Lets talk first about American Rescue Plan Act Employee Retention Credit :
Our group here what do these people doing everybody in this room is assisting teach people about ERC and uh constantly offer a stunning breakfast and have individuals really learn more about the program we ought to head to the room where we are able to show a few of the checks that we are getting for business and I wish to see that what is this this is uh numerous countless dollars literally Kevin numerous millions of dollars so these are duplicate copies of the letters that go to clients verifying that the check is on the way I suggest you know if you just start to look at a few of these here I suggest this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I mean it’s just I imply consider the number of real 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 consumer so that’s how you have the ability to track it you know when you
get this you know the check is gone for sure which’s when they pay so they do not pay anything until they in fact get the money they don’t pay bottom line Wonder trust anything till this letter is confirmed the check is on the method they deposit it into their savings account and they can genuinely rely on Wonder trust that the process has been finished and how many you think you have actually processed considering that you began 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 need you require professionals 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 Fantastic here you’re at my YouTube channel we’re speaking about something truly essential today the staff member retention credit which most of you have never ever heard of I definitely had not heard of it up until extremely just recently and learned a lot about it because this is most likely the lowest expense of capital for any small business anywhere
anytime if you have employees between 5 and five hundred so I have actually got the expert with me this is Josh Fox he’s the creator and CEO of bottom line Ideas 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 phone 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 tell us all about it and how to get it and why I’ve become yes the Ambassador and paid representative for this I love this program it’s going away soon you got to discover all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply begin there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act provided companies three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everybody it makes a big difference right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the cash money payroll tax refund alright go on sorry I simply have to make sure we got that point I indicate that’s a big difference a loan versus money cash I like money cash that’s what we’re talking 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 beautiful difficult 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 worker 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 workers right you had to have owned a service however it’s based upon you having W-2 staff members 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 eligible 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 proper so there were 6 quarters the program was open well stroll us through the 6 quarters so you had quarters 2 3 and four of 2020 and you had quarters one 2 and three of 2021. alright so that’s how it’s determined you need 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 staff member that was on a W-2 in those 6 quarters so the estimation in 2020 to be precise Kevin is 50 of the worker’s wage to an optimum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the staff member’s income to a maximum of 7 thousand per quarter how did that take place um they simply altered the rules in.
2021 versus due to the fact that the mayhem 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 up to 5 thousand Max and then what takes place 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 6 thousand dollars per staff member that is because that’s a lot of cash it is now there’s a caveat here the PPP money would need to be reduced from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would minimize the 26 000 so what we’re seeing on average Kevin is if you took PPP money someplace around 10 thousand dollars an individual so let’s say hypothetically you owned a dining establishment in New york city City where I’m from and you had a hundred workers and you took PPP money you would still get a million dollar in the mail from the internal revenue service so it’s substantial obviously now the huge concern is why does nobody know about this due to the fact that look when I initially heard about this when I initially fulfilled Josh you know I’ve got lots of financial investments in great deals of companies I’m a significant supporter for entrepreneurship in America and make lots of lots of investments in business owners of which lots of suffered through the pandemic when I first heard about this I called BS I don’t 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 deserved and we utilized them wisely to stay alive throughout the pandemic so when I found out about this I stated nah it can’t hold true but when I dug around I even contacted us to my politician friends Guv Senators they didn’t understand about it I suggest that’s how you know that’s how false information is that there’s no details out there then a bunch of individuals informed me well you can’t get it since you took the PPP also not real so let’s ask Josh why does no one know about the staff member retention credit you understand what’s interesting you’re discussing the banks Kevin because in the PPP loan procedure the federal government made it really clear that if you wanted a PPP loan you would call Wells Fargo Citibank Bank of America any of the big 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 turmoil because keep in mind in the initial cares act you could refrain from doing both programs so if you had done PPP you could refrain from doing ERC in the initial program and when they altered the law in 2021 the banks were not doing ERC since 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 before 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 accountant’s never done this before unless you have an account that entered into this company and bottom line my company Kevin has actually been 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 big huge business clients have dealt with bottom line to recover other 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 worker retention tax credit is a broad based refundable tax credit developed to encourage.
companies to keep staff members on their payroll. The credit is 50% of approximately $10,000 in wages paid by an.
Due to the fact that of COVID-19 or whose gross receipts, company whose service is fully or partly suspended.
decrease by more than 50%.
Schedule.
1. The credit is offered to all companies no matter size including tax exempt companies. 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 employer has to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s company is fully or partly suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are listed below 50% of the comparable quarter in 2019. As soon as the.
employer’s gross invoices go above 80% of an equivalent quarter in 2019 they no longer certify.
after completion of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the qualifying wages paid up to $10,000 in total.
It is effective for wages paid after March 13th and before December 31, 2020.
The meaning of qualifying incomes differs by whether an employer had, usually, more or less than.
100 staff members in 2019.
Business that specialize in ERC filing help usually provide knowledge and assistance to assist organizations browse the complex process of claiming the credit. They can use different services, including:.
How is the employee retention credit calculated? American Rescue Plan Act Employee Retention Credit
Eligibility Evaluation: These companies will examine your service’s eligibility for the ERC based on elements such as your market, income, and operations. If you satisfy the requirements for the credit and identify the optimum credit quantity you can declare, they can help identify.
Paperwork and Estimation: ERC filing services will help in gathering the needed paperwork, such as payroll records and financial declarations, to support your claim. They will also help calculate the credit quantity based upon qualified salaries and other qualifying expenses.
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 identify potential chances for retroactive credits. They can assist you modify previous income tax return to declare these refunds.
Filing Assistance: Companies concentrating on ERC filings will prepare and submit the essential kinds and paperwork on your behalf. This consists of completing Form 941 or any other necessary tax forms.
Compliance and Updates: ERC guidelines and guidance have progressed in time. These business stay updated with the most recent changes and make sure that your filings adhere to the most current guidelines. If the Internal revenue service demands extra details or conducts an audit associated to your ERC claim, they can also supply ongoing assistance.
It’s important to research and vet any company offering ERC filing support to guarantee their trustworthiness and knowledge. Search for recognized companies with experience in tax and payroll services, or consider connecting to relied on accounting firms or tax professionals who use ERC filing support.
Bear in mind that while these companies can offer important support, it’s always an excellent idea to have a standard understanding of the ERC requirements and procedure yourself. This will help you make informed choices and ensure accurate filings.
The Worker Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief measures. The objective of the ERC is to motivate businesses to retain and pay their staff members during the pandemic, even if their operations have actually been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to eligible companies, consisting of for-profit services, tax-exempt organizations, and certain governmental entities. To qualify, companies should satisfy one of two requirements:.
The business operations were fully or partly suspended due to a government order related to COVID-19.
Business experienced a considerable decrease in gross receipts. As mentioned previously, for 2021, a considerable decrease is specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decline in gross invoices compared to the same quarter in 2019, or a 20% decline in gross invoices compared to the instantly preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity is equal to a percentage (approximately 70%) of qualified wages paid to employees, including certain health plan costs. The maximum 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 Protection Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 allows businesses to claim the ERC even if they got a PPP loan. The exact same salaries can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively expanded and boosted, enabling qualified companies to declare the credit for certified earnings paid as far back as March 13, 2020. This retroactive arrangement offers an opportunity for services to change prior-year tax returns and receive refunds.
Claiming the Credit: Companies can declare the ERC by reporting it on their employment tax returns, generally Type 941. If the credit surpasses the quantity of work taxes owed, the excess can be refunded to the company.
It is essential to keep in mind that the ERC provisions and eligibility criteria have actually progressed over time. The very best strategy is to speak with a tax professional or go to the official internal revenue service website for the most up-to-date and detailed information relating to the ERC, including any recent legislative modifications or updates.
To get approved for the ERC, a business must satisfy one of the following criteria:.
The business operations were fully or partly suspended due to a federal government order related to COVID-19.
Business experienced a significant decrease in gross invoices. For 2021, a substantial decrease is specified as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decline 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 offered to services of all sizes, consisting of tax-exempt organizations, however there are some exceptions. Federal government entities and businesses that received a PPP loan may have constraints on claiming the credit.
The procedure for declaring the ERC involves finishing the needed types and consisting of the credit on your work income tax return (usually Type 941). The exact time it requires to process the credit can differ based upon a number of elements, including the intricacy of your service and the workload of the IRS. It’s advised to seek advice from a tax expert for assistance particular to your scenario.
There are numerous companies that can assist with the procedure of claiming the ERC. These consist of accounting companies, tax advisory services, and payroll company. Some well-known companies that use support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research and call these business directly to ask about their services and costs.
Please note that the details provided here is based upon general understanding and may not reflect the most current updates or modifications to the ERC. It’s important to talk to a tax professional or check out the official internal revenue service site for the most up-to-date and precise information relating to eligibility, claiming treatments, and available support.
Less than 100. If the company had 100 or fewer workers usually in 2019, then the credit is based.
on salaries paid to all staff members whether they in fact worked or not. In other words, even if the.
employees worked full time and got paid for full-time work, the company still gets the credit.
Greater than 100. If the employer had more than 100 employees usually in 2019, then the credit is.
allowed just for incomes paid to employees who did not work during the calendar quarter.
In both cases, “incomes” includes not just money payments but also a part of the cost of employer.
supplied health care. American Rescue Plan Act Employee Retention Credit
Payment.
Companies can be right away reimbursed for the credit by minimizing the amount of payroll taxes they.