Lets talk first about Employee Retention Credit Extension 2022 :
Our group here what do these guys doing everyone in this space is helping teach individuals about ERC and uh constantly provide a gorgeous breakfast and have individuals really find out about the program we must head to the room where we are able to show some of the checks that we are getting for companies and I ‘d like to see that what is this this is uh hundreds of millions of dollars actually Kevin hundreds of countless dollars so these are duplicate copies of the letters that go to customers validating that the check is on the method I imply you understand if you just begin to look at some of these here I mean this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I imply it’s simply I imply consider the number of real clients that went through the program yeah this is the very end this is the celebration at the end when the check is validated the numbers are confirmed and the check is on the mail in the mail from the internal revenue service heading to the customer so that’s how you have the ability to track it you know when you
get this you know the check is opted for sure and that’s when they pay so they do not pay anything up until they in fact get the money they don’t pay bottom line Wonder trust anything up until this letter is validated the check is on the way they deposit it into their savings account and they can truly rely on Wonder trust that the procedure has actually been ended up and how many you think you have actually processed considering that 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 specialists 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 Wonderful here you’re at my YouTube channel we’re talking about something truly essential today the worker retention credit which the majority of you have never heard of I definitely had not become aware of it till extremely recently and discovered a lot about it because this is probably the most affordable cost of capital for any small business anywhere
anytime if you have workers between 5 and five hundred so I’ve got the expert with me this is Josh Fox he’s the founder and CEO of bottom line Principles they’re the largest processor of these ERC credits this is a 170 page program so it’s hard this isn’t like PPP we just call your bank manager and state offer me a loan it does not work there’s not a loan it’s an application and Josh is going to tell all of us about it and how to get it and why I have actually become yes the Ambassador and paid representative for this I love this program it’s going away 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 came up with the cares Act and the cares act provided companies three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everyone it makes a big difference right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the cash money payroll tax refund okay go on sorry I just need to make certain we got that point I suggest that’s a big distinction a loan versus money cash I like cash cash that’s what we’re discussing alright 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 hard check in the mail where you get actual cash from the internal revenue service all right so let’s talk about how it works because it sounds like to me if it’s a if it’s worker retention credit that person needed 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 had to have actually owned an organization however it’s based on you having W-2 workers 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 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 correct so there were six quarters the program was open well walk us through the six quarters so you had quarters two 3 and four of 2020 and you had quarters one 2 and three of 2021. fine so that’s how it’s determined you have to be on the W-2 throughout that duration now let’s talk my preferred part cash how much can you get back per worker that was on a W-2 in those six quarters so the computation in 2020 to be specific Kevin is 50 of the employee’s salary 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 happen um they simply changed the rules in.
2021 versus because the mayhem 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 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 five thousand in twenty twenty that’s twenty six thousand dollars per staff member that is since that’s a lot of cash it is now there’s a caution here the PPP cash would need to be reduced 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 on average Kevin is if you took PPP cash somewhere around 10 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 staff members and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s big clearly now the huge concern is why does no one understand about this due to the fact that look when I initially heard about this when I first met Josh you know I have actually got great deals of financial investments in lots of companies I’m a major advocate for entrepreneurship in America and make lots of many financial investments in business owners of which numerous suffered through the pandemic when I initially found out about this I called BS I do not think it due to the fact that I use 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 been worthy of and we utilized them wisely to stay alive throughout the pandemic so when I heard about this I stated nah it can’t hold true however when I dug around I even called to my political leader buddies Governor Senators they didn’t learn about it I suggest that’s how you know that’s how misinformation is that there’s no information out there then a lot of individuals told 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 no one know about the employee retention credit you know what’s fascinating you’re discussing the banks Kevin due to the fact that in the PPP loan process 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 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 just procedure process that’s all um and here there was turmoil because remember in the initial cares act you could refrain from doing both programs so if you had actually done PPP you might not do ERC in the initial program and when they altered the law in 2021 the banks were not doing ERC since it’s not alone so you’re getting a tax refund so the federal government never made it clear to anybody about how to.
do this does your CFO understand how to do this not actually she or he’s never done it previously do the banks do it nope the banks don’t do it the payroll companies 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 business and bottom line my firm Kevin has actually been in business since 2009 and we’ve been working with the federal government and the state government to recover money for Fortune 500 Fortune 1000 business so a great deal of our huge big corporate clients have actually dealt with bottom line to recuperate other government programs we’ve done sales tax and use tax joblessness tax work opportunity tax credits research and development tax credits unclaimed property real estate tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit created to encourage.
companies to keep workers on their payroll. The credit is 50% of approximately $10,000 in earnings paid by an.
company whose business is completely or partly suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
Availability.
1. The credit is available to all companies no matter size consisting of tax exempt companies. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
companies who take Small company Loans.
2. To certify, the employer has to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s organization is fully or partly suspended by government order due to COVID-19.
during the calendar quarter or.
o the company’s gross receipts are below 50% of the equivalent quarter in 2019. Once the.
employer’s gross receipts exceed 80% of a comparable quarter in 2019 they no longer qualify.
after completion of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the certifying salaries paid up to $10,000 in overall.
It is effective for wages paid after March 13th and before December 31, 2020.
The definition of qualifying salaries differs by whether an employer had, usually, basically than.
100 staff members in 2019.
Companies that focus on ERC filing assistance normally provide knowledge and assistance to help businesses browse the intricate procedure of claiming the credit. They can offer different services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Extension 2022
Eligibility Evaluation: These companies will evaluate your organization’s eligibility for the ERC based upon factors such as your industry, revenue, and operations. If you satisfy the requirements for the credit and recognize the maximum credit amount you can claim, they can help determine.
Documentation and Calculation: ERC filing services will help in gathering the necessary paperwork, such as payroll records and monetary declarations, to support your claim. They will likewise help determine the credit quantity based on qualified earnings and other qualifying expenses.
Retroactive Claim Review: If you are eligible to claim the ERC for previous quarters, these companies can examine your past payroll records and financials to identify possible chances for retroactive credits. They can help you change previous tax returns to claim these refunds.
Filing Support: Companies focusing on ERC filings will prepare and submit the required kinds and documentation on your behalf. This consists of finishing Kind 941 or any other necessary tax forms.
Compliance and Updates: ERC regulations and guidance have actually developed in time. These business stay upgraded with the latest modifications and guarantee that your filings comply with the most existing guidelines. If the Internal revenue service demands additional details or performs an audit associated to your ERC claim, they can likewise offer ongoing support.
It is essential to research study and vet any company offering ERC filing support to guarantee their credibility and proficiency. Try to find established companies with experience in tax and payroll services, or consider reaching out to trusted accounting companies or tax professionals who use ERC filing assistance.
Bear in mind that while these companies can supply valuable assistance, it’s always an excellent concept to have a standard understanding of the ERC requirements and procedure yourself. This will help you make notified decisions and guarantee precise filings.
The Worker Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief procedures. The objective of the ERC is to encourage services to retain and pay their employees throughout the pandemic, even if their operations have actually been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to qualified employers, consisting of for-profit organizations, tax-exempt companies, and specific governmental entities. To qualify, companies should satisfy one of two criteria:.
Business operations were completely or partially suspended due to a federal government order related to COVID-19.
The business experienced a significant decrease in gross receipts. As discussed earlier, for 2021, a significant decrease is specified as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decline in gross invoices compared to the instantly preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity is equal to a portion (as much as 70%) of qualified earnings paid to workers, including specific health insurance expenses. The maximum credit per staff member is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, services that got an Income Security Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 permits companies to claim the ERC even if they got a PPP loan. However, the same earnings can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and boosted, permitting qualified employers to declare the credit for certified wages paid as far back as March 13, 2020. This retroactive provision offers an opportunity for organizations to amend prior-year income tax return and get refunds.
Declaring the Credit: Employers can declare the ERC by reporting it on their work tax returns, normally Type 941. If the credit surpasses the amount of employment taxes owed, the excess can be reimbursed to the company.
It is essential to note that the ERC provisions and eligibility criteria have progressed in time. The best strategy is to consult with a tax professional or check out the main IRS website for the most in-depth and up-to-date details regarding the ERC, including any recent legal modifications or updates.
To qualify for the ERC, a service needs to meet among the following criteria:.
Business operations were fully or partially suspended due to a federal government order related to COVID-19.
Business experienced a substantial decrease in gross invoices. For 2021, a significant decrease is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a substantial decline is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decline in gross invoices compared to the right away preceding quarter.
The ERC is available to businesses of all sizes, consisting of tax-exempt organizations, but there are some exceptions. For instance, federal government entities and organizations that received a PPP loan may have constraints on claiming the credit.
The process for declaring the ERC involves completing the required types and including the credit on your employment income tax return (usually Form 941). The exact time it requires to process the credit can vary based upon several elements, consisting of the complexity of your service and the workload of the IRS. It’s recommended to seek advice from a tax professional for assistance particular to your scenario.
There are a number of companies that can assist with the procedure of claiming the ERC. Some popular companies that provide support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the information provided here is based upon basic understanding and may not reflect the most recent updates or changes to the ERC. It’s important to talk to a tax professional or go to the official internal revenue service site for the most precise and updated details concerning eligibility, declaring treatments, and available assistance.
Less than 100. If the employer had 100 or less staff members typically in 2019, then the credit is based.
on wages paid to all employees whether they actually worked or not. To put it simply, even if the.
employees worked full-time and made money for full-time work, the employer still gets the credit.
Greater than 100. If the employer had more than 100 workers usually in 2019, then the credit is.
enabled just for salaries paid to staff members who did not work throughout the calendar quarter.
In both cases, “wages” includes not simply cash payments but likewise a part of the expense of employer.
supplied healthcare. Employee Retention Credit Extension 2022
Payment.
Companies can be right away compensated for the credit by minimizing the amount of payroll taxes they.