Lets talk first about Employee Retention Credit Deduction Disallowance :
Our team here what do these guys doing everyone in this room is assisting teach people about ERC and uh constantly provide a beautiful breakfast and have individuals really discover the program we ought to head to the space where we have the ability to display a few of the checks that we are getting for companies and I wish to see that what is this this is uh numerous millions of dollars literally Kevin hundreds of 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 know if you just 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 imply it’s simply I mean think of the number of actual clients 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 have the ability to track it you know when you
receive this you understand the check is opted for sure and that’s when they pay so they don’t pay anything till they actually receive the cash they don’t pay bottom line Wonder trust anything till this letter is verified the check is on the method they deposit it into their checking account and they can really trust Wonder trust that the procedure has actually been ended up and how many you think you’ve processed given that you began 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 need specialists 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 Wonderful here you’re at my YouTube channel we’re talking about something actually crucial today the staff member retention credit which most of you have actually never become aware of I definitely had not become aware of it till really just recently and learned a lot about it since this is most likely the most affordable cost of capital for any small business anywhere
anytime if you have staff members between 5 and five hundred so I’ve got the expert with me this is Josh Fox he’s the creator and CEO of bottom line Ideas they’re the largest processor of these ERC credits this is a 170 page program so it’s not easy this isn’t like PPP we simply phone your bank supervisor and state give 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 ended up being yes the Ambassador and paid representative for this I like this program it’s going away soon you got to find out all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just start there so throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act provided organizations 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone 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.
fix the cash money payroll tax refund okay go on sorry I simply need to make sure we got that point I imply that’s a big 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 stunning tough check in the mail where you get actual money from the IRS all right so let’s discuss how it works because it seems like to me if it’s a if it’s worker 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 shareholders it’s for staff members right you needed to have actually owned a service but it’s based upon you having W-2 employees in America not 10.99. 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 6 months of 2021 on the W-2 right so there were 6 quarters the program was open well stroll us through the six quarters so you had quarters 2 three and four of 2020 and you had quarters one 2 and 3 of 2021. okay 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 cash just how much can you return per worker 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 wage to a maximum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers escalated to 70 of the employee’s wage to a maximum of seven thousand per quarter how did that occur um they simply changed the rules in.
2021 versus since the chaos of the pandemic so they wanted 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 approximately five thousand Max and then what takes place 21 000 Max in 2021 oh that’s how you come up with twenty 6 thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty 6 thousand dollars per staff member that is since that’s a lot of cash it is now there’s a caveat here the PPP money would need to be lowered from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would decrease the 26 000 so what we’re seeing usually Kevin is if you took PPP money somewhere around ten thousand dollars an individual so let’s state hypothetically you owned a restaurant in New York City where I’m from and you had a hundred employees and you took PPP cash you would still get a million dollar in the mail from the IRS so it’s substantial undoubtedly now the big question is why does no one learn about this because look when I first found out about this when I first fulfilled Josh you understand I have actually got lots of financial investments in lots of business I’m a significant advocate for entrepreneurship in America and make many numerous financial investments in business owners of which numerous suffered through the pandemic when I initially became aware of this I called BS I don’t believe it since I utilize 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 which were well deserved and we utilized them sensibly to stay alive during the pandemic so when I became aware of this I stated nah it can’t be true but when I dug around I even called to my political leader buddies Governor Senators they didn’t know about it I suggest that’s how you know that’s how misinformation is that there’s no details out there then a bunch of individuals informed me well you can’t get it due to the fact that you took the PPP likewise not real so let’s ask Josh why does nobody know about the employee retention credit you know what’s intriguing you’re discussing the banks Kevin since in the PPP loan process the federal government made it very clear that if you wanted a PPP loan you would call Wells Fargo Citibank Bank of America any of the huge 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 procedure procedure that’s all um and here there was mayhem due to the fact that keep in mind in the original cares act you could not do 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 due to the fact that it’s not alone so you’re getting a tax refund so the federal government never ever made it clear to any person about how to.
do this does your CFO understand how to do this not truly he or she’s never ever done it in the past 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 company your accountant no your accounting professional’s never done this before 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’ve 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 huge huge corporate clients have actually dealt with bottom line to recover other federal government programs we have actually done sales tax and utilize tax joblessness tax work chance tax credits research and development tax credits unclaimed property real estate tax all of these other government programs.
The staff member retention tax credit is a broad based refundable tax credit developed to encourage.
companies to keep staff members on their payroll. The credit is 50% of as much as $10,000 in incomes paid by an.
Because of COVID-19 or whose gross receipts, company whose company is completely or partly suspended.
decrease by more than 50%.
1. The credit is readily available to all companies regardless of size consisting of tax exempt organizations. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
companies who take Small Business Loans.
2. To qualify, the employer needs to satisfy one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s company is totally or partially suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross invoices are listed below 50% of the similar quarter in 2019. As soon as the.
employer’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 quantity of the credit is 50% of the certifying salaries paid up to $10,000 in total.
It works for salaries paid after March 13th and prior to December 31, 2020.
The meaning of certifying incomes differs by whether an employer had, on average, more or less than.
100 staff members in 2019.
Business that specialize in ERC filing assistance generally supply competence and assistance to help services navigate the complicated procedure of declaring the credit. They can offer different services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Deduction Disallowance
Eligibility Assessment: These business will examine your service’s eligibility for the ERC based upon factors such as your industry, income, and operations. If you satisfy the requirements for the credit and recognize the optimum credit amount you can claim, they can help determine.
Paperwork and Calculation: ERC filing services will assist in collecting the necessary documents, such as payroll records and financial declarations, to support your claim. They will also help determine the credit amount based on qualified earnings and other certifying expenses.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for prior quarters, these companies can examine your previous payroll records and financials to determine possible opportunities for retroactive credits. They can assist you amend prior tax returns to declare these refunds.
Filing Assistance: Companies concentrating on ERC filings will prepare and send the required kinds and documents on your behalf. This consists of completing Type 941 or any other required tax forms.
Compliance and Updates: ERC guidelines and guidance have progressed with time. These business remain upgraded with the current modifications and ensure that your filings comply with the most existing standards. They can also supply continuous assistance if the IRS demands extra details or conducts an audit related to your ERC claim.
It is necessary to research study and vet any company providing ERC filing help to guarantee their reliability and knowledge. Try to find established firms with experience in tax and payroll services, or think about connecting to relied on accounting companies or tax professionals who offer ERC filing assistance.
Keep in mind that while these companies can supply valuable help, it’s always a good concept to have a basic understanding of the ERC requirements and process yourself. This will assist you make notified choices and make sure accurate filings.
The Worker Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief steps. The goal of the ERC is to motivate businesses to maintain and pay their employees 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 eligible companies, consisting of for-profit companies, tax-exempt companies, and certain governmental entities. To qualify, companies must satisfy one of two criteria:.
The business operations were fully or partially suspended due to a government order related to COVID-19.
The business experienced a considerable decrease in gross invoices. As pointed out previously, for 2021, a substantial decrease is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019, or a 20% decline in gross receipts compared to the right away preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit quantity amounts to a portion (approximately 70%) of certified incomes paid to staff members, consisting of specific health insurance expenses. The maximum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, services that received an Income Security Program (PPP) loan were not eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 allows businesses to declare the ERC even if they received a PPP loan. The very same incomes can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and improved, allowing qualified employers to declare the credit for certified salaries paid as far back as March 13, 2020. This retroactive provision offers an opportunity for companies to amend prior-year income tax return and get refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their employment tax returns, normally Form 941. The excess can be reimbursed to the company if the credit surpasses the quantity of work taxes owed.
It is essential to note that the ERC arrangements and eligibility requirements have developed gradually. The very best course of action is to consult with a tax expert or check out the official IRS website for the most detailed and up-to-date details concerning the ERC, including any recent legislative modifications or updates.
To qualify for the ERC, a business should satisfy one of the following requirements:.
Business operations were fully or partially suspended due to a federal government order related to COVID-19.
Business experienced a significant decline in gross receipts. For 2021, a substantial decrease is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decline in gross receipts compared to the exact same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
The ERC is available to organizations of all sizes, including tax-exempt organizations, however there are some exceptions. Government entities and businesses that got a PPP loan might have constraints on claiming the credit.
The procedure for declaring the ERC involves completing the essential kinds and consisting of the credit on your work income tax return (typically Type 941). The exact time it takes to process the credit can differ based on a number of elements, including the complexity of your business and the workload of the IRS. It’s advised to speak with a tax expert for assistance particular to your scenario.
There are several companies that can help with the procedure of claiming the ERC. These consist of accounting companies, tax advisory services, and payroll company. Some widely known companies that use support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research study and get in touch with these business directly to ask about their services and fees.
Please keep in mind that the info provided here is based upon basic understanding and may not reflect the most recent updates or modifications to the ERC. It is essential to seek advice from a tax expert or go to the official IRS site for the most accurate and current information concerning eligibility, claiming treatments, and readily available assistance.
Less than 100. If the employer had 100 or less staff members on average in 2019, then the credit is based.
on salaries paid to all staff members whether they in fact worked or not. In other words, even if the.
employees worked full-time and got paid for full-time work, the employer still gets the credit.
Greater than 100. If the employer had more than 100 staff members typically in 2019, then the credit is.
permitted only for earnings paid to staff members who did not work during the calendar quarter.
In both cases, “salaries” includes not simply money payments however likewise a portion of the cost of company.
provided health care. Employee Retention Credit Deduction Disallowance
Companies can be instantly repaid for the credit by lowering the quantity of payroll taxes they.