Lets talk first about Employee Retention Credit Gaap Accounting :
Our team here what do these men doing everyone in this room is helping teach individuals about ERC and uh constantly provide a stunning breakfast and have individuals actually discover the program we ought to head to the room where we are able to display 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 hundreds of millions of dollars so these are duplicate copies of the letters that go to customers confirming that the check is on the method I mean you understand if you just start to take a 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 mean it’s just I mean think about how many actual clients that went through the program yeah this is the very end this is the celebration at the end when the check is confirmed the numbers are confirmed and the check is on the mail in the mail from the IRS heading to the consumer so that’s how you have the ability to track it you understand when you
get this you understand the check is chosen sure and that’s when they pay so they do not pay anything until they actually get the money they do not pay bottom line Wonder trust anything until this letter is confirmed the check is on the method they deposit it into their savings account and they can genuinely trust Wonder trust that the process has been ended up and how many you believe you’ve processed considering that you started this we have to do with 35 000 of these for
about six billion dollars wow so plainly they know what they’re doing and that’s what you require you need 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 Terrific here you’re at my YouTube channel we’re speaking about something really essential today the staff member retention credit which most of you have actually never become aware of I definitely hadn’t become aware of it till really just recently and discovered a lot about it since this is most likely the lowest cost of capital for any small company anywhere
anytime if you have employees between five and five hundred so I’ve got the expert with me this is Josh Fox he’s the creator and CEO of bottom line Concepts they’re the biggest processor of these ERC credits this is a 170 page program so it’s challenging this isn’t like PPP we just contact 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 spokesperson for this I love this program it’s disappearing soon you got to find out all about it let’s talk worker retention credit Josh Fox what is an ERC let’s just start there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act used organizations three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody it makes a big difference right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
remedy the money money payroll tax refund all right go on sorry I just have to make certain we got that point I indicate that’s a huge difference a loan versus money cash I like money cash 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 lovely difficult check in the mail where you get actual money from the internal revenue service all right so let’s speak about how it works due to the fact that it seems like to me if it’s a if it’s employee retention credit that person needed to be a staff member 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 employees right you had to have actually owned a business however it’s based on you having W-2 staff members 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 qualified so you have to be on payroll in 2020 on the W-2 and you have to be on payroll for the first 6 months of 2021 on the W-2 proper so there were 6 quarters the program was open well stroll us through the 6 quarters so you had quarters two three and 4 of 2020 and you had quarters one two and three of 2021. fine 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 just how much can you get back per staff member that was on a W-2 in those six quarters so the calculation in 2020 to be exact Kevin is 50 of the worker’s wage to an optimum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the staff member’s wage to a maximum of seven thousand per quarter how did that occur um they just changed the rules in.
2021 versus due to the fact that the turmoil 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 as much as five thousand Max and then 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 employee that is since that’s a lot of cash it is now there’s a caution here the PPP money would need to be minimized from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would minimize the 26 000 so what we’re seeing typically Kevin is if you took PPP money someplace around 10 thousand dollars an individual so let’s state hypothetically you owned a dining establishment in New York City where I’m from and you had a hundred employees and you took PPP money you would still get a million dollar in the mail from the internal revenue service so it’s big obviously now the huge concern is why does no one understand about this since appearance when I initially became aware of this when I initially fulfilled Josh you know I’ve got great deals of financial investments in great deals of companies I’m a major supporter for entrepreneurship in America and make many numerous investments in entrepreneurs of which numerous suffered through the pandemic when I first found out about this I called BS I do not think it due to the fact that I utilize 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 and that were well should have and we used them wisely to survive throughout the pandemic so when I found out about this I said nah it can’t be true but when I dug around I even contacted us to my political leader good friends Governor Senators they didn’t understand about it I mean that’s how you understand that’s how misinformation is that there’s no details out there then a bunch of individuals 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 know about the staff member retention credit you understand what’s fascinating you’re talking about the banks Kevin due to the fact that 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 huge 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 just procedure procedure that’s all um and here there was mayhem due to the fact that keep in mind in the initial 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 since 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 know how to do this not actually he or she’s never done it before do the banks do it nope the banks don’t do it the payroll business yeah some 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 company and bottom line my company Kevin has been in business given that 2009 and we have actually been working with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 companies so a lot of our big huge corporate clients have actually worked with bottom line to recover other government programs we’ve done sales tax and utilize tax joblessness tax work chance tax credits research and development tax credits unclaimed home real estate 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 as much as $10,000 in salaries paid by an.
company whose organization is completely or partly suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
1. The credit is available to all employers despite size consisting of tax exempt companies. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
businesses who take Small Business Loans.
2. To qualify, the company has to fulfill one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s organization is completely or partially suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross invoices are listed below 50% of the similar quarter in 2019. Once the.
company’s gross invoices exceed 80% of an equivalent quarter in 2019 they no longer certify.
after the end of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the qualifying 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 qualifying salaries differs by whether an employer had, on average, more or less than.
100 workers in 2019.
Business that specialize in ERC filing assistance generally offer knowledge and support to assist companies browse the complicated process of claiming the credit. They can offer numerous services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Gaap Accounting
Eligibility Evaluation: These companies will evaluate your business’s eligibility for the ERC based on aspects such as your market, earnings, and operations. They can assist figure out if you satisfy the requirements for the credit and determine the maximum credit amount you can declare.
Paperwork and Estimation: ERC filing services will help in collecting the necessary paperwork, such as payroll records and financial declarations, to support your claim. They will also assist compute the credit quantity based upon eligible earnings and other qualifying costs.
Retroactive Claim Review: If you are qualified to declare the ERC for prior quarters, these companies can review your previous payroll records and financials to determine prospective opportunities for retroactive credits. They can help you change prior income tax return to claim these refunds.
Filing Help: Business specializing in ERC filings will prepare and submit the essential kinds and paperwork on your behalf. This consists of finishing Kind 941 or any other required tax return.
Compliance and Updates: ERC guidelines and guidance have progressed over time. These companies remain upgraded with the current modifications and ensure that your filings comply with the most existing standards. They can also supply ongoing assistance if the IRS demands extra information or performs an audit related to your ERC claim.
It is very important to research and veterinarian any company offering ERC filing help to guarantee their reliability and competence. Search for recognized firms with experience in tax and payroll services, or consider reaching out to trusted accounting firms or tax experts who use ERC filing support.
Remember that while these companies can supply valuable help, it’s always a great idea to have a standard understanding of the ERC requirements and process yourself. This will assist you make informed decisions and ensure precise filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief measures. The objective of the ERC is to encourage organizations to maintain and pay their workers throughout the pandemic, even if their operations have been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to eligible companies, including for-profit services, tax-exempt companies, and particular governmental entities. To certify, companies must fulfill one of two requirements:.
The business operations were fully or partially suspended due to a government order related to COVID-19.
Business experienced a substantial decrease in gross invoices. As discussed earlier, for 2021, a significant decline is defined as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decline in gross receipts compared to the very 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 amount amounts to a portion (as much as 70%) of certified incomes paid to staff members, including particular 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, organizations that got an Income Defense Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 allows businesses to declare the ERC even if they received a PPP loan. The same earnings can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and improved, allowing eligible employers to claim the credit for certified earnings paid as far back as March 13, 2020. This retroactive arrangement provides an opportunity for businesses to modify prior-year income tax return and receive refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their employment income tax return, normally Form 941. The excess can be refunded to the company if the credit surpasses the amount of work taxes owed.
It’s important to keep in mind that the ERC arrangements and eligibility requirements have developed with time. The very best strategy is to talk to a tax professional or visit the main internal revenue service website for the most current and in-depth info concerning the ERC, including any current legal changes or updates.
To qualify for the ERC, an organization must fulfill one of the following requirements:.
The business operations were fully or partly suspended due to a federal government order related to COVID-19.
Business experienced a significant decline in gross receipts. For 2021, a considerable decrease is specified as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a considerable decrease 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 instantly preceding quarter.
The ERC is offered to companies of all sizes, including tax-exempt organizations, however there are some exceptions. Government entities and businesses that received a PPP loan might have restrictions on declaring the credit.
The process for claiming the ERC includes completing the necessary kinds and including the credit on your employment tax return (typically Kind 941). The exact time it requires to process the credit can differ based on a number of factors, including the intricacy of your organization and the work of the IRS. It’s recommended to consult with a tax expert for assistance particular to your circumstance.
There are several business that can assist with the procedure of claiming the ERC. These include accounting firms, tax advisory services, and payroll provider. Some widely known companies that offer support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research study and get in touch with these business straight to inquire about their charges and services.
Please keep in mind that the info provided here is based on general knowledge and might not show the most recent updates or changes to the ERC. It is essential to talk to a tax professional or check out the main internal revenue service site for the most accurate and current info concerning eligibility, declaring treatments, and readily available help.
Less than 100. The credit is based if the company had 100 or less employees on average in 2019.
on wages paid to all workers whether they actually worked or not. To put it simply, even if the.
staff members worked full-time and made money 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.
permitted just for earnings paid to staff members who did not work throughout the calendar quarter.
In both cases, “earnings” consists of not just cash payments but also a part of the expense of employer.
provided healthcare. Employee Retention Credit Gaap Accounting
Companies can be immediately reimbursed for the credit by decreasing the amount of payroll taxes they.