Lets talk first about Employee Retention Credit Cares Act :
Our team here what do these people doing everyone in this room is assisting teach people about ERC and uh always supply a stunning breakfast and have individuals actually find out about the program we need to head to the room where we have the ability to show some of the checks that we are getting for companies and I wish to see that what is this this is uh numerous countless dollars actually Kevin numerous millions of dollars so these are duplicate copies of the letters that go to customers confirming that the check is on the way I imply you understand if you just begin to look at a few of these here I indicate this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s simply I suggest think about the number of 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 validated and the check is on the mail in the mail from the IRS heading to the client so that’s how you have the ability 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 money they don’t pay bottom line Wonder trust anything until this letter is validated the check is on the method they transfer it into their savings account and they can truly rely on Wonder trust that the procedure has been ended up and how many you believe you’ve processed because you began this we have to do with 35 000 of these for
about 6 billion dollars wow so plainly they know what they’re doing which’s what you need you require 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 discussing something actually crucial today the worker retention credit which most of you have never heard of I certainly had not heard of it till extremely just recently and discovered a lot about it due to the fact that this is probably the most affordable cost of capital for any small company anywhere
anytime if you have staff members 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 simply call up your bank supervisor and state give me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to tell us all 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 disappearing very soon you got to learn all about it let’s talk worker retention credit Josh Fox what is an ERC let’s just begin there so during the Trump Administration when President Trump was enacted they created the cares Act and the cares act used companies 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everybody it makes a big difference right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the money cash payroll tax refund alright go on sorry I just need to make certain we got that point I mean that’s a big difference a loan versus cash cash I like cash money that’s what we’re talking about fine 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 difficult check in the mail where you get real money from the IRS 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 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 business but it’s based on you having W-2 workers in America not 10.99. so as long as you had W-2 staff members 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 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 three and four of 2020 and you had quarters one 2 and three of 2021. okay so that’s how it’s measured you have to be on the W-2 throughout that duration now let’s talk my preferred part cash how much can you return per worker that was on a W-2 in those 6 quarters so the computation in 2020 to be exact Kevin is 50 of the employee’s income to a maximum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers escalated to 70 of the worker’s wage to an optimum of 7 thousand per quarter how did that occur um they simply changed the rules in.
2021 versus since the chaos 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 after that what happens 21 000 Max in 2021 oh that’s how you come up with twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty 6 thousand dollars per staff member that is because that’s a great deal of cash it is now there’s a caveat here the PPP money would need to be decreased 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 on average Kevin is if you took PPP cash somewhere around 10 thousand dollars a person so let’s state hypothetically you owned a dining establishment in New york city City where I’m from and you had a hundred workers and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s huge clearly now the huge concern is why does nobody know about this because look when I initially heard about this when I initially satisfied Josh you know I have actually got lots of financial investments in great deals of companies I’m a major supporter for entrepreneurship in America and make many lots of investments in business owners of which numerous 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 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 became aware of this I stated nah it can’t hold true however when I dug around I even called to my politician buddies Governor Senators they didn’t know about it I imply that’s how you understand that’s how false information is that there’s no information out there then a lot of individuals informed me well you can’t get it due to the fact that you took the PPP likewise not true so let’s ask Josh why does no one learn about the employee retention credit you understand what’s fascinating you’re talking about the banks Kevin since 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 nation and they would process procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s just process process that’s all um and here there was mayhem due to the fact that remember in the original cares act you could not do both programs so if you had done PPP you might refrain from doing ERC in the initial program and when they changed 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 anyone about how to.
do this does your CFO know how to do this not actually he or she’s never ever 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 accounting professional no your accounting professional’s never ever done this prior to unless you have an account that entered into this service and bottom line my firm Kevin has actually been in business because 2009 and we have actually been dealing with the federal government and the state government to recover money for Fortune 500 Fortune 1000 companies so a great deal of our huge big business clients have actually dealt with bottom line to recuperate other federal government programs we’ve done sales tax and use tax joblessness tax work chance tax credits research and development tax credits unclaimed property real estate tax all of these other federal government programs.
The staff member retention tax credit is a broad based refundable tax credit created to motivate.
employers to keep workers on their payroll. The credit is 50% of up to $10,000 in incomes paid by an.
company whose company is totally or partly suspended because of COVID-19 or whose gross invoices.
decrease by more than 50%.
1. The credit is offered to all companies despite size including tax exempt companies. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
businesses who take Small Business Loans.
2. To certify, the company needs to meet one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s organization is fully or partially suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross receipts are listed below 50% of the equivalent quarter in 2019. When the.
employer’s gross invoices go above 80% of a comparable quarter in 2019 they no longer qualify.
after the end of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the certifying wages paid up to $10,000 in overall.
It works for wages paid after March 13th and prior to December 31, 2020.
The definition of certifying wages varies by whether an employer had, on average, basically than.
100 employees in 2019.
Business that focus on ERC filing assistance typically offer competence and assistance to help businesses browse the intricate procedure of declaring the credit. They can offer various services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Cares Act
Eligibility Assessment: These companies will examine your service’s eligibility for the ERC based upon aspects such as your industry, profits, and operations. If you fulfill the requirements for the credit and recognize the maximum credit quantity you can declare, they can help identify.
Documents and Calculation: ERC filing services will help in gathering the essential paperwork, such as payroll records and monetary statements, to support your claim. They will also help determine the credit amount based on eligible wages and other qualifying expenditures.
Retroactive Claim Review: If you are qualified to claim the ERC for previous quarters, these business can review your previous payroll records and financials to determine prospective chances for retroactive credits. They can help you amend previous tax returns to declare these refunds.
Filing Help: Business concentrating on ERC filings will prepare and send the required kinds and paperwork in your place. This consists of completing Type 941 or any other required tax return.
Compliance and Updates: ERC guidelines and guidance have developed in time. These business remain upgraded with the current changes and guarantee that your filings adhere to the most present guidelines. If the Internal revenue service requests extra details or carries out an audit related to your ERC claim, they can also offer continuous support.
It is very important to research and veterinarian any business using ERC filing support to guarantee their trustworthiness and know-how. Try to find established companies with experience in tax and payroll services, or think about reaching out to relied on accounting firms or tax professionals who offer ERC submitting support.
Remember that while these companies can offer important help, it’s always a great concept to have a standard understanding of the ERC requirements and procedure yourself. This will assist you make notified choices and ensure precise filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief measures. The objective of the ERC is to motivate organizations to maintain and pay their staff members throughout the pandemic, even if their operations have been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is available to qualified companies, consisting of for-profit services, tax-exempt organizations, and certain governmental entities. To certify, employers should fulfill one of two criteria:.
Business operations were fully or partly suspended due to a federal government order related to COVID-19.
The business experienced a considerable decline in gross receipts. As mentioned earlier, for 2021, a significant decline is specified as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross receipts compared to the immediately preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit quantity is equal to a percentage (as much as 70%) of certified incomes paid to workers, including specific health plan costs. 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, organizations that received an Income Protection Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 enables companies to claim the ERC even if they got a PPP loan. Nevertheless, the very same wages can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and boosted, enabling qualified companies to declare the credit for certified wages paid as far back as March 13, 2020. This retroactive provision supplies an opportunity for services to modify prior-year income tax return and receive refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their employment income tax return, typically Type 941. If the credit goes beyond the quantity of employment taxes owed, the excess can be refunded to the company.
It is very important to keep in mind that the ERC provisions and eligibility requirements have progressed with time. The best strategy is to speak with a tax expert or visit the main IRS site for the most in-depth and updated details relating to the ERC, including any current legal modifications or updates.
To get approved for the ERC, an organization needs to fulfill one of the following criteria:.
Business operations were completely or partially suspended due to a government order related to COVID-19.
Business experienced a substantial decline in gross receipts. For 2021, a significant decrease is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decline in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
The ERC is offered to services of all sizes, including tax-exempt organizations, but 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 finishing the required types and including the credit on your employment income tax return (generally Type 941). The exact time it takes to process the credit can differ based on numerous elements, consisting of the complexity of your service and the workload of the internal revenue service. It’s suggested to talk to a tax expert for guidance particular to your scenario.
There are a number of companies that can aid with the procedure of claiming the ERC. These consist of accounting companies, tax advisory services, and payroll service providers. Some popular business that provide assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research and get in touch with these companies directly to ask about their services and fees.
Please note that the information provided here is based on general knowledge and may not reflect the most recent updates or modifications to the ERC. It’s important to speak with a tax expert or visit the official internal revenue service website for the most accurate and current info relating to eligibility, declaring treatments, and offered assistance.
Less than 100. The credit is based if the company had 100 or fewer employees on average in 2019.
on wages paid to all employees whether they in fact worked or not. Simply put, even if the.
staff members worked full-time and got paid for full-time work, the employer still gets the credit.
Greater than 100. The credit is if the employer had more than 100 workers on average in 2019.
allowed just for wages paid to staff members who did not work during the calendar quarter.
In both cases, “salaries” consists of not just cash payments however likewise a part of the expense of employer.
supplied health care. Employee Retention Credit Cares Act
Companies can be right away repaid for the credit by reducing the amount of payroll taxes they.