivate businesses to retain 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 eligible employers, including for-profit businesses, tax-exempt organizations, and certain governmental entities. To qualify, companies need to meet one of two requirements:.
The business operations were completely or partially suspended due to a government order related to COVID-19.
The business experienced a significant decrease in gross invoices. As mentioned previously, for 2021, a substantial decrease is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decrease in gross receipts compared to the 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 amount is equal to a percentage (approximately 70%) of certified salaries paid to staff members, including particular health insurance costs. The maximum credit per staff member is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, businesses that received a Paycheck Security Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 enables services to declare the ERC even if they received a PPP loan. Nevertheless, the very same incomes can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively broadened and boosted, permitting qualified companies to claim the credit for qualified earnings paid as far back as March 13, 2020. This retroactive provision offers an opportunity for businesses to change prior-year income tax return and receive refunds.
Declaring the Credit: Employers can declare the ERC by reporting it on their employment income tax return, normally Form 941. If the credit exceeds the amount of employment taxes owed, the excess can be refunded to the employer.
It is very important to note that the ERC provisions and eligibility requirements have progressed over time. The very best strategy is to speak with a tax expert or visit the main internal revenue service website for the most detailed and up-to-date details regarding the ERC, including any current legal modifications or updates.
To get approved for the ERC, a business must satisfy one of the following criteria:.
The business operations were completely or partly suspended due to a federal government order related to COVID-19.
Business experienced a substantial decline in gross invoices. For 2021, a considerable decline is specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decline is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019, or a 20% decline in gross invoices compared to the immediately preceding quarter.
The ERC is available to companies of all sizes, including tax-exempt organizations, however there are some exceptions. Government entities and services that got a PPP loan may have limitations on claiming the credit.
The procedure for claiming the ERC includes completing the necessary kinds and including the credit on your work income tax return (usually Form 941). The exact time it requires to process the credit can vary based upon a number of elements, including the intricacy of your company and the workload of the internal revenue service. It’s suggested to seek advice from a tax expert for guidance specific to your situation.
There are a number of business that can help with the process of declaring the ERC. Some popular companies that use assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the information supplied here is based upon basic understanding and might not show the most current updates or modifications to the ERC. It is essential to talk to a tax professional or check out the main internal revenue service site for the most updated and accurate details concerning eligibility, declaring procedures, and readily available assistance.
Less than 100. The credit is based if the company had 100 or fewer staff members on average in 2019.
on incomes paid to all workers whether they in fact worked or not. To put it simply, even if the.
staff members worked full-time and got paid for full-time work, the company still gets the credit.
Greater than 100. The credit is if the employer had more than 100 staff members on average in 2019.
allowed just for salaries paid to staff members who did not work during the calendar quarter.
In both cases, “earnings” includes not just money payments but likewise a part of the cost of employer.
offered health care. What Is Employee Retention Credit Under The Cares Act
Companies can be instantly repaid for the credit by minimizing the amount of payroll taxes they.