Lets talk first about Employee Retention Credit Care Act :
Our team here what do these men doing everyone in this room is helping teach people about ERC and uh constantly supply a beautiful breakfast and have people truly discover the program we need to head to the room 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 millions of dollars actually Kevin numerous millions of dollars so these are replicate copies of the letters that go to customers confirming that the check is on the way I imply you know if you simply begin 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 imply 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 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 have the ability 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 money they don’t pay bottom line Wonder trust anything till this letter is validated the check is on the method they deposit it into their savings account and they can really rely on Wonder trust that the procedure has been ended up and how many you think you have actually 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 which’s what you require you require professionals 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 the majority of you have actually never ever become aware of I definitely hadn’t become aware of it up until extremely recently and learned a lot about it due to the fact that this is probably the lowest expense of capital for any small company anywhere
anytime if you have employees in between five and five hundred so I’ve 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 hard this isn’t like PPP we just phone your bank supervisor and say offer me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to inform all of us about it and how to get it and why I’ve become yes the Ambassador and paid representative for this I enjoy this program it’s going away soon you got to learn everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply start there so throughout the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act offered organizations 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 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 fine go on sorry I simply have to make sure we got that point I mean that’s a big distinction a loan versus money money I like money money that’s what we’re speaking about okay 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 gorgeous tough 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 seems like to me if it’s a if it’s worker retention credit that person had to be an employee so I’m going to make the Assumption this money is not for the owner not for people on the cap table not for investors it’s for workers right you needed to have actually owned a business however it’s based upon you having W-2 workers 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 first six months of 2021 on the W-2 appropriate so there were 6 quarters the program was open well stroll us through the 6 quarters so you had quarters two three and four of 2020 and you had quarters one two and 3 of 2021. okay 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 just how much can you get back per employee that was on a W-2 in those six quarters so the estimation in 2020 to be precise Kevin is 50 of the worker’s salary to a maximum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s wage to a maximum of 7 thousand per quarter how did that take place um they simply altered the rules in.
2021 versus since 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 five thousand Max and after that what happens 21 000 Max in 2021 oh that’s how you create twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty 6 thousand dollars per worker that is since that’s a lot of money it is now there’s a caveat here the PPP money would need to be reduced from the twenty 6 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 money someplace around ten thousand dollars an individual so let’s say hypothetically you owned a dining establishment in New York City where I’m from and you had a hundred workers and you took PPP money you would still get a million dollar in the mail from the IRS so it’s huge clearly now the big question is why does nobody know about this due to the fact that look when I initially found out about this when I initially fulfilled Josh you know I have actually got great deals of financial investments in great deals of business I’m a major advocate for entrepreneurship in America and make lots of many investments in business owners of which many suffered through the pandemic when I initially found out about this I called BS I don’t think it since I use the PPP we went through the money center Banks to get it it was really 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 stated nah it can’t be true however when I dug around I even called to my politician friends Governor Senators they didn’t know about it I mean that’s how you know that’s how misinformation is that there’s no details out there then a lot of individuals told me well you can’t get it because you took the PPP likewise not true so let’s ask Josh why does no one know 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 very 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 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 turmoil due to the fact that keep in mind in the original cares act you could refrain from doing both programs so if you had done PPP you could refrain from doing ERC in the original program and when they changed the law in 2021 the banks were not doing ERC due to the fact that it’s not alone so you’re getting a tax refund so the government never ever 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 done it before do the banks do it nope the banks don’t do it the payroll business yeah a few of them are doing it as a payroll business your accountant no your accounting professional’s never ever done this before unless you have an account that went into this service and bottom line my firm Kevin has been in business considering 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 huge business clients have actually worked 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 employee retention tax credit is a broad based refundable tax credit developed to encourage.
employers to keep staff members on their payroll. The credit is 50% of approximately $10,000 in earnings paid by an.
Since of COVID-19 or whose gross invoices, company whose company is completely or partly suspended.
decline by more than 50%.
1. The credit is readily available to all companies regardless of size consisting of tax exempt companies. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) little.
services who take Small Business Loans.
2. To certify, the employer needs to satisfy one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s organization is completely or partly suspended by government order due to COVID-19.
during the calendar quarter or.
o the company’s gross invoices are below 50% of the similar quarter in 2019. Once the.
company’s gross invoices exceed 80% of a similar quarter in 2019 they no longer certify.
after the end of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the certifying incomes paid up to $10,000 in total.
It works for salaries paid after March 13th and prior to December 31, 2020.
The definition of certifying earnings differs by whether an employer had, on average, basically than.
100 staff members in 2019.
Companies that focus on ERC filing support normally supply expertise and assistance to help businesses browse the complex procedure of claiming the credit. They can use numerous services, including:.
How is the employee retention credit calculated? Employee Retention Credit Care Act
Eligibility Assessment: These companies will evaluate your business’s eligibility for the ERC based on factors such as your market, revenue, and operations. If you meet the requirements for the credit and recognize the optimum credit amount you can declare, they can assist figure out.
Paperwork and Computation: ERC filing services will assist in gathering the needed documents, such as payroll records and financial declarations, to support your claim. They will likewise help determine the credit quantity based upon qualified incomes and other qualifying costs.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for previous quarters, these business can examine your past payroll records and financials to recognize possible chances for retroactive credits. They can assist you amend prior tax returns to claim these refunds.
Filing Support: Companies specializing in ERC filings will prepare and send the necessary forms and paperwork in your place. This consists of completing Type 941 or any other necessary tax forms.
Compliance and Updates: ERC regulations and guidance have actually developed with time. These companies stay upgraded with the current modifications and guarantee that your filings comply with the most current guidelines. If the Internal revenue service requests additional information or performs an audit associated to your ERC claim, they can also offer ongoing support.
It is essential to research study and vet any company offering ERC filing help to ensure their trustworthiness and knowledge. Search for recognized companies with experience in tax and payroll services, or consider connecting to trusted accounting firms or tax specialists who provide ERC filing assistance.
Keep in mind that while these companies can provide valuable assistance, it’s constantly a great concept to have a standard understanding of the ERC requirements and process yourself. This will assist you make notified decisions and make sure 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 goal of the ERC is to encourage organizations to maintain and pay their staff members during 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 companies, including for-profit businesses, tax-exempt organizations, and certain governmental entities. To certify, employers should meet one of two criteria:.
Business operations were totally or partially suspended due to a government order related to COVID-19.
The business experienced a significant decline in gross invoices. As pointed out previously, for 2021, a significant decrease 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 defined 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.
Credit Amount: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit amount is equal to a portion (as much as 70%) of certified incomes paid to staff members, consisting of particular health insurance expenditures. The optimum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, companies that received a Paycheck Security Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 enables organizations to declare the ERC even if they received a PPP loan. The same salaries can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and enhanced, allowing qualified companies to declare the credit for qualified salaries paid as far back as March 13, 2020. This retroactive provision supplies a chance for businesses to modify 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 Form 941. If the credit goes beyond the amount of work taxes owed, the excess can be refunded to the company.
It is necessary to keep in mind that the ERC arrangements and eligibility criteria have actually evolved in time. The very best strategy is to talk to a tax professional or visit the official IRS site for the most updated and in-depth information regarding the ERC, consisting of any current legislative changes or updates.
To receive the ERC, a company needs to fulfill one of the following requirements:.
The business operations were fully or partially suspended due to a federal government order related to COVID-19.
Business experienced a significant decrease in gross receipts. For 2021, a significant decrease is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decline in gross invoices compared to the very same quarter in 2019, or a 20% decline in gross receipts compared to the right away preceding quarter.
The ERC is available to organizations of all sizes, consisting of tax-exempt companies, however there are some exceptions. Government entities and companies that received a PPP loan may have constraints on declaring the credit.
The procedure for declaring the ERC involves finishing the required kinds and consisting of the credit on your employment tax return (typically Type 941). The exact time it requires to process the credit can differ based upon several elements, consisting of the intricacy of your service and the work of the internal revenue service. It’s advised to speak with a tax professional for guidance particular to your circumstance.
There are several companies that can aid with the process of declaring the ERC. These include accounting firms, tax advisory services, and payroll service providers. Some well-known companies that use support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research and get in touch with these companies directly to ask about their fees and services.
Please note that the information provided here is based on general understanding and might not reflect the most current updates or modifications to the ERC. It is essential to speak with a tax professional or visit the official internal revenue service site for the most precise and updated details concerning eligibility, declaring treatments, and readily available assistance.
Less than 100. If the company had 100 or fewer workers usually in 2019, then the credit is based.
on salaries paid to all employees whether they really worked or not. Simply put, even if the.
workers worked full time and got paid 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.
enabled only for incomes paid to employees who did not work during the calendar quarter.
In both cases, “salaries” consists of not just cash payments but likewise a portion of the expense of employer.
provided healthcare. Employee Retention Credit Care Act
Companies can be right away repaid for the credit by reducing the amount of payroll taxes they.