Lets talk first about Employee Retention Credit Vs Ffcra :
Our group here what do these men doing everybody in this room is helping teach people about ERC and uh constantly offer a gorgeous breakfast and have individuals truly find out about the program we ought to head to the room where we have the ability to display some of the checks that we are getting for business and I wish to see that what is this this is uh hundreds of millions of dollars actually Kevin hundreds of millions of dollars so these are duplicate copies of the letters that go to clients validating that the check is on the method I mean you understand if you simply start to look at some of these here I indicate this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I imply it’s simply I suggest think about the number of actual customers 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 IRS heading to the consumer 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 up until they actually receive the money they do not pay bottom line Wonder trust anything up until this letter is verified the check is on the way they deposit it into their checking account and they can truly rely on Wonder trust that the process has actually been ended up and how many you think you’ve processed since 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 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 talking about something truly important today the worker retention credit which most of you have never become aware of I certainly hadn’t heard of it up until extremely recently and learned a lot about it due to the fact that this is probably the lowest expense of capital for any small company anywhere
anytime if you have employees between five and five hundred so I’ve got the professional with me this is Josh Fox he’s the creator and CEO of bottom line Principles 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 just call your bank manager 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’ve become yes the Ambassador and paid representative for this I love this program it’s disappearing very soon you got to find out all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply start there so throughout the Trump Administration when President Trump was enacted they developed the cares Act and the cares act offered companies 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everybody it makes a huge distinction 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 okay go on sorry I just need to ensure we got that point I mean that’s a huge distinction a loan versus cash cash I like money money 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 beautiful difficult check in the mail where you get actual cash from the IRS all right so let’s discuss how it works since it sounds like to me if it’s a if it’s worker retention credit that person needed to be a worker 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 staff members right you had to have actually owned an organization but it’s based on you having W-2 workers in America not 10.99. so as long as you had W-2 staff members 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 need to be on payroll for the very first six months of 2021 on the W-2 correct so there were 6 quarters the program was open well stroll us through the 6 quarters so you had quarters 2 3 and four of 2020 and you had quarters one 2 and three of 2021. okay so that’s how it’s determined you have to be on the W-2 throughout that period now let’s talk my favorite part cash just how much can you get back per staff member that was on a W-2 in those six quarters so the computation in 2020 to be exact Kevin is 50 of the staff member’s wage to a maximum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the employee’s income to an optimum of seven thousand per quarter how did that take place um they simply altered the rules in.
2021 versus because the mayhem of the pandemic so they wished to even get more to keep those workers 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 6 thousand twenty one thousand to twenty twenty one plus 5 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 caution here the PPP cash 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 somewhere around 10 thousand dollars a person so let’s say hypothetically you owned a restaurant in New york city City where I’m from and you had a hundred staff members and you took PPP money you would still get a million dollar in the mail from the IRS so it’s big obviously now the huge concern is why does no one understand about this due to the fact that appearance when I first became aware of this when I first satisfied Josh you know I’ve got lots of financial investments in great deals of companies I’m a significant advocate for entrepreneurship in America and make numerous numerous financial investments in business owners of which lots of suffered through the pandemic when I first heard about this I called BS I do not think it since I use the PPP we went through the cash center Banks to get it it was extremely easy to do we had our CEOs call the banks they got their loans which were well deserved and we utilized them wisely to survive throughout the pandemic so when I became aware of this I said nah it can’t be true however when I dug around I even contacted us to my political leader pals Governor Senators they didn’t know about it I imply that’s how you understand that’s how misinformation is that there’s no information out there then a bunch of individuals told me well you can’t get it because you took the PPP also not true so let’s ask Josh why does nobody know about the employee retention credit you understand 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 wanted a PPP loan you would call Wells Fargo Citibank Bank of America any of the big 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 process procedure that’s all um and here there was chaos due to the fact that keep in mind in the initial cares act you might refrain from doing both programs so if you had done PPP you might refrain from doing ERC in the original program and when they changed the law in 2021 the banks were not doing ERC due to the fact that it’s not alone so you’re getting a tax refund so the government never ever made it clear to anyone about how to.
do this does your CFO understand how to do this not actually she or he’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 accountant no your accounting professional’s never done this prior to unless you have an account that went into this business and bottom line my firm Kevin has stayed in business because 2009 and we’ve been dealing with the federal government and the state federal government to recuperate money for Fortune 500 Fortune 1000 business so a great deal of our big big corporate clients have actually worked with bottom line to recover other government programs we’ve done sales tax and use tax joblessness tax work chance tax credits research and development tax credits unclaimed property real estate tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit created to motivate.
employers to keep workers on their payroll. The credit is 50% of approximately $10,000 in earnings paid by an.
Since of COVID-19 or whose gross receipts, employer whose business is totally or partially suspended.
decline by more than 50%.
1. The credit is readily available to all companies regardless of size consisting of tax exempt companies. There are.
just 2 exceptions: (1) state and city governments and their instrumentalities and (2) little.
organizations who take Small Business Loans.
2. To certify, the employer has to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s company is totally or partly suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross invoices are below 50% of the similar quarter in 2019. As soon as the.
employer’s gross invoices exceed 80% of a comparable quarter in 2019 they no longer certify.
after the end of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the certifying salaries paid up to $10,000 in total.
It is effective for earnings paid after March 13th and before December 31, 2020.
The definition of qualifying earnings varies by whether a company had, typically, basically than.
100 workers in 2019.
Business that concentrate on ERC filing support generally offer knowledge and support to assist services browse the complicated procedure of declaring the credit. They can offer different services, including:.
How is the employee retention credit calculated? Employee Retention Credit Vs Ffcra
Eligibility Evaluation: These business will examine your company’s eligibility for the ERC based on factors such as your market, income, and operations. They can assist determine if you fulfill the requirements for the credit and determine the optimum credit quantity you can claim.
Documents and Calculation: ERC filing services will assist in collecting the essential documentation, such as payroll records and financial statements, to support your claim. They will likewise help determine the credit amount based on eligible incomes and other certifying costs.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for prior quarters, these companies can examine your previous payroll records and financials to determine prospective opportunities for retroactive credits. They can assist you modify previous income tax return to declare these refunds.
Filing Help: Business focusing on ERC filings will prepare and submit the needed types and documents in your place. This includes completing Form 941 or any other required tax forms.
Compliance and Updates: ERC regulations and guidance have actually developed with time. These companies remain upgraded with the most recent modifications and guarantee that your filings abide by the most present guidelines. If the Internal revenue service requests additional details or conducts an audit related to your ERC claim, they can also provide ongoing assistance.
It is essential to research study and vet any company using ERC filing support to guarantee their trustworthiness and competence. Search for recognized companies with experience in tax and payroll services, or consider reaching out to trusted accounting companies or tax professionals who provide ERC submitting assistance.
Remember that while these companies can provide valuable assistance, it’s constantly a good idea to have a fundamental understanding of the ERC requirements and procedure yourself. This will help you make notified choices and make sure 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 procedures. The goal of the ERC is to motivate services to retain and pay their workers throughout the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to qualified companies, consisting of for-profit businesses, tax-exempt organizations, and certain governmental entities. To qualify, employers must meet one of two criteria:.
The business operations were fully or partially suspended due to a federal government order related to COVID-19.
The business experienced a considerable decline in gross receipts. As pointed out 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 significant decline is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decrease in gross receipts compared to the right away preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount is equal to a percentage (up to 70%) of certified earnings paid to staff members, consisting of specific health plan costs. 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: Initially, organizations that received a Paycheck Defense Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 allows businesses to declare the ERC even if they got a PPP loan. However, the same salaries can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and enhanced, enabling qualified companies to claim the credit for certified salaries paid as far back as March 13, 2020. This retroactive arrangement offers a chance for businesses to modify prior-year tax returns and get refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their employment tax returns, usually Type 941. The excess can be reimbursed to the employer if the credit surpasses the amount of work taxes owed.
It is essential to note that the ERC arrangements and eligibility criteria have actually evolved with time. The best strategy is to speak with a tax professional or visit the official IRS site for the most updated and comprehensive details relating to the ERC, including any recent legislative changes or updates.
To qualify for the ERC, a company must satisfy among the following criteria:.
Business operations were completely or partially suspended due to a government order related to COVID-19.
The business experienced a substantial decrease in gross receipts. For 2021, a substantial decline is defined as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decline in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
The ERC is readily available to companies of all sizes, including tax-exempt companies, however there are some exceptions. Government entities and organizations that received a PPP loan may have limitations on claiming the credit.
The procedure for declaring the ERC includes completing the essential types and consisting of the credit on your employment tax return (typically Type 941). The exact time it requires to process the credit can differ based upon numerous factors, consisting of the intricacy of your service and the workload of the internal revenue service. It’s suggested to talk to a tax expert for guidance specific to your scenario.
There are numerous business that can assist with the procedure of claiming the ERC. Some widely known business that use help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the details provided here is based upon basic knowledge and may not reflect the most current updates or changes to the ERC. It’s important to consult with a tax expert or go to the official internal revenue service website for the most current and precise info concerning eligibility, declaring procedures, and offered assistance.
Less than 100. The credit is based if the employer had 100 or less staff members on average in 2019.
on wages paid to all employees whether they in fact worked or not. In other words, even if the.
employees worked full time and made money for full time work, the employer still gets the credit.
Greater than 100. The credit is if the employer had more than 100 employees on average in 2019.
permitted just for salaries paid to employees who did not work during the calendar quarter.
In both cases, “earnings” includes not simply money payments but also a part of the cost of company.
provided health care. Employee Retention Credit Vs Ffcra
Companies can be immediately reimbursed for the credit by lowering the amount of payroll taxes they.