Lets talk first about Employee Retention Credit Vs Payroll Protection Program :
Our group here what do these guys doing everyone in this room is assisting teach people about ERC and uh constantly supply a gorgeous breakfast and have individuals really discover the program we should head to the room where we have the ability 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 millions of dollars literally Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to customers verifying that the check is on the method I imply you know if you simply start to take a 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 simply I suggest consider how many real clients 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 confirmed and the check is on the mail in the mail from the IRS heading to the customer so that’s how you’re able to track it you know when you
receive this you know the check is gone for sure which’s when they pay so they do not pay anything till they actually receive the money they do not pay bottom line Wonder trust anything until this letter is validated the check is on the way they transfer 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 have actually processed given that you started this we’re about 35 000 of these for
about six billion dollars wow so clearly they know what they’re doing and that’s what you need you require experts 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 Wonderful here you’re at my YouTube channel we’re discussing something really important today the employee retention credit which most of you have never ever become aware of I certainly hadn’t become aware of it up until very just recently and found out a lot about it due to the fact that this is most likely the most affordable cost of capital for any small company anywhere
anytime if you have workers between 5 and five hundred so I’ve got the professional with me this is Josh Fox he’s the founder and CEO of bottom line Ideas they’re the largest processor of these ERC credits this is a 170 page program so it’s difficult this isn’t like PPP we simply call your bank supervisor and say provide me a loan it doesn’t 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’ve ended up being yes the Ambassador and paid representative for this I love this program it’s going away soon you got to learn everything about it let’s talk employee retention credit Josh Fox what is an ERC let’s just start there so during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act offered organizations 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everybody it makes a big distinction right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
fix the cash money payroll tax refund okay go on sorry I simply have to make sure we got that point I imply that’s a big difference a loan versus cash money I like money cash that’s what we’re talking 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 initial cares Act is the ERC and yes Kevin it is a stunning difficult check in the mail where you get real money from the internal revenue service all right so let’s speak about how it works since it sounds like to me if it’s a if it’s employee retention credit that individual needed to be a worker so I’m going to make the Assumption this cash is not for the owner not for people on the cap table not for investors it’s for staff members right you needed to have owned a service however it’s based on you having W-2 staff members in America not 10.99. As long as you had W-2 staff members 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 three and 4 of 2020 and you had quarters one 2 and three of 2021. all right so that’s how it’s determined you need to be on the W-2 during that duration now let’s talk my preferred part cash 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 precise Kevin is 50 of the worker’s salary to an optimum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the worker’s salary to an optimum 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 wished to even get more to keep those staff members 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 takes place 21 000 Max in 2021 oh that’s how you develop twenty six 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 great deal of cash it is now there’s a caveat here the PPP money would have to be lowered from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would reduce the 26 000 so what we’re seeing typically Kevin is if you took PPP money someplace around ten thousand dollars an individual so let’s state hypothetically you owned a dining establishment in New york city 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 big certainly now the big concern is why does no one understand about this since look when I initially heard about this when I initially met Josh you know I’ve got lots of investments in great deals of companies I’m a major advocate for entrepreneurship in America and make many numerous financial investments in business owners of which lots of suffered through the pandemic when I first found out about this I called BS I do not believe it because 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 which were well should have and we used them wisely to stay alive during the pandemic so when I became aware of this I said nah it can’t be true however when I dug around I even called to my political leader friends Governor Senators they didn’t learn about it I indicate that’s how you understand that’s how misinformation is that there’s no info out there then a lot of people told me well you can’t get it since you took the PPP likewise not true so let’s ask Josh why does no one learn about the employee retention credit you understand what’s interesting you’re talking about the banks Kevin since 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 procedure 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 keep in mind in the original cares act you could refrain from doing both programs so if you had actually done PPP you might not do ERC in the original program and when they changed the law in 2021 the banks were refraining from doing ERC because 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 done it in the past do the banks do it nope the banks don’t do it the payroll companies yeah some of them are doing it as a payroll company your accounting professional no your accountant’s never done this before unless you have an account that entered into this company and bottom line my firm Kevin has actually stayed in business because 2009 and we have actually been working with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 business so a lot of our big huge corporate customers have 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 federal government programs.
The staff member retention tax credit is a broad based refundable tax credit created to encourage.
employers to keep employees on their payroll. The credit is 50% of up to $10,000 in incomes paid by an.
employer whose organization is completely or partially suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
1. The credit is readily 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.
services who take Small company Loans.
2. To qualify, the employer needs to satisfy one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s company is completely or partially suspended by 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. Once the.
employer’s gross receipts exceed 80% of an equivalent quarter in 2019 they no longer qualify.
after completion of that quarter.
Calculation 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 prior to December 31, 2020.
The definition of certifying incomes varies by whether a company had, on average, basically than.
100 workers in 2019.
Business that specialize in ERC filing assistance normally supply proficiency and assistance to help organizations navigate the complicated process of declaring the credit. They can use various services, including:.
How is the employee retention credit calculated? Employee Retention Credit Vs Payroll Protection Program
Eligibility Evaluation: These companies will assess your business’s eligibility for the ERC based on aspects such as your industry, income, and operations. They can help determine if you satisfy the requirements for the credit and recognize the optimum credit quantity you can claim.
Documents and Estimation: ERC filing services will assist in collecting the required documents, such as payroll records and financial statements, to support your claim. They will likewise assist calculate the credit amount based on eligible wages and other qualifying costs.
Retroactive Claim Evaluation: If you are eligible to claim the ERC for previous quarters, these companies can evaluate your past payroll records and financials to recognize prospective chances for retroactive credits. They can assist you modify prior tax returns to claim these refunds.
Filing Support: Business specializing in ERC filings will prepare and send the essential kinds and documents in your place. This includes completing Type 941 or any other necessary tax forms.
Compliance and Updates: ERC policies and guidance have actually developed over time. These business remain upgraded with the most recent changes and make sure that your filings comply with the most current guidelines. If the Internal revenue service requests additional details or performs an audit associated to your ERC claim, they can likewise provide continuous support.
It’s important to research study and veterinarian any business using ERC filing assistance to guarantee their trustworthiness and competence. Search for established companies with experience in tax and payroll services, or think about reaching out to relied on accounting firms or tax specialists who offer ERC filing assistance.
Keep in mind that while these business can provide valuable support, it’s constantly an excellent concept to have a basic understanding of the ERC requirements and procedure yourself. This will help you make informed decisions and make sure accurate filings.
The Worker Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief procedures. The objective of the ERC is to motivate companies to keep and pay their employees throughout the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to qualified companies, consisting of for-profit organizations, tax-exempt organizations, and specific governmental entities. To certify, employers must fulfill one of two criteria:.
Business operations were totally or partially suspended due to a government order related to COVID-19.
Business experienced a substantial decline in gross invoices. As discussed earlier, for 2021, a significant decrease is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a considerable decrease is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decline in gross receipts compared to the right away 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 percentage (approximately 70%) of certified wages paid to employees, including certain health insurance costs. The optimum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, services that received an Income Security Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 permits organizations to declare the ERC even if they got a PPP loan. Nevertheless, the very same incomes can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and improved, allowing qualified companies to declare the credit for certified wages paid as far back as March 13, 2020. This retroactive arrangement supplies a chance for organizations to amend prior-year income tax return and receive refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their employment tax returns, generally Type 941. If the credit surpasses the quantity of employment taxes owed, the excess can be reimbursed to the company.
It is necessary to note that the ERC provisions and eligibility requirements have developed in time. The best course of action is to consult with a tax expert or visit the official internal revenue service site for the most up-to-date and comprehensive information regarding the ERC, consisting of any recent legislative changes or updates.
To get approved for the ERC, an organization should fulfill among the following requirements:.
Business operations were totally or partly suspended due to a government order related to COVID-19.
The business experienced a considerable decrease in gross invoices. For 2021, a considerable decline is specified as a 20% decrease in gross receipts 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 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 organizations, but there are some exceptions. Government entities and businesses that received a PPP loan may have constraints on claiming the credit.
The process for declaring the ERC involves finishing the necessary types and consisting of the credit on your employment income tax return (normally Form 941). The exact time it takes to process the credit can differ based upon several elements, consisting of the intricacy of your organization and the workload of the internal revenue service. It’s suggested to consult with a tax professional for guidance particular to your circumstance.
There are a number of business that can aid with the process of declaring the ERC. These include accounting firms, tax advisory services, and payroll service providers. Some widely known companies that use support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research study and call these business straight to ask about their services and costs.
Please note that the info supplied here is based upon general knowledge and might not reflect the most recent updates or changes to the ERC. It is very important to seek advice from a tax expert or go to the main IRS website for the most precise and up-to-date information regarding eligibility, declaring procedures, and offered support.
Less than 100. The credit is based if the company had 100 or fewer staff members on average in 2019.
on incomes paid to all employees whether they actually worked or not. To put it simply, even if the.
staff members worked full time and got paid for full time work, the employer still gets the credit.
Greater than 100. If the employer had more than 100 staff members usually in 2019, then the credit is.
allowed only for incomes paid to staff members who did not work throughout the calendar quarter.
In both cases, “wages” includes not just money payments but likewise a part of the expense of company.
supplied healthcare. Employee Retention Credit Vs Payroll Protection Program
Employers can be instantly repaid for the credit by minimizing the quantity of payroll taxes they.