Lets talk first about Alternative Quarter Election Employee Retention Credit :
Our team here what do these guys doing everybody in this space is assisting teach people about ERC and uh constantly offer a stunning breakfast and have individuals actually learn more about the program we should head to the space where we are able to display a few of the checks that we are getting for business and I want to see that what is this this is uh numerous millions of dollars actually Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to customers verifying that the check is on the method I mean you know if you just 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 indicate it’s just I imply think of how many 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 client so that’s how you’re able to track it you know when you
receive this you understand the check is opted for sure which’s when they pay so they do not pay anything till they actually receive the money they don’t pay bottom line Wonder trust anything till this letter is validated the check is on the method they transfer it into their bank account and they can genuinely trust Wonder trust that the process has been ended up and how many you believe you have actually processed since 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 Terrific here you’re at my YouTube channel we’re discussing something really important today the worker retention credit which the majority of you have actually never ever become aware of I certainly hadn’t heard of it till very just recently and discovered a lot about it because this is probably the lowest cost of capital for any small company anywhere
anytime if you have workers between 5 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 Principles 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 simply call up your bank manager and say give me a loan it does not work there’s not a loan it’s an application and Josh is going to inform us all 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 very soon you got to discover all about it let’s talk employee retention credit Josh Fox what is an ERC let’s just start there so throughout the Trump Administration when President Trump was enacted they developed the cares Act and the cares act used organizations 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 difference right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the money cash payroll tax refund fine go on sorry I simply need to make certain we got that point I imply that’s a huge distinction a loan versus money money I like cash money that’s what we’re talking 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 initial cares Act is the ERC and yes Kevin it is a beautiful difficult check in the mail where you get real 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 employee retention credit that individual needed to be a staff member so I’m going to make the Assumption this cash is not for the owner not for people on the cap table not for shareholders it’s for employees right you had to have actually owned a service but it’s based on you having W-2 employees in America not 10.99. 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 have to be on payroll for the very first 6 months of 2021 on the W-2 appropriate so there were six quarters the program was open well stroll us through the 6 quarters so you had quarters two 3 and 4 of 2020 and you had quarters one 2 and 3 of 2021. all right so that’s how it’s measured you need to be on the W-2 during that period now let’s talk my preferred part cash how much can you get back per worker that was on a W-2 in those 6 quarters so the estimation in 2020 to be exact Kevin is 50 of the employee’s salary to an optimum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers escalated to 70 of the staff member’s wage to a maximum of seven thousand per quarter how did that happen um they just changed the rules in.
2021 versus because the chaos 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 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 five thousand in twenty twenty that’s twenty six thousand dollars per employee that is because that’s a lot of cash it is now there’s a caveat here the PPP cash would need to be reduced from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would minimize the 26 000 so what we’re seeing usually Kevin is if you took PPP cash 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 staff members 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 nobody understand about this because look when I first heard about this when I initially satisfied Josh you know I have actually got lots of investments in great deals of business I’m a significant advocate for entrepreneurship in America and make many many financial investments in business owners of which lots of suffered through the pandemic when I first became aware of this I called BS I don’t believe it since I use the PPP we went through the cash 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 utilized them wisely to stay alive throughout the pandemic so when I became aware of this I said nah it can’t hold true however when I dug around I even contacted us to my political leader buddies Governor Senators they didn’t know about it I mean that’s how you understand 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 since you took the PPP also not real so let’s ask Josh why does nobody learn about the employee retention credit you know what’s intriguing you’re discussing 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 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 procedure process that’s all um and here there was chaos due to the fact that keep in mind in the initial cares act you might refrain from doing both programs so if you had done PPP you could not do ERC in the original program and when they altered the law in 2021 the banks were refraining from doing ERC because it’s not alone so you’re getting a tax refund so the government never made it clear to anyone about how to.
do this does your CFO understand how to do this not really he or she’s never done it in the past do the banks do it nope the banks don’t do it the payroll companies yeah some of them are doing it as a payroll company your accounting professional no your accounting professional’s never ever done this before unless you have an account that went into this company and bottom line my firm Kevin has actually been in business considering that 2009 and we have actually been dealing with the federal government and the state government to recover money for Fortune 500 Fortune 1000 companies so a lot of our huge huge business clients have worked with bottom line to recover other federal government programs we’ve done sales tax and use tax joblessness tax work opportunity tax credits research and development tax credits unclaimed property property tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit developed to motivate.
employers to keep workers on their payroll. The credit is 50% of approximately $10,000 in incomes paid by an.
company whose company is fully or partially suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
1. The credit is readily available to all companies despite size including tax exempt companies. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
businesses who take Small company Loans.
2. To qualify, the company needs to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s company is fully or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross receipts are listed below 50% of the equivalent quarter in 2019. When the.
employer’s gross receipts go above 80% of an equivalent quarter in 2019 they no longer certify.
after completion of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the certifying wages paid up to $10,000 in total.
It works for earnings paid after March 13th and before December 31, 2020.
The meaning of qualifying incomes differs by whether an employer had, usually, basically than.
100 workers in 2019.
Business that focus on ERC filing support typically supply competence and support to help organizations browse the intricate process of claiming the credit. They can provide numerous services, including:.
How is the employee retention credit calculated? Alternative Quarter Election Employee Retention Credit
Eligibility Assessment: These business will examine your service’s eligibility for the ERC based on factors such as your market, profits, and operations. They can assist identify if you meet the requirements for the credit and identify the optimum credit amount you can claim.
Documents and Estimation: ERC filing services will help in collecting the necessary paperwork, such as payroll records and financial declarations, to support your claim. They will likewise assist determine the credit quantity based on eligible incomes and other certifying expenses.
Retroactive Claim Review: If you are eligible to claim the ERC for prior quarters, these companies can evaluate your previous payroll records and financials to identify potential chances for retroactive credits. They can help you modify previous tax returns to claim these refunds.
Filing Support: Business specializing in ERC filings will prepare and send the required types and documents on your behalf. This consists of completing Form 941 or any other necessary tax return.
Compliance and Updates: ERC regulations and guidance have actually evolved over time. These companies remain updated with the most recent modifications and make sure that your filings adhere to the most current standards. They can also provide continuous assistance if the IRS requests extra details or performs an audit related to your ERC claim.
It’s important to research and veterinarian any company using ERC filing help to ensure their reliability and competence. Look for recognized firms with experience in tax and payroll services, or consider reaching out to relied on accounting firms or tax specialists who provide ERC filing assistance.
Keep in mind that while these business can provide valuable help, it’s constantly an excellent idea to have a basic understanding of the ERC requirements and process yourself. This will help you make informed decisions and make sure 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 steps. The objective of the ERC is to encourage organizations to keep 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 offered to qualified employers, including for-profit companies, tax-exempt organizations, and specific governmental entities. To qualify, companies should meet one of two criteria:.
Business operations were totally or partially suspended due to a federal government order related to COVID-19.
Business experienced a considerable decline in gross invoices. As pointed out previously, for 2021, a substantial decline is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decrease in gross invoices compared to the exact 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 employer’s share of Social Security taxes. The credit quantity amounts to a percentage (approximately 70%) of certified salaries paid to staff members, consisting of specific health insurance expenditures. The optimum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, services that got an Income Defense Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 enables businesses to claim the ERC even if they received a PPP loan. However, the very same salaries can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and boosted, enabling eligible employers to declare the credit for qualified wages paid as far back as March 13, 2020. This retroactive provision offers an opportunity for organizations to amend prior-year tax returns and receive refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their employment income tax return, usually Form 941. The excess can be reimbursed to the employer if the credit goes beyond the amount of work taxes owed.
It is necessary to keep in mind that the ERC arrangements and eligibility requirements have evolved over time. The very best course of action is to speak with a tax professional or check out the main internal revenue service website for the most in-depth and up-to-date details regarding the ERC, consisting of any current legal modifications or updates.
To get approved for the ERC, a company should meet among the following requirements:.
The business operations were fully or partly suspended due to a government order related to COVID-19.
Business experienced a considerable decline in gross receipts. For 2021, a significant decline is defined as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a considerable decrease is specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
The ERC is readily available to businesses of all sizes, consisting of tax-exempt organizations, but there are some exceptions. For example, federal government entities and services that got a PPP loan might have restrictions on claiming the credit.
The procedure for declaring the ERC involves completing the necessary forms and including the credit on your work income tax return (usually Type 941). The exact time it takes to process the credit can vary based upon a number of aspects, including the intricacy of your service and the work of the internal revenue service. It’s recommended to talk to a tax expert for guidance specific to your scenario.
There are numerous companies that can help with the process of claiming the ERC. These include accounting companies, tax advisory services, and payroll company. Some popular business that offer support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research and call these companies straight to ask about their services and costs.
Please keep in mind that the details offered here is based upon basic knowledge and might not show the most recent updates or modifications to the ERC. It is essential to consult with a tax professional or visit the main IRS site for the most up-to-date and precise details regarding eligibility, claiming procedures, and readily available assistance.
Less than 100. The credit is based if the company had 100 or less staff members on average in 2019.
on salaries paid to all workers whether they in fact worked or not. In other words, even if the.
workers 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 workers on average in 2019.
allowed just for salaries paid to employees who did not work throughout the calendar quarter.
In both cases, “earnings” includes not simply money payments however likewise a portion of the cost of employer.
offered healthcare. Alternative Quarter Election Employee Retention Credit
Companies can be instantly compensated for the credit by reducing the amount of payroll taxes they.