Lets talk first about Employee Retention Credit Accrual Or Cash Basis :
Our group here what do these people doing everybody in this room is assisting teach individuals about ERC and uh constantly supply a lovely breakfast and have people really find out about the program we need to head to the space where we have the ability to display some of the checks that we are getting for business and I wish to see that what is this this is uh hundreds of countless dollars actually Kevin numerous millions of dollars so these are replicate copies of the letters that go to clients validating that the check is on the method I imply you understand if you simply start to take a look at some of these here I imply this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s simply I indicate think about how many 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 verified and the check is on the mail in the mail from the internal revenue service heading to the client so that’s how you’re able to track it you know when you
get this you understand the check is gone for sure which’s when they pay so they don’t pay anything until they actually receive the cash they don’t pay bottom line Wonder trust anything till this letter is confirmed the check is on the way they deposit it into their savings account and they can truly rely on Wonder trust that the process has been completed and the number of you believe you’ve processed since 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 require 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 Terrific here you’re at my YouTube channel we’re talking about something actually important today the worker retention credit which most of you have actually never heard of I certainly hadn’t heard of it until extremely recently and learned a lot about it since this is most likely the lowest cost of capital for any small company anywhere
anytime if you have employees in between five and five hundred so I’ve got the specialist 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 not easy this isn’t like PPP we just phone your bank supervisor and say offer 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 have actually become yes the Ambassador and paid representative for this I like this program it’s going away very soon you got to discover everything about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply start there so during the Trump Administration when President Trump was enacted they developed 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 practically everybody 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.
correct the cash money payroll tax refund okay go on sorry I just have to make certain we got that point I mean that’s a big difference a loan versus cash money I like cash cash that’s what we’re discussing 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 original cares Act is the ERC and yes Kevin it is a beautiful difficult 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 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 employees right you had to have actually owned an organization but it’s based upon you having W-2 staff members in America not 10.99. so as long as you had W-2 workers and you paid federal payroll taxes that’s why you would be eligible so you need to be on payroll in 2020 on the W-2 and you need 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 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 money how much can you return per employee that was on a W-2 in those six quarters so the computation in 2020 to be exact Kevin is 50 of the worker’s income to a maximum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers escalated to 70 of the worker’s wage to a maximum of seven thousand per quarter how did that happen um they simply altered the rules in.
2021 versus since the chaos of the pandemic so they wished 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 after that what takes place 21 000 Max in 2021 oh that’s how you develop twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty 6 thousand dollars per employee that is because that’s a lot of money it is now there’s a caveat here the PPP cash would need to be minimized from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would decrease the 26 000 so what we’re seeing typically Kevin is if you took PPP money someplace around 10 thousand dollars a person so let’s say hypothetically you owned a dining establishment in New York City where I’m from and you had a hundred employees and you took PPP money you would still get a million dollar in the mail from the IRS so it’s substantial obviously now the huge concern is why does no one know about this because appearance when I first became aware of this when I initially met Josh you understand I have actually got lots of investments in great deals of business I’m a major supporter for entrepreneurship in America and make many lots of financial investments in entrepreneurs of which numerous suffered through the pandemic when I initially heard about this I called BS I do not think it because I utilize the PPP we went through the money 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 should have and we used them sensibly to survive during the pandemic so when I heard about this I said nah it can’t be true however when I dug around I even called to my political leader friends Guv Senators they didn’t know about it I suggest that’s how you understand that’s how false information is that there’s no information out there then a bunch of individuals informed me well you can’t get it because you took the PPP likewise not real so let’s ask Josh why does nobody know about the staff member retention credit you understand what’s interesting you’re speaking about the banks Kevin since in the PPP loan process 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 procedure that’s all um and here there was turmoil because remember in the original cares act you might not do both programs so if you had actually 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 ever made it clear to anybody 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 companies yeah a few of them are doing it as a payroll company your accountant no your accountant’s never done this before unless you have an account that entered into this business and bottom line my firm Kevin has been in business since 2009 and we have actually been working with the federal government and the state government to recover money for Fortune 500 Fortune 1000 business so a lot of our huge big corporate clients have actually worked with bottom line to recover other government programs we have actually done sales tax and utilize tax joblessness tax work opportunity tax credits research and development tax credits unclaimed home real estate tax all of these other government programs.
The staff member retention tax credit is a broad based refundable tax credit designed to encourage.
companies to keep employees on their payroll. The credit is 50% of approximately $10,000 in wages paid by an.
employer whose company is fully or partially suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is offered to all employers regardless of size consisting of tax exempt organizations. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
companies who take Small Business Loans.
2. To qualify, the company needs to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s company is fully or partly suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the similar quarter in 2019. As soon as the.
company’s gross invoices exceed 80% of a similar quarter in 2019 they no longer qualify.
after completion of that quarter.
Computation of the Credit.
The quantity of the credit is 50% of the certifying wages paid up to $10,000 in total.
It is effective for incomes paid after March 13th and prior to December 31, 2020.
The meaning of certifying wages varies by whether an employer had, typically, basically than.
100 staff members in 2019.
Companies that focus on ERC filing help usually provide proficiency and support to help companies browse the complex process of declaring the credit. They can use numerous services, including:.
How is the employee retention credit calculated? Employee Retention Credit Accrual Or Cash Basis
Eligibility Assessment: These companies will assess your company’s eligibility for the ERC based on elements such as your market, revenue, and operations. They can help identify if you meet the requirements for the credit and determine the maximum credit amount you can claim.
Paperwork and Estimation: ERC filing services will assist in collecting the essential documentation, such as payroll records and monetary declarations, to support your claim. They will also assist compute the credit amount based upon qualified salaries and other qualifying expenditures.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for previous quarters, these companies can examine your previous payroll records and financials to recognize possible chances for retroactive credits. They can help you change previous tax returns to claim these refunds.
Filing Assistance: Companies concentrating on ERC filings will prepare and send the required types and paperwork on your behalf. This consists of finishing Form 941 or any other required tax return.
Compliance and Updates: ERC guidelines and guidance have actually progressed in time. These business remain updated with the latest modifications and guarantee that your filings adhere to the most existing guidelines. If the IRS demands additional information or conducts an audit associated to your ERC claim, they can likewise offer ongoing support.
It is essential to research and veterinarian any business providing ERC filing help to ensure their trustworthiness and knowledge. Try to find established companies with experience in tax and payroll services, or consider connecting to relied on accounting firms or tax specialists who use ERC submitting assistance.
Keep in mind that while these companies can offer 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 choices and guarantee accurate filings.
The Worker Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief steps. The objective of the ERC is to encourage businesses to maintain and pay their staff members during the pandemic, even if their operations have actually been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to qualified companies, including for-profit services, tax-exempt organizations, and particular governmental entities. To certify, companies need to fulfill one of two requirements:.
The business operations were fully or partly suspended due to a federal government order related to COVID-19.
The business experienced a substantial decline in gross invoices. As mentioned earlier, for 2021, a substantial decrease is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decline in gross invoices compared to the very same quarter in 2019, or a 20% decline 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 amounts to a percentage (as much as 70%) of certified salaries paid to workers, consisting of particular health insurance expenses. The maximum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, organizations that received an Income Defense Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 enables organizations to declare the ERC even if they got a PPP loan. The same wages can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively broadened and enhanced, allowing eligible companies to declare the credit for certified incomes paid as far back as March 13, 2020. This retroactive provision supplies a chance for businesses to modify prior-year tax returns and get refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their employment income tax return, typically Form 941. If the credit surpasses the quantity of work taxes owed, the excess can be refunded to the employer.
It is necessary to note that the ERC provisions and eligibility requirements have developed over time. The best course of action is to speak with a tax expert or visit the official internal revenue service site for the most detailed and up-to-date information relating to the ERC, consisting of any recent legislative changes or updates.
To qualify for the ERC, an organization must meet one of the following requirements:.
Business operations were completely or partly suspended due to a federal government order related to COVID-19.
The business experienced a substantial decline in gross invoices. For 2021, a considerable decrease is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decrease is specified as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the instantly preceding quarter.
The ERC is offered to organizations of all sizes, consisting of tax-exempt organizations, however there are some exceptions. Federal government entities and companies that received a PPP loan might have restrictions on declaring the credit.
The process for claiming the ERC includes finishing the essential forms and consisting of the credit on your work income tax return (generally Type 941). The exact time it takes to process the credit can vary based on several elements, including the complexity of your organization and the workload of the internal revenue service. It’s advised to speak with a tax professional for assistance specific to your situation.
There are a number of companies that can aid with the procedure of declaring the ERC. These include accounting companies, tax advisory services, and payroll provider. Some widely known business that provide help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research study and get in touch with these business directly to inquire about their charges and services.
Please note that the information offered here is based on basic knowledge and might not show the most recent updates or modifications to the ERC. It’s important to speak with a tax professional or visit the official internal revenue service site for the most precise and current info concerning eligibility, claiming procedures, and readily available help.
Less than 100. The credit is based if the company had 100 or fewer workers on average in 2019.
on salaries paid to all staff members whether they in fact worked or not. In other words, even if the.
staff members worked full-time and made money for full-time work, the employer still gets the credit.
Greater than 100. The credit is if the company had more than 100 staff members on average in 2019.
allowed just for wages paid to staff members who did not work during the calendar quarter.
In both cases, “salaries” includes not just money payments however also a part of the cost of company.
provided healthcare. Employee Retention Credit Accrual Or Cash Basis
Companies can be instantly reimbursed for the credit by reducing the amount of payroll taxes they.