Lets talk first about Employee Retention Credit Financial Reporting :
Our group here what do these men doing everyone in this space is assisting teach people about ERC and uh constantly offer a beautiful breakfast and have people truly discover the program we must head to the room where we are able to show some of the checks that we are getting for business and I want to see that what is this this is uh hundreds of millions of dollars actually Kevin numerous countless dollars so these are duplicate copies of the letters that go to customers validating that the check is on the method I indicate you know if you just start to take a 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 indicate it’s just I imply think of 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 internal revenue service heading to the customer so that’s how you have the ability to track it you know when you
receive this you know the check is opted for sure and that’s when they pay so they don’t pay anything until they really receive 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 savings account and they can genuinely trust Wonder trust that the procedure has been ended up and the number of you think you have actually processed since you began this we have to do with 35 000 of these for
about six billion dollars wow so clearly they know 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 Wonderful here you’re at my YouTube channel we’re speaking about something actually important today the worker retention credit which the majority of you have never ever heard of I certainly had not become aware of it up until really recently and found out a lot about it because this is most likely the lowest expense of capital for any small business anywhere
anytime if you have staff members between 5 and five hundred so I have actually 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 hard this isn’t like PPP we just phone your bank supervisor and state offer 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 have actually ended up being yes the Ambassador and paid representative for this I enjoy this program it’s going away very soon you got to learn all about it let’s talk employee retention credit Josh Fox what is an ERC let’s just begin there so throughout the Trump Administration when President Trump was enacted they developed the cares Act and the cares act used businesses 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone it makes a big distinction right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
fix the money cash payroll tax refund alright go on sorry I simply have to ensure we got that point I imply that’s a big distinction a loan versus cash money I like money money that’s what we’re speaking about 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 initial cares Act is the ERC and yes Kevin it is a gorgeous hard check in the mail where you get actual cash from the IRS all right so let’s talk about how it works since it seems like to me if it’s a if it’s staff member retention credit that person had to be an employee so I’m going to make the Assumption this cash is not for the owner not for individuals on the cap table not for shareholders it’s for workers right you needed to have 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 workers 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 first six months of 2021 on the W-2 right so there were six quarters the program was open well stroll us through the six quarters so you had quarters 2 3 and four of 2020 and you had quarters one 2 and 3 of 2021. alright so that’s how it’s determined you need to be on the W-2 throughout that period now let’s talk my favorite part money how much can you return per worker that was on a W-2 in those six quarters so the calculation in 2020 to be specific Kevin is 50 of the staff member’s income to a maximum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the worker’s salary to a maximum of seven 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 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 5 thousand Max and after that 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 six thousand dollars per worker that is because that’s a great deal 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 minimize the 26 000 so what we’re seeing usually Kevin is if you took PPP cash someplace around 10 thousand dollars a person so let’s say hypothetically you owned a restaurant in New York 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 IRS so it’s huge obviously now the big concern is why does no one learn about this because appearance when I first became aware of this when I first fulfilled Josh you know I’ve got great deals of investments in great deals of companies I’m a major advocate for entrepreneurship in America and make lots of lots of financial investments in entrepreneurs of which lots of suffered through the pandemic when I first heard about this I called BS I don’t think it because I use the PPP we went through the cash 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 been worthy of and we utilized them carefully to stay alive throughout the pandemic so when I found out about this I stated nah it can’t be true however when I dug around I even contacted us to my politician friends Guv Senators they didn’t learn about it I suggest that’s how you know that’s how misinformation is that there’s no details out there then a lot of people told me well you can’t get it because you took the PPP also not real so let’s ask Josh why does no one learn about the staff member retention credit you know what’s interesting you’re talking about the banks Kevin since in the PPP loan procedure the federal government made it really 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 process in Canada a pre-pp loan there’s no loans in Canada by the way it’s just process procedure that’s all um and here there was turmoil since keep in mind in the initial 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 altered 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 government never 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 before 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 business your accounting professional no your accountant’s never ever done this prior to unless you have an account that entered into this organization and bottom line my firm Kevin has stayed in business since 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 worked with bottom line to recover other federal government programs we have actually done sales tax and use tax unemployment tax work opportunity tax credits research and development tax credits unclaimed home property tax all of these other government programs.
The worker retention tax credit is a broad based refundable tax credit created to encourage.
employers to keep staff members on their payroll. The credit is 50% of up to $10,000 in incomes paid by an.
Due to the fact that of COVID-19 or whose gross receipts, employer whose business is completely or partially suspended.
decrease by more than 50%.
1. The credit is available to all employers despite size including tax exempt organizations. There are.
just 2 exceptions: (1) state and city governments and their instrumentalities and (2) little.
companies who take Small Business Loans.
2. To certify, the employer has to meet one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s organization is completely or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are below 50% of the similar quarter in 2019. Once the.
employer’s gross receipts go above 80% of a comparable 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 qualifying incomes paid up to $10,000 in overall.
It is effective for incomes paid after March 13th and before December 31, 2020.
The definition of certifying earnings differs by whether a company had, on average, more or less than.
100 employees in 2019.
Business that concentrate on ERC filing help normally provide competence and support to help organizations browse the intricate procedure of declaring the credit. They can offer various services, including:.
How is the employee retention credit calculated? Employee Retention Credit Financial Reporting
Eligibility Assessment: These business will examine your company’s eligibility for the ERC based upon aspects such as your industry, earnings, and operations. If you satisfy the requirements for the credit and identify the maximum credit quantity you can declare, they can assist identify.
Paperwork and Calculation: ERC filing services will assist in gathering the necessary documentation, such as payroll records and monetary declarations, to support your claim. They will also assist calculate the credit amount based on qualified salaries and other certifying costs.
Retroactive Claim Evaluation: If you are eligible to claim the ERC for prior quarters, these companies can examine your past payroll records and financials to determine potential chances for retroactive credits. They can assist you amend prior income tax return to declare these refunds.
Filing Support: Companies concentrating on ERC filings will prepare and submit the necessary kinds and paperwork in your place. This consists of finishing Kind 941 or any other necessary tax return.
Compliance and Updates: ERC policies and assistance have actually developed over time. These business stay upgraded with the current changes and guarantee that your filings adhere to the most current guidelines. They can also supply ongoing support if the IRS requests extra info or performs an audit related to your ERC claim.
It is very important to research study and vet any business using ERC filing support to guarantee their trustworthiness and knowledge. Look for recognized firms with experience in tax and payroll services, or consider connecting to trusted accounting companies or tax professionals who offer ERC submitting assistance.
Keep in mind that while these companies can provide valuable assistance, it’s constantly a great idea to have a fundamental understanding of the ERC requirements and procedure yourself. This will help you make informed choices and ensure accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief procedures. The goal of the ERC is to encourage businesses to retain and pay their employees throughout the pandemic, even if their operations have actually been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to qualified employers, including for-profit organizations, tax-exempt organizations, and specific governmental entities. To qualify, employers must meet one of two requirements:.
Business operations were completely or partially suspended due to a federal government order related to COVID-19.
The business experienced a substantial decline in gross receipts. As mentioned previously, for 2021, a substantial decline is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decrease 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 instantly preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit quantity is equal to a portion (up to 70%) of qualified earnings paid to employees, consisting of certain health plan expenses. The optimum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, businesses that received an Income Security Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 permits organizations to declare the ERC even if they got a PPP loan. The very same earnings can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively broadened and enhanced, enabling qualified employers to declare the credit for certified salaries paid as far back as March 13, 2020. This retroactive arrangement provides an opportunity for companies to amend prior-year income tax return and receive refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their work tax returns, normally Kind 941. The excess can be reimbursed to the company if the credit goes beyond the quantity of employment taxes owed.
It is essential to keep in mind that the ERC provisions and eligibility requirements have actually developed with time. The very best strategy is to consult with a tax professional or go to the official IRS website for the most detailed and current information regarding the ERC, including any current legal modifications or updates.
To qualify for the ERC, a service must meet among the following criteria:.
The business operations were completely or partially suspended due to a federal government order related to COVID-19.
Business experienced a considerable decline in gross receipts. For 2021, a considerable decrease is specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decrease in gross receipts compared to the immediately preceding quarter.
The ERC is offered to organizations of all sizes, consisting of tax-exempt organizations, but there are some exceptions. For instance, government entities and services that got a PPP loan may have limitations on declaring the credit.
The process for declaring the ERC involves completing the required forms and including the credit on your employment income tax return (typically Type 941). The exact time it requires to process the credit can differ based on a number of aspects, including the complexity of your organization and the workload of the IRS. It’s recommended to speak with a tax professional for guidance specific to your scenario.
There are numerous business that can assist with the process of declaring the ERC. These consist of accounting companies, tax advisory services, and payroll company. Some popular companies that provide assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research study and get in touch with these business directly to inquire about their costs and services.
Please keep in mind that the info offered here is based on general knowledge and may not reflect the most recent updates or changes to the ERC. It is necessary to talk to a tax expert or check out the official internal revenue service site for the most accurate and up-to-date information relating to eligibility, claiming procedures, and available support.
Less than 100. The credit is based if the employer had 100 or less staff members on average in 2019.
on incomes paid to all staff members whether they actually 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. If the company had more than 100 employees typically 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, “incomes” consists of not simply money payments however also a portion of the cost of employer.
offered healthcare. Employee Retention Credit Financial Reporting
Companies can be right away repaid for the credit by lowering the quantity of payroll taxes they.