Lets talk first about Employee Retention Credit 2022 Cares Act :
Our group here what do these guys doing everyone in this room is helping teach individuals about ERC and uh always supply a beautiful breakfast and have individuals actually learn more about the program we should head to the space where we are able to show some of the checks that we are getting for business and I ‘d like to see that what is this this is uh numerous millions of dollars literally Kevin numerous millions of dollars so these are duplicate copies of the letters that go to clients confirming that the check is on the way I imply you know if you simply start to take a look at some of these here I suggest this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s simply I indicate think of the number of actual clients that went through the program yeah this is the very end this is the celebration at the end when the check is validated the numbers are verified 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 know the check is opted for sure which’s when they pay so they don’t pay anything till they actually receive the money they do not pay bottom line Wonder trust anything up until this letter is verified the check is on the method they deposit it into their savings account and they can truly rely on Wonder trust that the process has been finished and how many you believe you’ve processed considering that you began this we have to do with 35 000 of these for
about six billion dollars wow so plainly 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 one of these that’s what matters all right Mr Fantastic here you’re at my YouTube channel we’re discussing something truly crucial today the employee retention credit which most of you have never heard of I certainly hadn’t heard of it until very recently and discovered a lot about it since this is probably the most affordable cost of capital for any small business anywhere
anytime if you have staff members in 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 Concepts they’re the biggest processor of these ERC credits this is a 170 page program so it’s challenging this isn’t like PPP we just call up your bank supervisor and state offer 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 love this program it’s disappearing soon you got to find out all about it let’s talk worker retention credit Josh Fox what is an ERC let’s just start there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act provided companies 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everybody 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 cash payroll tax refund okay go on sorry I simply need to make sure we got that point I mean that’s a huge difference a loan versus cash money I like money cash that’s what we’re talking about all right 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 tough check in the mail where you get real cash from the internal revenue service all right so let’s talk about how it works because it seems like to me if it’s a if it’s employee retention credit that person had to be an employee so I’m going to make the Assumption this cash is not for the owner not for people on the cap table not for investors it’s for workers right you had to have owned a business however it’s based upon 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 six 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 four of 2020 and you had quarters one two and three of 2021. all right so that’s how it’s determined you need to be on the W-2 during that period now let’s talk my favorite part money just how much can you get back per employee that was on a W-2 in those 6 quarters so the calculation in 2020 to be precise Kevin is 50 of the employee’s salary to an optimum of 5 thousand dollars per staff member for the year of 2020 and in 2021 the numbers skyrocketed 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 because the turmoil 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 as much as 5 thousand Max and after that 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 5 thousand in twenty twenty that’s twenty six thousand dollars per staff member that is because that’s a lot 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 2 you would decrease the 26 000 so what we’re seeing typically Kevin is if you took PPP cash someplace around ten thousand dollars an individual so let’s state hypothetically you owned a restaurant in New york city City where I’m from and you had a hundred staff members and you took PPP money you would still get a million dollar in the mail from the internal revenue service so it’s substantial undoubtedly now the big concern is why does no one know about this since appearance when I first became aware of this when I first fulfilled Josh you understand I have actually got lots of financial investments in great deals of business I’m a significant advocate for entrepreneurship in America and make numerous lots of financial investments in business owners of which lots of suffered through the pandemic when I first found out about this I called BS I do not believe it due to the fact that 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 which were well deserved and we used them carefully to survive throughout the pandemic so when I heard about this I said nah it can’t be true but when I dug around I even contacted us to my politician buddies Governor Senators they didn’t know about it I indicate that’s how you know that’s how misinformation is that there’s no information out there then a bunch of people told me well you can’t get it since you took the PPP also not true so let’s ask Josh why does nobody learn about the employee retention credit you know what’s fascinating you’re talking about the banks Kevin because 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 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 process procedure that’s all um and here there was mayhem because remember in the initial cares act you could refrain from doing both programs so if you had actually done PPP you could refrain from doing ERC in the original 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 federal government never made it clear to any person about how to.
do this does your CFO know how to do this not actually he or she’s never done it previously 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 business your accountant no your accounting professional’s never done this before unless you have an account that entered into this company and bottom line my company Kevin has actually stayed in business given that 2009 and we’ve been working with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 companies so a lot of our huge big business clients have dealt with bottom line to recuperate other government programs we have actually done sales tax and utilize tax joblessness 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.
companies to keep staff members on their payroll. The credit is 50% of up to $10,000 in incomes paid by an.
employer whose business is totally or partly suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is available to all companies regardless of size including tax exempt organizations. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) little.
services 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 business is totally or partially suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are below 50% of the equivalent quarter in 2019. As soon as the.
company’s gross receipts exceed 80% of an equivalent quarter in 2019 they no longer qualify.
after the end of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the qualifying wages paid up to $10,000 in overall.
It works for incomes paid after March 13th and before December 31, 2020.
The definition of certifying earnings differs by whether an employer had, usually, basically than.
100 employees in 2019.
Companies that specialize in ERC filing assistance typically supply know-how and assistance to assist businesses navigate the complicated procedure of declaring the credit. They can use different services, including:.
How is the employee retention credit calculated? Employee Retention Credit 2022 Cares Act
Eligibility Evaluation: These business will assess your business’s eligibility for the ERC based upon aspects such as your industry, earnings, and operations. If you satisfy the requirements for the credit and identify the maximum credit quantity you can declare, they can assist identify.
Documentation and Computation: ERC filing services will help in gathering the needed documentation, such as payroll records and monetary statements, to support your claim. They will also assist determine the credit quantity based on qualified earnings and other certifying costs.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for previous quarters, these companies can examine your past payroll records and financials to recognize potential chances for retroactive credits. They can assist you change prior tax returns to declare these refunds.
Filing Help: Business focusing on ERC filings will prepare and submit the needed forms and paperwork in your place. This consists of completing Form 941 or any other required tax forms.
Compliance and Updates: ERC guidelines and guidance have evolved with time. These companies stay updated with the current changes and make sure that your filings abide by the most current guidelines. If the IRS requests extra info or conducts an audit related to your ERC claim, they can also supply ongoing assistance.
It is very important to research and vet any business using ERC filing support to ensure their reliability and know-how. Search for recognized firms with experience in tax and payroll services, or think about connecting to relied on accounting companies or tax experts who provide ERC filing assistance.
Bear in mind that while these companies can provide important help, it’s constantly an excellent idea to have a fundamental understanding of the ERC requirements and process yourself. This will assist you make informed choices and guarantee 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 organizations to maintain and pay their workers during the pandemic, even if their operations have been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is available to qualified employers, consisting of for-profit businesses, tax-exempt organizations, and particular governmental entities. To qualify, employers should fulfill one of two criteria:.
Business operations were completely or partially suspended due to a government order related to COVID-19.
Business experienced a substantial decrease in gross receipts. As discussed previously, for 2021, a substantial decrease is specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decline is specified 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 company’s share of Social Security taxes. The credit amount is equal to a percentage (approximately 70%) of certified salaries paid to employees, including certain health plan expenditures. 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, businesses that got an Income Security Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 enables businesses to claim the ERC even if they got a PPP loan. The exact same earnings can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and enhanced, enabling eligible employers to declare the credit for certified incomes paid as far back as March 13, 2020. This retroactive arrangement supplies a chance for organizations to change prior-year tax returns and get refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their work tax returns, typically Type 941. If the credit exceeds the quantity of employment taxes owed, the excess can be refunded to the company.
It is very important to note that the ERC provisions and eligibility requirements have developed gradually. 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 updated and detailed information concerning the ERC, consisting of any recent legal changes or updates.
To qualify for the ERC, a service needs to satisfy one of the following criteria:.
The business operations were totally or partly suspended due to a government order related to COVID-19.
The business experienced a considerable decline in gross invoices. For 2021, a considerable decline is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decline in gross receipts compared to the exact same quarter in 2019, or a 20% decrease in gross invoices compared to the right away preceding quarter.
The ERC is readily available to businesses of all sizes, consisting of tax-exempt companies, but there are some exceptions. Government entities and services that got a PPP loan may have constraints on claiming the credit.
The process for declaring the ERC includes completing the required kinds and consisting of the credit on your employment income tax return (usually Type 941). The exact time it requires to process the credit can differ based upon a number of elements, consisting of the intricacy of your service and the workload of the IRS. It’s suggested to talk to a tax professional for guidance particular to your circumstance.
There are several companies that can assist with the process of claiming the ERC. Some well-known business that provide support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the details supplied here is based upon general knowledge and may not reflect the most current updates or modifications to the ERC. It is very important to speak with a tax professional or visit the main internal revenue service website for the most accurate and current information relating to eligibility, declaring treatments, and readily available assistance.
Less than 100. If the company had 100 or less workers on average in 2019, then the credit is based.
on wages paid to all employees whether they actually worked or not. Simply put, even if the.
employees worked full-time and earned money 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 incomes paid to employees who did not work throughout the calendar quarter.
In both cases, “wages” includes not just cash payments however also a part of the expense of company.
provided health care. Employee Retention Credit 2022 Cares Act
Companies can be instantly repaid for the credit by lowering the quantity of payroll taxes they.