Lets talk first about Employee Retention Credit California Tax Treatment :
Our team here what do these men doing everybody in this space is helping teach people about ERC and uh constantly offer a gorgeous breakfast and have individuals really learn about the program we should 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 millions of dollars literally Kevin hundreds of countless dollars so these are replicate copies of the letters that go to customers confirming that the check is on the method I indicate you know if you simply start to 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 mean it’s just I suggest consider how many real clients 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 confirmed and the check is on the mail in the mail from the IRS heading to the customer so that’s how you’re able to track it you know when you
receive this you understand the check is gone for sure which’s when they pay so they don’t pay anything until they actually get the cash they don’t pay bottom line Wonder trust anything up until this letter is confirmed the check is on the method they transfer it into their checking account and they can really rely on Wonder trust that the procedure has been completed and how many you think you have actually processed because you started this we’re about 35 000 of these for
about six billion dollars wow so plainly they understand what they’re doing which’s what you need 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 Fantastic here you’re at my YouTube channel we’re talking about something really crucial today the employee retention credit which the majority of you have actually never ever heard of I certainly had not heard of it up until very just recently and discovered a lot about it since this is probably the lowest cost of capital for any small company anywhere
anytime if you have employees between 5 and five hundred so I’ve got the specialist with me this is Josh Fox he’s the founder and CEO of bottom line Concepts they’re the largest processor of these ERC credits this is a 170 page program so it’s difficult this isn’t like PPP we just call your bank manager and state offer me a loan it doesn’t 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 spokesperson for this I love this program it’s disappearing soon you got to learn everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply begin there so throughout the Trump Administration when President Trump was enacted they developed the cares Act and the cares act provided businesses three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost 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.
correct the cash money payroll tax refund fine go on sorry I simply have to make certain we got that point I suggest that’s a big difference a loan versus money 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 original cares Act is the ERC and yes Kevin it is a stunning tough check in the mail where you get actual cash from the internal revenue service all right so let’s discuss how it works due to the fact that it seems like to me if it’s a if it’s worker retention credit that individual needed 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 needed to have 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 employees 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 right so there were 6 quarters the program was open well walk us through the six quarters so you had quarters 2 three and 4 of 2020 and you had quarters one 2 and three of 2021. alright so that’s how it’s measured you need to be on the W-2 during that duration now let’s talk my preferred part money 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 precise Kevin is 50 of the staff member’s wage to an optimum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers increased to 70 of the staff member’s wage to an optimum of seven thousand per quarter how did that happen um they just altered the rules in.
2021 versus since the mayhem of the pandemic so they wished 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 up to five thousand Max and then what happens 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 six thousand dollars per worker that is because that’s a lot of cash 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 lower the 26 000 so what we’re seeing typically Kevin is if you took PPP cash somewhere around 10 thousand dollars an individual so let’s say 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 IRS so it’s substantial undoubtedly now the huge question is why does no one learn about this since look when I initially heard about this when I first met Josh you understand I’ve got great deals of investments in lots of companies I’m a significant supporter for entrepreneurship in America and make many many financial investments in business owners of which many suffered through the pandemic when I first heard about this I called BS I don’t believe it because I use the PPP we went through the money 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 been worthy of and we used them wisely to survive throughout the pandemic so when I heard about this I said nah it can’t hold true but when I dug around I even called to my politician good friends Governor Senators they didn’t know about it I mean that’s how you understand that’s how false information is that there’s no details out there then a bunch of people told me well you can’t get it because you took the PPP likewise not real so let’s ask Josh why does no one understand about the staff member retention credit you understand what’s fascinating you’re talking about the banks Kevin due to the fact that in the PPP loan procedure the federal government made it very clear that if you desired a PPP loan you would call Wells Fargo Citibank Bank of America any of the huge 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 process that’s all um and here there was chaos because keep in mind in the initial cares act you could refrain from doing both programs so if you had actually done PPP you could not do ERC in the initial 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 government never made it clear to anyone about how to.
do this does your CFO know how to do this not actually she or he’s never done it in the past do the banks do it nope the banks don’t do it the payroll business yeah some of them are doing it as a payroll company your accountant no your accountant’s never ever done this before unless you have an account that entered into this business and bottom line my company Kevin has actually been in business given that 2009 and we have actually been working with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 companies so a great deal of our big huge corporate clients have worked with bottom line to recuperate other federal government programs we have actually done sales tax and utilize tax unemployment tax work opportunity tax credits research and development tax credits unclaimed property real estate tax all of these other government programs.
The worker retention tax credit is a broad based refundable tax credit created to encourage.
companies to keep staff members on their payroll. The credit is 50% of up to $10,000 in salaries paid by an.
employer whose company is totally or partially suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
1. The credit is available to all employers regardless of size consisting of tax exempt organizations. There are.
just 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
organizations who take Small company Loans.
2. To qualify, the employer has to fulfill one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s organization is completely or partly suspended by 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 go above 80% of a similar 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 total.
It works for incomes paid after March 13th and prior to December 31, 2020.
The meaning of certifying wages varies by whether an employer had, usually, more or less than.
100 staff members in 2019.
Business that specialize in ERC filing assistance usually provide knowledge and assistance to help companies browse the intricate procedure of declaring the credit. They can provide different services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit California Tax Treatment
Eligibility Evaluation: These companies will examine your business’s eligibility for the ERC based upon aspects such as your market, income, and operations. They can assist figure out if you meet the requirements for the credit and recognize the optimum credit amount you can declare.
Documents and Computation: ERC filing services will assist in gathering the essential documentation, such as payroll records and financial declarations, to support your claim. They will likewise help determine the credit quantity based upon qualified wages and other qualifying costs.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for previous quarters, these business can examine your previous payroll records and financials to identify possible opportunities for retroactive credits. They can help you modify prior income tax return to claim these refunds.
Filing Help: Companies concentrating on ERC filings will prepare and submit the essential kinds and documentation in your place. This includes finishing Type 941 or any other required tax forms.
Compliance and Updates: ERC regulations and assistance have evolved over time. These companies stay upgraded with the latest changes and guarantee that your filings abide by the most existing guidelines. If the Internal revenue service requests extra info or carries out an audit related to your ERC claim, they can also offer continuous assistance.
It is very important to research and vet any company providing ERC filing assistance to guarantee their credibility and proficiency. Search for recognized companies with experience in tax and payroll services, or consider connecting to relied on accounting firms or tax professionals who provide ERC submitting assistance.
Remember that while these companies can provide valuable support, it’s constantly a great concept to have a basic understanding of the ERC requirements and process yourself. This will assist you make informed decisions and make sure precise filings.
The Worker Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief steps. The objective of the ERC is to motivate companies 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 available to eligible companies, consisting of for-profit businesses, tax-exempt companies, and specific governmental entities. To certify, companies need to satisfy one of two requirements:.
The business operations were fully or partially suspended due to a government order related to COVID-19.
Business experienced a substantial decrease in gross invoices. As discussed previously, for 2021, a considerable decrease is specified as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019, or a 20% decrease 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 amount amounts to a portion (as much as 70%) of certified earnings paid to employees, including certain 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: Initially, organizations that received a Paycheck Security Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 allows services to claim the ERC even if they received a PPP loan. The same earnings can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and improved, allowing qualified companies to declare the credit for certified wages paid as far back as March 13, 2020. This retroactive arrangement provides an opportunity for organizations to modify prior-year tax returns and receive refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their work income tax return, normally Form 941. If the credit surpasses the amount of work taxes owed, the excess can be reimbursed to the company.
It is essential to keep in mind that the ERC arrangements and eligibility criteria have actually developed gradually. The best strategy is to talk to a tax professional or check out the main internal revenue service site for the most comprehensive and current info relating to the ERC, consisting of any current legislative modifications or updates.
To receive the ERC, an organization needs to meet among the following criteria:.
The business operations were fully or partly suspended due to a federal government order related to COVID-19.
Business experienced a substantial decline in gross invoices. For 2021, a substantial decline is specified as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a significant decrease is specified 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 immediately preceding quarter.
The ERC is offered to services of all sizes, consisting of tax-exempt companies, however there are some exceptions. Government entities and businesses that got a PPP loan may have constraints on declaring the credit.
The procedure for declaring the ERC involves finishing the necessary kinds and consisting of the credit on your employment income tax return (generally Kind 941). The exact time it requires to process the credit can differ based on several factors, consisting of the intricacy of your organization and the work of the internal revenue service. It’s advised to speak with a tax expert for assistance specific to your scenario.
There are numerous companies that can assist with the process of claiming the ERC. These include accounting firms, tax advisory services, and payroll company. Some popular companies that offer assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research study and get in touch with these business straight to inquire about their services and costs.
Please note that the info offered here is based upon basic understanding and might not show the most recent updates or modifications to the ERC. It is essential to talk to a tax expert or visit the main IRS website for the most accurate and up-to-date information concerning eligibility, claiming treatments, and readily available support.
Less than 100. If the employer had 100 or less employees on average in 2019, then the credit is based.
on wages paid to all staff members whether they really worked or not. Simply put, even if the.
workers worked full-time and made money for full time work, the company still gets the credit.
Greater than 100. The credit is if the company had more than 100 workers on average in 2019.
allowed just for earnings paid to workers who did not work throughout the calendar quarter.
In both cases, “incomes” includes not just money payments but likewise a portion of the expense of employer.
supplied health care. Employee Retention Credit California Tax Treatment
Companies can be immediately repaid for the credit by lowering the amount of payroll taxes they.