Lets talk first about State Tax Treatment Of Employee Retention Credit :
Our team here what do these guys doing everyone in this room is helping teach individuals about ERC and uh always offer a lovely breakfast and have people actually discover the program we must head to the room where we have the ability to display a few of the checks that we are getting for business and I want to see that what is this this is uh hundreds of millions of dollars actually Kevin numerous countless dollars so these are duplicate copies of the letters that go to customers verifying that the check is on the method I indicate you know if you simply begin to take a 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 suggest it’s just I mean consider how many real 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 client so that’s how you have the ability to track it you understand when you
receive this you know the check is opted for sure and that’s when they pay so they do not pay anything up until they really receive the cash they do not pay bottom line Wonder trust anything up until this letter is verified the check is on the way they transfer it into their bank account and they can really trust Wonder trust that the process has actually been completed and the number of you think you have actually processed given that you started 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 need you require 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 Fantastic here you’re at my YouTube channel we’re discussing something really important today the worker retention credit which most of you have actually never heard of I certainly hadn’t heard of it till extremely 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 workers in between 5 and five hundred so I’ve got the specialist with me this is Josh Fox he’s the founder and CEO of bottom line Ideas they’re the biggest processor of these ERC credits this is a 170 page program so it’s difficult this isn’t like PPP we just contact your bank manager and say give me a loan it does not 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 spokesperson for this I like this program it’s disappearing very soon you got to learn everything 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 used businesses 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost 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 money payroll tax refund all right go on sorry I just have to make sure we got that point I mean that’s a big difference a loan versus money money I like money money that’s what we’re talking about 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 original cares Act is the ERC and yes Kevin it is a lovely tough check in the mail where you get actual money from the IRS all right so let’s talk about 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 individuals on the cap table not for investors it’s for workers right you needed to have actually owned a business but it’s based on you having W-2 employees in America not 10.99. so 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 need to be on payroll for the first 6 months of 2021 on the W-2 appropriate so there were six quarters the program was open well walk us through the 6 quarters so you had quarters two three and 4 of 2020 and you had quarters one 2 and 3 of 2021. okay so that’s how it’s determined you need to be on the W-2 during that duration now let’s talk my favorite part money how much can you return per staff member that was on a W-2 in those six quarters so the computation in 2020 to be specific Kevin is 50 of the staff member’s salary to a maximum of 5 thousand dollars per staff member for the year of 2020 and in 2021 the numbers escalated to 70 of the staff member’s wage to a maximum of seven thousand per quarter how did that take place um they just changed the rules in.
2021 versus due to the fact that the turmoil 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 as much as five thousand Max and after that what occurs 21 000 Max in 2021 oh that’s how you come up with twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty 6 thousand dollars per employee that is since that’s a great deal of cash it is now there’s a caution here the PPP money would need to be decreased from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would reduce the 26 000 so what we’re seeing usually Kevin is if you took PPP money 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 employees and you took PPP money you would still get a million dollar in the mail from the internal revenue service so it’s big undoubtedly now the big question is why does nobody know about this since appearance when I initially became aware of this when I first satisfied Josh you understand I’ve got great deals of financial investments in great deals of companies I’m a major advocate for entrepreneurship in America and make many lots of financial investments in entrepreneurs of which many suffered through the pandemic when I first heard about this I called BS I don’t think it since I utilize the PPP we went through the money 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 should have and we utilized them carefully to stay alive during the pandemic so when I heard about this I said nah it can’t be true however when I dug around I even contacted us to my political leader friends Governor Senators they didn’t know about it I imply that’s how you understand that’s how misinformation is that there’s no details out there then a lot of individuals told me well you can’t get it due to the fact that you took the PPP also not true so let’s ask Josh why does nobody understand about the employee retention credit you know what’s intriguing you’re speaking about the banks Kevin because in the PPP loan process the federal government made it very 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 simply procedure procedure that’s all um and here there was mayhem since 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 initial program and when they altered 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 federal government never ever made it clear to any person about how to.
do this does your CFO understand how to do this not truly she or he’s never ever done it previously 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 company your accounting professional no your accountant’s never done this before unless you have an account that went into this business and bottom line my firm Kevin has been in business because 2009 and we have actually been working with the federal government and the state federal 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’ve done sales tax and utilize tax unemployment tax work opportunity tax credits research and development tax credits unclaimed property real estate tax all of these other government programs.
The worker 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 as much as $10,000 in earnings paid by an.
company whose business is totally or partially suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is available to all employers despite size consisting of tax exempt organizations. There are.
just two exceptions: (1) state and city governments and their instrumentalities and (2) small.
services who take Small Business Loans.
2. To certify, the employer needs to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s service is completely or partially suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are listed below 50% of the similar quarter in 2019. Once the.
employer’s gross invoices go above 80% of a comparable quarter in 2019 they no longer certify.
after completion of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the qualifying wages paid up to $10,000 in total.
It works for salaries paid after March 13th and prior to December 31, 2020.
The meaning of certifying wages varies by whether a company had, on average, basically than.
100 staff members in 2019.
Business that specialize in ERC filing help normally provide competence and assistance to help services navigate the complex procedure of claiming the credit. They can provide various services, including:.
How is the employee retention credit calculated? State Tax Treatment Of Employee Retention Credit
Eligibility Assessment: These business will evaluate your business’s eligibility for the ERC based on aspects such as your industry, earnings, and operations. If you fulfill the requirements for the credit and determine the optimum credit quantity you can claim, they can assist identify.
Documentation and Computation: ERC filing services will help in gathering the necessary documentation, such as payroll records and monetary declarations, to support your claim. They will also help calculate the credit quantity based upon eligible earnings and other qualifying expenses.
Retroactive Claim Evaluation: If you are eligible to claim the ERC for previous quarters, these companies can review your previous payroll records and financials to recognize potential opportunities for retroactive credits. They can help you change prior tax returns to claim these refunds.
Filing Assistance: Business focusing on ERC filings will prepare and send the necessary kinds 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 progressed in time. These business remain upgraded with the most recent changes and make sure that your filings abide by the most present guidelines. If the IRS requests additional information or performs an audit related to your ERC claim, they can also provide continuous support.
It is essential to research study and vet any business offering ERC filing help to ensure their credibility and competence. Search for recognized companies with experience in tax and payroll services, or think about connecting to trusted accounting firms or tax experts who provide ERC submitting support.
Bear in mind that while these companies can supply valuable help, it’s always a good concept to have a standard understanding of the ERC requirements and process yourself. This will assist you make informed choices and guarantee accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief measures. The objective of the ERC is to encourage organizations to maintain and pay their staff members throughout the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to eligible employers, consisting of for-profit businesses, tax-exempt companies, and specific governmental entities. To qualify, companies need to fulfill one of two requirements:.
The business operations were totally or partially suspended due to a government order related to COVID-19.
The business experienced a significant decrease in gross receipts. As discussed earlier, for 2021, a considerable decrease is specified as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit amount is equal to a portion (as much as 70%) of certified wages paid to employees, including specific health plan 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: Initially, companies that received a Paycheck Defense Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 allows organizations to declare the ERC even if they got a PPP loan. Nevertheless, the same salaries can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and improved, enabling eligible employers to claim the credit for qualified wages paid as far back as March 13, 2020. This retroactive arrangement supplies an opportunity for companies to modify prior-year tax returns and get refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their employment tax returns, typically Type 941. If the credit exceeds the amount of work taxes owed, the excess can be reimbursed to the company.
It is essential to keep in mind that the ERC provisions and eligibility criteria have progressed over time. The very best strategy is to consult with a tax professional or go to the official IRS site for the most up-to-date and detailed information regarding the ERC, including any current legislative changes or updates.
To qualify for the ERC, a business must fulfill one of the following requirements:.
The business operations were fully or partly suspended due to a government order related to COVID-19.
The business experienced a significant decrease in gross invoices. For 2021, a substantial decrease is defined as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decrease in gross invoices compared to the 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, but there are some exceptions. For example, government entities and companies that got a PPP loan may have limitations on declaring the credit.
The procedure for declaring the ERC involves completing the essential forms and consisting of the credit on your work income tax return (usually Type 941). The exact time it requires to process the credit can differ based on a number of factors, including the intricacy of your company and the workload of the IRS. It’s recommended to consult with a tax expert for assistance specific to your situation.
There are several companies that can help with the process of claiming the ERC. These consist of accounting firms, tax advisory services, and payroll provider. Some well-known companies that provide assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research and contact these business straight to inquire about their charges and services.
Please keep in mind that the details offered here is based upon general knowledge and might not show the most recent updates or changes to the ERC. It’s important to talk to a tax professional or go to the main internal revenue service website for the most precise and current details relating to eligibility, declaring procedures, and readily available assistance.
Less than 100. The credit is based if the employer had 100 or less employees on average in 2019.
on wages paid to all employees whether they in fact worked or not. To put it simply, 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 company had more than 100 employees on average in 2019.
permitted only for incomes paid to staff members who did not work during the calendar quarter.
In both cases, “wages” consists of not simply money payments however likewise a part of the cost of company.
provided health care. State Tax Treatment Of Employee Retention Credit
Employers can be immediately repaid for the credit by minimizing the quantity of payroll taxes they.