Lets talk first about Irs Gearing Up For Audits Of Employee Retention Credits :
Our team here what do these people doing everyone in this room is helping teach people about ERC and uh constantly provide a stunning breakfast and have people truly find out about the program we ought to head to the space where we have the ability to show 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 literally Kevin numerous millions of dollars so these are duplicate copies of the letters that go to customers confirming that the check is on the way I suggest you understand if you just begin 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 indicate think of 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 validated and the check is on the mail in the mail from the internal revenue service heading to the consumer so that’s how you’re able to track it you know when you
get this you understand the check is opted for sure and that’s when they pay so they do not pay anything until they really receive the cash they don’t pay bottom line Wonder trust anything till this letter is validated the check is on the way they transfer it into their savings account and they can genuinely trust Wonder trust that the process has actually been ended up and the number of you think you have actually processed given that you began this we have to do with 35 000 of these for
about six billion dollars wow so clearly they understand what they’re doing which’s what you require you need professionals 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 Fantastic here you’re at my YouTube channel we’re discussing something truly essential today the employee retention credit which the majority of you have never ever become aware of I certainly had not become aware of it till very recently and discovered a lot about it due to the fact that this is most likely the most affordable cost of capital for any small business anywhere
anytime if you have employees in between 5 and five hundred so I’ve got the specialist with me this is Josh Fox he’s the creator and CEO of bottom line Concepts they’re the largest processor of these ERC credits this is a 170 page program so it’s hard this isn’t like PPP we simply contact your bank manager and state provide me a loan it does not 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 ended up being yes the Ambassador and paid representative for this I love this program it’s disappearing very soon you got to find out everything 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 came up with the cares Act and the cares act provided organizations 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everyone it makes a huge difference right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
fix the cash cash payroll tax refund fine go on sorry I just have to make certain we got that point I indicate that’s a big difference a loan versus money money I like cash cash that’s what we’re discussing all right 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 beautiful hard check in the mail where you get real money from the IRS all right so let’s talk about how it works because it sounds like to me if it’s a if it’s staff member retention credit that individual needed to be an employee 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 employees right you needed to have actually owned a company but it’s based upon you having W-2 employees in America not 10.99. so as long as you had W-2 workers and you paid federal payroll taxes that’s why you would be eligible so you need to be on payroll in 2020 on the W-2 and you have to be on payroll for the very first 6 months of 2021 on the W-2 right so there were six quarters the program was open well walk us through the six quarters so you had quarters two three and four of 2020 and you had quarters one 2 and three of 2021. okay so that’s how it’s determined you need to be on the W-2 during that period now let’s talk my favorite part money just how much can you return per employee that was on a W-2 in those six quarters so the calculation in 2020 to be exact Kevin is 50 of the employee’s salary to a maximum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the worker’s wage to a maximum of seven thousand per quarter how did that occur um they simply altered the rules in.
2021 versus since the chaos 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 five thousand Max and after that what happens 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 staff member that is because that’s a lot of money it is now there’s a caution here the PPP cash would need to be lowered from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would decrease the 26 000 so what we’re seeing on average Kevin is if you took PPP cash somewhere around ten 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 clearly now the huge concern is why does nobody know about this since look when I first became aware of this when I first met Josh you understand I’ve got great deals of investments in lots of business I’m a significant advocate for entrepreneurship in America and make many numerous investments in business owners of which lots of suffered through the pandemic when I initially heard about this I called BS I don’t believe it due to the fact that I utilize 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 been worthy of and we used them carefully to stay alive during the pandemic so when I became aware of this I said nah it can’t hold true however when I dug around I even called to my political leader pals Governor Senators they didn’t know about it I mean that’s how you understand that’s how false information is that there’s no details out there then a lot of people informed me well you can’t get it due to the fact that you took the PPP likewise not true so let’s ask Josh why does nobody understand about the worker retention credit you understand what’s intriguing you’re discussing the banks Kevin because in the PPP loan procedure 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 process in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply process process that’s all um and here there was mayhem due to the fact that keep in mind in the initial cares act you might not do both programs so if you had actually done PPP you could refrain from doing ERC in the initial 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 know how to do this not actually she or he’s never ever done it in the past 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 accounting professional’s never ever done this prior to unless you have an account that went into this business and bottom line my firm Kevin has actually been in business because 2009 and we’ve been working with the federal government and the state federal government to recuperate money for Fortune 500 Fortune 1000 companies so a lot of our huge big corporate customers have actually dealt with bottom line to recover other government programs we have actually done sales tax and use tax joblessness tax work chance tax credits research and development tax credits unclaimed home property tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit created to encourage.
employers to keep staff members on their payroll. The credit is 50% of up to $10,000 in incomes paid by an.
Since of COVID-19 or whose gross invoices, employer whose service is completely or partly suspended.
decline by more than 50%.
1. The credit is readily available to all companies despite size consisting of tax exempt organizations. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
services who take Small Business Loans.
2. To qualify, the company has to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s organization is completely or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross receipts are below 50% of the equivalent quarter in 2019. When the.
employer’s gross invoices exceed 80% of a comparable quarter in 2019 they no longer certify.
after completion of that quarter.
Computation of the Credit.
The quantity of the credit is 50% of the qualifying earnings paid up to $10,000 in overall.
It is effective for salaries paid after March 13th and prior to December 31, 2020.
The meaning of certifying earnings varies by whether an employer had, typically, basically than.
100 staff members in 2019.
Business that specialize in ERC filing support generally supply know-how and assistance to assist services navigate the complex process of declaring the credit. They can provide various services, including:.
How is the employee retention credit calculated? Irs Gearing Up For Audits Of Employee Retention Credits
Eligibility Evaluation: These business will evaluate your business’s eligibility for the ERC based on aspects such as your industry, earnings, and operations. They can assist determine if you fulfill the requirements for the credit and recognize the maximum credit amount you can claim.
Documents and Calculation: ERC filing services will help in collecting the necessary documents, such as payroll records and financial declarations, to support your claim. They will also assist calculate the credit amount based on qualified earnings and other qualifying costs.
Retroactive Claim Review: If you are qualified to declare the ERC for previous quarters, these companies can examine your previous payroll records and financials to recognize prospective chances for retroactive credits. They can help you amend prior income tax return to claim these refunds.
Filing Support: Business specializing in ERC filings will prepare and send the necessary types and documentation in your place. This consists of completing Form 941 or any other required tax return.
Compliance and Updates: ERC regulations and assistance have actually evolved over time. These business stay upgraded with the most recent modifications and ensure that your filings comply with the most present guidelines. If the Internal revenue service requests additional information or conducts an audit associated to your ERC claim, they can likewise provide ongoing support.
It is very important to research and vet any company offering ERC filing support to guarantee their credibility and know-how. Look for established firms with experience in tax and payroll services, or consider connecting to relied on accounting companies or tax specialists who use ERC filing assistance.
Keep in mind that while these companies can provide important assistance, it’s always an excellent concept to have a basic understanding of the ERC requirements and process yourself. This will help you make informed decisions and ensure accurate filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief measures. The objective of the ERC is to encourage businesses to maintain and pay their staff members during the pandemic, even if their operations have actually been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to eligible companies, consisting of for-profit services, tax-exempt companies, and particular governmental entities. To qualify, companies must satisfy one of two criteria:.
The business operations were totally or partially suspended due to a federal government order related to COVID-19.
Business experienced a significant decline in gross receipts. As mentioned earlier, for 2021, a substantial decrease is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a considerable decline is defined 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 immediately preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit quantity amounts to a percentage (approximately 70%) of qualified salaries paid to employees, consisting of certain health plan expenditures. The maximum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, services that received a Paycheck Defense Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 permits services to declare the ERC even if they got a PPP loan. However, the exact same earnings can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively broadened and enhanced, enabling eligible employers to claim the credit for certified earnings paid as far back as March 13, 2020. This retroactive arrangement provides a chance for services to amend prior-year tax returns and receive refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their work tax returns, typically Kind 941. The excess can be reimbursed to the company if the credit surpasses the quantity of employment taxes owed.
It is essential to note that the ERC arrangements and eligibility requirements have evolved with time. The very best strategy is to consult with a tax expert or check out the official internal revenue service site for the most updated and comprehensive details relating to the ERC, consisting of any recent legislative modifications or updates.
To receive the ERC, a business should fulfill one of the following criteria:.
The business operations were totally or partially suspended due to a federal government order related to COVID-19.
The business experienced a substantial decrease in gross receipts. For 2021, a significant decrease is specified as a 20% decrease 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 invoices compared to the exact same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
The ERC is available to businesses of all sizes, including tax-exempt companies, however there are some exceptions. Government entities and businesses that got a PPP loan might have constraints on claiming the credit.
The process for claiming the ERC involves finishing the needed types and including the credit on your employment income tax return (typically Type 941). The exact time it requires to process the credit can differ based on a number of factors, consisting of the complexity of your service and the workload of the internal revenue service. It’s recommended to speak with a tax expert for assistance specific to your situation.
There are a number of business that can aid with the procedure of declaring the ERC. These consist of accounting companies, tax advisory services, and payroll service providers. Some popular business that offer assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research study and contact these companies straight to inquire about their services and costs.
Please keep in mind that the details provided here is based upon general knowledge and might not reflect the most recent updates or modifications to the ERC. It is very important to seek advice from a tax professional or go to the main internal revenue service website for the most accurate and up-to-date information regarding eligibility, declaring treatments, and readily available support.
Less than 100. If the employer had 100 or fewer employees usually in 2019, then the credit is based.
on incomes paid to all workers whether they in fact worked or not. To put it simply, even if the.
workers worked full time and earned 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.
enabled just for wages paid to workers who did not work during the calendar quarter.
In both cases, “incomes” consists of not simply money payments however also a part of the cost of company.
supplied healthcare. Irs Gearing Up For Audits Of Employee Retention Credits
Companies can be right away reimbursed for the credit by minimizing the amount of payroll taxes they.