Lets talk first about Covid-related Employee Retention Credit Disallowed Expenses Deduction :
Our team here what do these guys doing everybody in this room is helping teach individuals about ERC and uh always offer a stunning breakfast and have individuals really learn more about the program we should head to the space where we are able to show a few of the checks that we are getting for companies and I wish to see that what is this this is uh hundreds of millions of dollars literally Kevin hundreds of countless 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 start 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 imply consider 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 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’re able to track it you understand when you
receive this you understand the check is gone for sure and that’s when they pay so they don’t pay anything till they really receive the cash they do not pay bottom line Wonder trust anything until this letter is confirmed the check is on the way they transfer it into their savings account and they can truly rely on Wonder trust that the procedure has been ended up and the number of you believe you have actually processed considering that 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 need you need professionals 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 Fantastic here you’re at my YouTube channel we’re talking about something actually important today the worker retention credit which the majority of you have never heard of I definitely hadn’t become aware of it until really just recently and learned a lot about it because this is most likely the most affordable cost of capital for any small business anywhere
anytime if you have workers in between 5 and five hundred so I have actually got the professional 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 difficult this isn’t like PPP we just contact your bank supervisor 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 all of us about it and how to get it and why I have actually ended up being yes the Ambassador and paid spokesperson for this I like this program it’s going away very soon you got to find out everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just begin there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act provided services 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone it makes a huge difference right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the cash cash payroll tax refund alright go on sorry I just need to ensure we got that point I suggest that’s a big difference a loan versus money cash I like cash 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 initial cares Act is the ERC and yes Kevin it is a stunning difficult check in the mail where you get real cash from the IRS all right so let’s talk 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 had to be an employee so I’m going to make the Presumption this money is not for the owner not for people on the cap table not for investors it’s for staff members right you had to have owned a company but 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 first 6 months of 2021 on the W-2 correct so there were six quarters the program was open well walk us through the 6 quarters so you had quarters 2 3 and 4 of 2020 and you had quarters one two and 3 of 2021. all right so that’s how it’s measured you need to be on the W-2 during that duration now let’s talk my favorite part cash how much can you get back per staff member that was on a W-2 in those six quarters so the estimation in 2020 to be exact Kevin is 50 of the worker’s wage to a maximum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers increased to 70 of the worker’s salary to an optimum of seven thousand per quarter how did that take place um they simply changed the rules in.
2021 versus due to the fact that the turmoil of the pandemic so they wanted to even get more to keep those employees 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 occurs 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 six thousand dollars per staff member that is since that’s a lot of money it is now there’s a caution here the PPP cash would need to be lowered from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would decrease the 26 000 so what we’re seeing on average Kevin is if you took PPP money somewhere around ten 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 employees and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s huge certainly now the huge concern is why does no one know about this because look when I first became aware of this when I first met Josh you know I’ve got great deals of investments in great deals of business I’m a major supporter for entrepreneurship in America and make many many investments in entrepreneurs of which many suffered through the pandemic when I initially became aware of this I called BS I don’t think it due to the fact that I use the PPP we went through the cash center Banks to get it it was really easy to do we had our CEOs call the banks they got their loans which were well should have and we used them sensibly to stay alive during the pandemic so when I heard about this I said nah it can’t be true but when I dug around I even called to my politician good friends Guv Senators they didn’t know about it I imply 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 because you took the PPP also 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 process 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 big banks in our country and they would process process 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 since remember in the original cares act you might not do both programs so if you had actually done PPP you might 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 anybody about how to.
do this does your CFO know how to do this not truly he or she’s never done it in the past do the banks do it nope the banks do not 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 ever done this before unless you have an account that went into this service and bottom line my firm Kevin has actually been in business because 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 huge huge business customers have actually dealt with bottom line to recover other federal government programs we’ve done sales tax and use tax unemployment tax work opportunity tax credits research and development tax credits unclaimed property real estate 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 earnings paid by an.
company whose organization is totally or partially suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
1. The credit is offered to all employers despite size including tax exempt companies. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) little.
businesses who take Small company Loans.
2. To qualify, the employer has to satisfy one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s organization is fully or partially suspended by federal 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. As soon as the.
company’s gross receipts go above 80% of a similar quarter in 2019 they no longer qualify.
after the end of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the qualifying earnings paid up to $10,000 in overall.
It is effective for wages paid after March 13th and before December 31, 2020.
The meaning of certifying incomes varies by whether a company had, typically, more or less than.
100 workers in 2019.
Companies that focus on ERC filing help normally supply know-how and assistance to assist companies browse the intricate process of claiming the credit. They can offer numerous services, including:.
How is the employee retention credit calculated? Covid-related Employee Retention Credit Disallowed Expenses Deduction
Eligibility Assessment: These business will examine your service’s eligibility for the ERC based on factors such as your industry, income, and operations. If you satisfy the requirements for the credit and determine the maximum credit amount you can claim, they can help figure out.
Paperwork and Estimation: ERC filing services will help in gathering the essential documentation, such as payroll records and monetary statements, to support your claim. They will also assist determine the credit amount based upon qualified salaries and other qualifying expenditures.
Retroactive Claim Review: If you are qualified to claim the ERC for prior quarters, these business can evaluate your past payroll records and financials to recognize prospective chances for retroactive credits. They can help you amend prior tax returns to declare these refunds.
Filing Assistance: Companies specializing in ERC filings will prepare and send the essential forms and paperwork on your behalf. This includes finishing Type 941 or any other necessary tax return.
Compliance and Updates: ERC policies and guidance have actually progressed gradually. These business remain upgraded with the current changes and ensure that your filings abide by the most current standards. They can also supply continuous support if the IRS demands extra info or carries out an audit related to your ERC claim.
It is very important to research and veterinarian any company providing ERC filing help to guarantee their reliability and expertise. Try to find established firms with experience in tax and payroll services, or consider connecting to relied on accounting firms or tax specialists who offer ERC filing assistance.
Remember that while these companies can supply important assistance, it’s constantly a good concept to have a basic understanding of the ERC requirements and process yourself. This will help you make informed decisions and make sure accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief procedures. The objective of the ERC is to motivate companies to keep and pay their workers throughout the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to qualified employers, including for-profit businesses, tax-exempt organizations, and particular governmental entities. To certify, employers need to satisfy one of two requirements:.
Business operations were fully or partially suspended due to a government order related to COVID-19.
The business experienced a substantial decrease in gross receipts. As discussed previously, for 2021, a considerable decrease is specified as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross receipts compared to the right away 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 (as much as 70%) of qualified salaries paid to staff members, including specific health insurance expenses. 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 received an Income Protection Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 enables companies to claim the ERC even if they received a PPP loan. The same incomes can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and boosted, permitting qualified employers to declare the credit for certified wages paid as far back as March 13, 2020. This retroactive arrangement supplies a chance for companies to change prior-year tax returns and get refunds.
Claiming the Credit: Companies can declare the ERC by reporting it on their work income tax return, typically Kind 941. If the credit surpasses the quantity of work taxes owed, the excess can be reimbursed to the company.
It is necessary to keep in mind that the ERC provisions and eligibility criteria have actually developed over time. The best course of action is to seek advice from a tax expert or check out the official IRS website for the most comprehensive and updated details concerning the ERC, including any recent legislative modifications or updates.
To qualify for the ERC, a company needs to fulfill among the following requirements:.
Business operations were fully or partly suspended due to a government order related to COVID-19.
Business experienced a substantial decline in gross invoices. For 2021, a significant decline is defined as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a substantial decline is specified as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decline in gross invoices compared to the immediately preceding quarter.
The ERC is available to services of all sizes, consisting of tax-exempt companies, however there are some exceptions. Federal government entities and services that received a PPP loan might have limitations on declaring the credit.
The process for claiming the ERC involves completing the essential types and including the credit on your employment income tax return (normally Form 941). The exact time it takes to process the credit can vary based on a number of factors, consisting of the intricacy of your service and the workload of the internal revenue service. It’s recommended to talk to a tax professional for guidance specific to your situation.
There are several business that can help with the procedure of claiming the ERC. Some popular companies that use support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the details offered here is based on general knowledge and might not show the most current updates or changes to the ERC. It’s important to talk to a tax expert or go to the main IRS website for the most updated and accurate info regarding eligibility, declaring procedures, and readily available help.
Less than 100. The credit is based if the employer had 100 or fewer workers on average in 2019.
on earnings paid to all employees whether they in fact worked or not. In other words, 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 employer had more than 100 employees on average in 2019, then the credit is.
allowed only for wages paid to workers who did not work throughout the calendar quarter.
In both cases, “wages” includes not just cash payments however likewise a part of the expense of employer.
supplied health care. Covid-related Employee Retention Credit Disallowed Expenses Deduction
Employers can be immediately compensated for the credit by minimizing the quantity of payroll taxes they.