Lets talk first about Covid-19 Employee Retention Credits :
Our group here what do these guys doing everybody in this space is helping teach individuals 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 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 hundreds of millions of dollars so these are duplicate copies of the letters that go to clients verifying that the check is on the method I suggest you understand if you simply 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 simply I suggest think about the number of actual customers 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 validated 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
get this you understand the check is gone for sure and that’s when they pay so they don’t pay anything till they in fact receive the money they do not pay bottom line Wonder trust anything until this letter is confirmed the check is on the method they deposit it into their savings account and they can truly trust Wonder trust that the procedure has actually been completed and how many you think you’ve processed because you started this we have to do with 35 000 of these for
about 6 billion dollars wow so clearly they understand what they’re doing and that’s what you need 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 speaking about something actually crucial today the employee retention credit which most of you have never ever heard of I definitely had not heard of it until really recently and learned a lot about it because this is most likely the lowest cost of capital for any small business anywhere
anytime if you have workers between five and five hundred so I have actually got the professional with me this is Josh Fox he’s the founder 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 just call your bank manager and say provide me a loan it does not work there’s not a loan it’s an application and Josh is going to tell 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 disappearing very soon you got to learn everything about it let’s talk worker retention credit Josh Fox what is an ERC let’s just start there so throughout the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act used companies three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody it makes a big distinction right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the cash cash payroll tax refund all right go on sorry I just need to ensure we got that point I suggest that’s a big difference a loan versus cash money I like cash cash that’s what we’re speaking about 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 original cares Act is the ERC and yes Kevin it is a stunning hard check in the mail where you get real money from the IRS all right so let’s speak about how it works due to the fact that it seems like to me if it’s a if it’s employee retention credit that person needed to be a staff member 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 workers right you had to have owned an organization however 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 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 six months of 2021 on the W-2 correct so there were six quarters the program was open well walk us through the six quarters so you had quarters two three and four 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 period now let’s talk my favorite part money how much can you return per employee that was on a W-2 in those 6 quarters so the calculation in 2020 to be exact Kevin is 50 of the worker’s salary to an optimum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers escalated to 70 of the worker’s income to a maximum of seven thousand per quarter how did that occur 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 workers 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 takes place 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 6 thousand dollars per staff member that is because that’s a great deal of money it is now there’s a caveat here the PPP cash would have to be decreased from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would reduce 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 state hypothetically you owned a dining establishment 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 IRS so it’s big undoubtedly now the big question is why does nobody know about this because look when I initially found out about this when I first met Josh you know I’ve got great deals of investments in lots of companies I’m a significant advocate for entrepreneurship in America and make lots of many financial investments in entrepreneurs of which lots of suffered through the pandemic when I initially became aware of 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 very easy to do we had our CEOs call the banks they got their loans and that were well deserved and we utilized them sensibly to stay alive during the pandemic so when I heard about this I stated nah it can’t hold true however when I dug around I even contacted us to my politician buddies Guv Senators they didn’t know about it I suggest that’s how you know that’s how misinformation is that there’s no information out there then a lot of individuals told me well you can’t get it because you took the PPP also not real so let’s ask Josh why does no one learn about the staff member retention credit you understand what’s intriguing you’re speaking about the banks Kevin because in the PPP loan process the federal government made it very clear that if you wanted 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 simply procedure procedure that’s all um and here there was chaos due to the fact that remember in the initial cares act you could refrain from doing both programs so if you had done PPP you might refrain from doing ERC in the original program and when they changed 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 federal government never made it clear to anyone about how to.
do this does your CFO understand how to do this not truly she or he’s never ever done it previously 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 accountant’s never done this before unless you have an account that entered into this service and bottom line my firm Kevin has been in business considering that 2009 and we have actually been working with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 business so a lot of our big big business clients have dealt with bottom line to recuperate other federal government programs we have actually done sales tax and use tax joblessness tax work opportunity tax credits research and development tax credits unclaimed home property tax all of these other federal government programs.
The staff member retention tax credit is a broad based refundable tax credit created to encourage.
employers to keep staff members on their payroll. The credit is 50% of as much as $10,000 in earnings paid by an.
Because of COVID-19 or whose gross receipts, company whose business is completely or partially suspended.
decrease by more than 50%.
Accessibility.
1. The credit is readily available to all employers regardless of size consisting of tax exempt companies. There are.
just two exceptions: (1) state and city governments and their instrumentalities and (2) small.
organizations who take Small company Loans.
2. To certify, the employer has to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s service is completely or partially suspended by federal 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. As soon as the.
employer’s gross receipts exceed 80% of an equivalent 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 earnings paid after March 13th and before December 31, 2020.
The meaning of certifying incomes differs by whether a company had, on average, more or less than.
100 staff members in 2019.
Business that specialize in ERC filing support usually offer proficiency and assistance to assist businesses navigate the complicated process of claiming the credit. They can use numerous services, consisting of:.
How is the employee retention credit calculated? Covid-19 Employee Retention Credits
Eligibility Assessment: These companies will evaluate your company’s eligibility for the ERC based on elements such as your market, earnings, and operations. They can assist determine if you meet the requirements for the credit and recognize the optimum credit amount you can declare.
Documents and Calculation: ERC filing services will assist in gathering the required documents, such as payroll records and financial declarations, to support your claim. They will likewise assist calculate the credit quantity based on qualified salaries and other qualifying expenditures.
Retroactive Claim Review: If you are qualified to declare the ERC for prior quarters, these business can evaluate your past payroll records and financials to identify potential opportunities for retroactive credits. They can help you amend prior tax returns to claim these refunds.
Filing Help: Business focusing on ERC filings will prepare and send the required types and documentation on your behalf. This includes finishing Type 941 or any other necessary tax return.
Compliance and Updates: ERC policies and assistance have evolved with time. These business stay upgraded with the current modifications and make sure that your filings abide by the most current guidelines. They can likewise provide continuous support if the internal revenue service demands additional information or performs an audit related to your ERC claim.
It is essential to research study and vet any company providing ERC filing support to guarantee their reliability and proficiency. Search for established firms with experience in tax and payroll services, or think about reaching out to relied on accounting companies or tax experts who offer ERC filing assistance.
Remember that while these companies can supply valuable assistance, it’s always a good concept to have a standard understanding of the ERC requirements and procedure yourself. This will assist you make informed choices and guarantee accurate filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief steps. The objective of the ERC is to encourage businesses to maintain and pay their workers throughout the pandemic, even if their operations have actually been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is available to eligible employers, consisting of for-profit services, tax-exempt companies, and particular governmental entities. To qualify, employers must fulfill one of two criteria:.
The business operations were completely or partially suspended due to a federal government order related to COVID-19.
Business experienced a significant decline in gross receipts. As discussed previously, for 2021, a substantial decline is defined as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the immediately preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity is equal to a portion (as much as 70%) of qualified incomes paid to workers, including particular 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, organizations that received a Paycheck Protection Program (PPP) loan were not eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 permits organizations to declare the ERC even if they received a PPP loan. However, the very same salaries can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and enhanced, permitting eligible employers to declare the credit for certified incomes paid as far back as March 13, 2020. This retroactive provision offers a chance for companies to amend prior-year income tax return and get refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their employment income tax return, generally Type 941. The excess can be reimbursed to the company if the credit surpasses the amount of work taxes owed.
It is very important to keep in mind that the ERC arrangements and eligibility requirements have developed in time. The very best strategy is to speak with a tax expert or go to the main IRS website for the most detailed and updated details relating to the ERC, consisting of any current legislative modifications or updates.
To qualify for the ERC, a service should meet one of the following requirements:.
The business operations were totally or partly suspended due to a federal government order related to COVID-19.
Business experienced a considerable decrease in gross receipts. For 2021, a considerable decrease is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a substantial decline is defined as a 20% decline in gross receipts compared to the very same quarter in 2019, or a 20% decline in gross invoices compared to the right away preceding quarter.
The ERC is offered to companies of all sizes, including tax-exempt organizations, but there are some exceptions. Federal government entities and companies that got a PPP loan might have restrictions on claiming the credit.
The procedure for claiming the ERC involves finishing the essential forms and consisting of the credit on your employment income tax return (usually Type 941). The exact time it takes to process the credit can vary based upon several factors, consisting of the intricacy of your service and the workload of the internal revenue service. It’s advised to consult with a tax professional for assistance specific to your scenario.
There are a number of business that can aid with the procedure of claiming the ERC. These include accounting firms, tax advisory services, and payroll service providers. Some widely known companies that provide support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research and call these business straight to inquire about their services and charges.
Please note that the details supplied here is based on basic knowledge and may not show the most current updates or modifications to the ERC. It’s important to consult with a tax professional or check out the official IRS website for the most updated and precise details concerning eligibility, declaring procedures, and offered assistance.
Less than 100. The credit is based if the company had 100 or less staff members on average in 2019.
on earnings paid to all employees whether they actually worked or not. Simply put, even if the.
staff members worked full time and got paid for full-time work, the company still gets the credit.
Greater than 100. If the company had more than 100 workers on average in 2019, then the credit is.
enabled just for earnings paid to workers who did not work throughout the calendar quarter.
In both cases, “earnings” includes not simply cash payments but likewise a portion of the expense of employer.
provided healthcare. Covid-19 Employee Retention Credits
Payment.
Employers can be immediately compensated for the credit by reducing the quantity of payroll taxes they.