Lets talk first about Employee Retention Credit State Treatment :
Our group here what do these guys doing everybody in this room is helping teach people about ERC and uh always offer a stunning breakfast and have individuals really discover the program we must head to the space 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 hundreds of countless dollars actually Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to customers confirming that the check is on the method I imply you understand if you just start to look at some of these here I suggest this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s just 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 confirmed the numbers are validated 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 know when you
get this you know the check is opted for sure and that’s when they pay so they don’t pay anything till they in fact get the money they do not pay bottom line Wonder trust anything up until this letter is confirmed the check is on the method they deposit it into their bank account and they can genuinely trust Wonder trust that the process has been finished and the number of you believe you’ve processed since you started this we have to do with 35 000 of these for
about six billion dollars wow so plainly they understand what they’re doing and that’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 really crucial today the employee retention credit which most of you have never ever become aware of I certainly hadn’t become aware of it until extremely just recently and found out a lot about it because this is probably the lowest expense of capital for any small business anywhere
anytime if you have staff members in between 5 and five hundred so I have actually got the professional 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 call up 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’ve become yes the Ambassador and paid representative for this I like this program it’s going away very soon you got to find out all about it let’s talk worker retention credit Josh Fox what is an ERC let’s simply begin there so throughout the Trump Administration when President Trump was enacted they came up with 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 two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
remedy the cash money payroll tax refund all right go on sorry I simply need to ensure we got that point I suggest that’s a huge distinction a loan versus money cash I like cash money that’s what we’re talking 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 original cares Act is the ERC and yes Kevin it is a lovely tough check in the mail where you get real money from the IRS all right so let’s discuss how it works due to the fact that it sounds like to me if it’s a if it’s staff member retention credit that individual had 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 employees right you had to have owned a business however it’s based upon you having W-2 staff members 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 first 6 months of 2021 on the W-2 appropriate so there were 6 quarters the program was open well stroll us through the six quarters so you had quarters two three and four of 2020 and you had quarters one two and three of 2021. all right so that’s how it’s measured you need to be on the W-2 during that period now let’s talk my favorite part cash just how much can you get back per employee that was on a W-2 in those six quarters so the estimation in 2020 to be exact 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 escalated to 70 of the staff member’s income to a maximum of seven thousand per quarter how did that occur um they simply changed the rules in.
2021 versus because 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 5 thousand Max and then what takes place 21 000 Max in 2021 oh that’s how you develop twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty 6 thousand dollars per employee that is since that’s a lot of money it is now there’s a caution here the PPP money would have to be minimized from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would minimize the 26 000 so what we’re seeing usually Kevin is if you took PPP cash someplace 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 employees and you took PPP money you would still get a million dollar in the mail from the IRS so it’s substantial obviously now the big question is why does nobody know about this because look when I first found out about this when I initially fulfilled Josh you know I’ve got great deals of investments in lots of companies I’m a significant advocate for entrepreneurship in America and make lots of lots of financial investments in business owners of which numerous suffered through the pandemic when I initially became aware of this I called BS I do not believe 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 carefully to stay alive during the pandemic so when I heard about this I stated nah it can’t hold true but when I dug around I even called to my politician friends Guv Senators they didn’t know about it I mean that’s how you understand that’s how false information is that there’s no information out there then a bunch of individuals told me well you can’t get it since you took the PPP likewise not real so let’s ask Josh why does nobody 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 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 process that’s all um and here there was turmoil since keep in mind in the original cares act you might not do 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 because 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 understand how to do this not actually he or she’s never done it before do the banks do it nope the banks do not do it the payroll companies yeah some of them are doing it as a payroll business your accounting professional no your accountant’s never done this prior to unless you have an account that went into this organization and bottom line my company Kevin has been in business since 2009 and we’ve been dealing with the federal government and the state government to recuperate money for Fortune 500 Fortune 1000 companies so a lot of our big big business clients have actually worked with bottom line to recuperate other government programs we have actually 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 staff member retention tax credit is a broad based refundable tax credit designed to motivate.
employers to keep staff members on their payroll. The credit is 50% of approximately $10,000 in salaries paid by an.
Since of COVID-19 or whose gross receipts, employer whose service is completely or partially suspended.
decrease by more than 50%.
Schedule.
1. The credit is available to all employers no matter size including tax exempt organizations. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) small.
services who take Small Business Loans.
2. To qualify, the company needs to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s organization is totally or partly suspended by government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the similar quarter in 2019. As soon as the.
employer’s gross receipts go above 80% of an equivalent 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 qualifying incomes paid up to $10,000 in total.
It works for salaries paid after March 13th and before December 31, 2020.
The meaning of qualifying incomes differs by whether a company had, typically, basically than.
100 workers in 2019.
Business that specialize in ERC filing support usually supply expertise and assistance to help organizations navigate the complicated procedure of declaring the credit. They can offer various services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit State Treatment
Eligibility Evaluation: These companies will evaluate your company’s eligibility for the ERC based upon aspects such as your market, earnings, and operations. If you fulfill the requirements for the credit and determine the maximum credit amount you can declare, they can assist determine.
Documentation and Estimation: ERC filing services will help in collecting the essential documents, such as payroll records and financial statements, to support your claim. They will likewise help compute the credit amount based upon eligible salaries and other qualifying expenditures.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for previous quarters, these business can examine your previous payroll records and financials to recognize possible opportunities for retroactive credits. They can assist you amend prior tax returns to declare these refunds.
Filing Assistance: Business focusing on ERC filings will prepare and send the required types and documents on your behalf. This consists of finishing Kind 941 or any other required tax return.
Compliance and Updates: ERC regulations and guidance have actually evolved gradually. These business remain updated with the latest modifications and ensure that your filings adhere to the most existing standards. If the IRS requests extra details or carries out an audit related to your ERC claim, they can likewise supply ongoing support.
It is very important to research study and vet any company using ERC filing assistance to guarantee their trustworthiness and knowledge. Try to find recognized firms with experience in tax and payroll services, or think about reaching out to trusted accounting firms or tax specialists who use ERC submitting assistance.
Bear in mind that while these business can offer valuable assistance, it’s constantly a good idea to have a standard understanding of the ERC requirements and procedure yourself. This will assist you make informed choices and make sure 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 steps. The goal of the ERC is to motivate companies to maintain and pay their staff members during the pandemic, even if their operations have been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to eligible companies, including for-profit companies, tax-exempt companies, and certain governmental entities. To qualify, companies should satisfy 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 significant decline in gross invoices. As pointed out earlier, for 2021, a substantial decline is specified as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a considerable decrease is specified 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 employer’s share of Social Security taxes. The credit quantity is equal to a portion (up to 70%) of certified incomes paid to workers, including particular health plan expenditures. 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 a Paycheck Protection Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 allows organizations to declare the ERC even if they got a PPP loan. However, the exact 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 improved, permitting qualified companies to claim the credit for qualified wages paid as far back as March 13, 2020. This retroactive arrangement offers a chance for companies to change prior-year tax returns and receive refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their employment tax returns, generally Type 941. The excess can be reimbursed to the company if the credit exceeds the amount of employment taxes owed.
It is necessary to keep in mind that the ERC provisions and eligibility requirements have actually progressed in time. The very best strategy is to seek advice from a tax professional or visit the main IRS website for the most current and in-depth info concerning the ERC, consisting of any current legislative modifications or updates.
To receive the ERC, a service needs to fulfill among the following requirements:.
Business operations were totally or partially suspended due to a government order related to COVID-19.
Business experienced a substantial decrease in gross receipts. For 2021, a substantial decline is specified as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decline in gross invoices compared to the right away preceding quarter.
The ERC is readily available to services of all sizes, consisting of tax-exempt companies, but there are some exceptions. For instance, federal government entities and organizations that received a PPP loan might have limitations on declaring the credit.
The procedure for claiming the ERC involves completing the required forms and consisting of the credit on your employment tax return (typically Form 941). The exact time it requires to process the credit can vary based on a number of elements, including the complexity of your business and the workload of the internal revenue service. It’s advised to talk to a tax expert for assistance particular to your situation.
There are numerous companies that can help with the process of declaring the ERC. These consist of accounting firms, tax advisory services, and payroll service providers. Some widely known business that use assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research study and get in touch with these companies directly to ask about their services and costs.
Please note that the details provided here is based on general understanding and may not reflect the most current updates or changes to the ERC. It is necessary to talk to a tax professional or visit the main IRS site for the most current and accurate information relating to eligibility, declaring treatments, and readily available assistance.
Less than 100. If the company had 100 or less workers on average in 2019, then the credit is based.
on incomes paid to all employees whether they actually worked or not. In other words, even if the.
employees 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 only for wages paid to staff members who did not work during the calendar quarter.
In both cases, “salaries” consists of not simply cash payments however likewise a portion of the expense of employer.
supplied health care. Employee Retention Credit State Treatment
Payment.
Companies can be immediately compensated for the credit by minimizing the amount of payroll taxes they.