Lets talk first about Financial Statement Presentation Of Employee Retention Credit :
Our group here what do these guys doing everybody in this space is assisting teach people about ERC and uh always offer a gorgeous breakfast and have individuals truly learn more about the program we must head to the space where we are able to show a few 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 countless dollars so these are replicate copies of the letters that go to clients confirming that the check is on the method I mean you know if you just begin 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 party 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 customer so that’s how you have the ability to track it you understand 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 actually get the money they do not pay bottom line Wonder trust anything until this letter is verified the check is on the method they transfer it into their bank account and they can truly rely on Wonder trust that the process has been finished and the number of you think you have actually processed considering that you began this we’re about 35 000 of these for
about 6 billion dollars wow so clearly they understand what they’re doing which’s what you need you need 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 Terrific 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 actually never ever become aware of I certainly hadn’t heard of it up until very recently and learned a lot about it due to the fact that this is probably the most affordable expense of capital for any small business anywhere
anytime if you have staff members between five and five hundred so I’ve got the expert with me this is Josh Fox he’s the founder and CEO of bottom line Principles they’re the biggest processor of these ERC credits this is a 170 page program so it’s not easy this isn’t like PPP we simply contact 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 inform us all about it and how to get it and why I’ve ended up being yes the Ambassador and paid spokesperson 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 during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act offered businesses 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everyone it makes a huge distinction right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the money cash payroll tax refund all right go on sorry I simply have to ensure we got that point I mean that’s a big difference a loan versus money money I like cash cash that’s what we’re discussing 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 stunning tough check in the mail where you get actual money from the internal revenue service all right so let’s discuss how it works since it seems like to me if it’s a if it’s worker retention credit that person needed to be a staff member so I’m going to make the Presumption this money is not for the owner not for individuals on the cap table not for investors it’s for workers right you had to have owned a company but it’s based upon you having W-2 workers 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 very first six months of 2021 on the W-2 appropriate so there were six quarters the program was open well stroll us through the six quarters so you had quarters 2 3 and 4 of 2020 and you had quarters one 2 and 3 of 2021. fine so that’s how it’s determined you need to be on the W-2 during that period now let’s talk my preferred part money 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 precise Kevin is 50 of the worker’s income to an optimum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers increased to 70 of the worker’s income to a maximum of 7 thousand per quarter how did that take place um they simply changed the rules in.
2021 versus since the mayhem of the pandemic so they wanted 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 up to 5 thousand Max and after that 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 worker that is because that’s a great deal of money it is now there’s a caveat here the PPP cash would have to be minimized from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would decrease the 26 000 so what we’re seeing typically Kevin is if you took PPP cash somewhere around 10 thousand dollars a person so let’s state hypothetically you owned a restaurant in New York City where I’m from and you had a hundred staff members and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s huge obviously now the huge concern is why does nobody learn about this due to the fact that look when I initially found out about this when I initially met Josh you know I have actually got lots of financial investments in lots of companies I’m a significant advocate for entrepreneurship in America and make numerous numerous investments in entrepreneurs of which many suffered through the pandemic when I initially heard about this I called BS I don’t believe it since I utilize the PPP we went through the cash 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 carefully to survive throughout the pandemic so when I heard 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 Guv Senators they didn’t understand about it I indicate that’s how you know that’s how misinformation is that there’s no details out there then a lot of people informed me well you can’t get it because you took the PPP likewise not true so let’s ask Josh why does no one know about the staff member retention credit you know what’s interesting you’re speaking about the banks Kevin because 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 big 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 simply 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 refrain from doing 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 because it’s not alone so you’re getting a tax refund so the government never ever made it clear to any person about how to.
do this does your CFO know how to do this not really he or she’s never done it before do the banks do it nope the banks do not do it the payroll business yeah a few of them are doing it as a payroll business your accounting professional no your accounting professional’s never ever done this before unless you have an account that entered into this organization and bottom line my firm Kevin has been in business since 2009 and we have actually been working with the federal government and the state government to recuperate money for Fortune 500 Fortune 1000 companies so a great deal of our huge huge business customers have worked with bottom line to recover other federal government programs we have actually done sales tax and use tax joblessness tax work chance tax credits research and development tax credits unclaimed property property tax all of these other federal government programs.
The staff member retention tax credit is a broad based refundable tax credit designed to motivate.
companies to keep staff members on their payroll. The credit is 50% of approximately $10,000 in incomes paid by an.
Because of COVID-19 or whose gross receipts, company whose business is fully or partly suspended.
decline by more than 50%.
1. The credit is available to all companies no matter size consisting of tax exempt companies. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) small.
businesses who take Small Business Loans.
2. To qualify, the employer needs to satisfy one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s business is fully or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the equivalent quarter in 2019. As soon as the.
employer’s gross invoices exceed 80% of a similar quarter in 2019 they no longer certify.
after completion of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the qualifying salaries paid up to $10,000 in total.
It is effective for incomes paid after March 13th and prior to December 31, 2020.
The definition of certifying salaries varies by whether an employer had, usually, more or less than.
100 workers in 2019.
Companies that specialize in ERC filing help usually offer knowledge and support to assist companies navigate the intricate process of declaring the credit. They can offer different services, consisting of:.
How is the employee retention credit calculated? Financial Statement Presentation Of Employee Retention Credit
Eligibility Assessment: These companies will examine your service’s eligibility for the ERC based upon elements such as your industry, income, and operations. If you satisfy the requirements for the credit and recognize the maximum credit quantity you can claim, they can help figure out.
Documents and Estimation: ERC filing services will assist in gathering the necessary paperwork, such as payroll records and monetary statements, to support your claim. They will also help determine the credit quantity based on eligible earnings and other certifying costs.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for prior quarters, these companies can evaluate your previous payroll records and financials to determine possible opportunities for retroactive credits. They can help you change prior tax returns to declare these refunds.
Filing Support: Companies specializing in ERC filings will prepare and submit the needed forms and documentation on your behalf. This consists of finishing Type 941 or any other necessary tax return.
Compliance and Updates: ERC regulations and guidance have developed in time. These business remain upgraded with the latest changes and make sure that your filings adhere to the most present guidelines. They can also provide ongoing assistance if the internal revenue service requests additional information or carries out an audit related to your ERC claim.
It is very important to research and vet any company using ERC filing help to ensure their reliability and know-how. Try to find established companies with experience in tax and payroll services, or think about reaching out to trusted accounting companies or tax professionals who offer ERC filing support.
Keep in mind that while these business can supply valuable assistance, it’s always a good idea to have a basic understanding of the ERC requirements and process yourself. This will assist you make notified decisions and ensure accurate filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief steps. The objective of the ERC is to motivate organizations to retain and pay their employees throughout the pandemic, even if their operations have actually been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to eligible companies, including for-profit organizations, tax-exempt companies, and certain governmental entities. To certify, employers must fulfill one of two requirements:.
The business operations were totally or partly suspended due to a government order related to COVID-19.
Business experienced a substantial decline in gross receipts. As mentioned previously, for 2021, a substantial decrease is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decline in gross invoices compared to the very same quarter in 2019, or a 20% decline in gross invoices compared to the instantly 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 qualified wages paid to workers, including specific health insurance expenses. 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: At first, businesses that received an Income Protection Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 allows services to declare the ERC even if they received a PPP loan. The same earnings can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively expanded and improved, allowing qualified employers to declare the credit for qualified earnings paid as far back as March 13, 2020. This retroactive provision supplies an opportunity for businesses to amend prior-year income tax return and receive refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their employment tax returns, generally Kind 941. If the credit goes beyond the quantity of employment taxes owed, the excess can be refunded to the company.
It is necessary to keep in mind that the ERC provisions and eligibility requirements have actually developed gradually. The very best strategy is to consult with a tax professional or go to the main IRS site for the most detailed and current information concerning the ERC, including any recent legislative changes or updates.
To qualify for the ERC, a business should satisfy one of the following requirements:.
Business operations were totally or partially suspended due to a government order related to COVID-19.
The business experienced a considerable decrease in gross receipts. For 2021, a substantial decrease is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the immediately preceding quarter.
The ERC is available to companies of all sizes, consisting of tax-exempt companies, but there are some exceptions. Federal government entities and businesses that got a PPP loan might have constraints on declaring the credit.
The process for declaring the ERC involves completing the essential 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 upon numerous aspects, consisting of the intricacy of your service and the work of the IRS. It’s advised to talk to a tax professional for assistance particular to your circumstance.
There are several companies that can assist with the procedure of declaring the ERC. These include accounting firms, tax advisory services, and payroll service providers. Some widely known companies that provide help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research and call these business straight to ask about their costs and services.
Please note that the details supplied here is based on general understanding and might not reflect the most recent updates or modifications to the ERC. It is necessary to speak with a tax professional or check out the official IRS site for the most precise and current info regarding eligibility, claiming treatments, and offered support.
Less than 100. If the employer had 100 or fewer staff members on average in 2019, then the credit is based.
on wages paid to all staff members whether they in fact worked or not. To put it simply, even if the.
workers 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 only for wages paid to staff members who did not work during the calendar quarter.
In both cases, “earnings” consists of not simply cash payments but likewise a part of the expense of employer.
offered health care. Financial Statement Presentation Of Employee Retention Credit
Companies can be right away compensated for the credit by decreasing the amount of payroll taxes they.