Lets talk first about Tax Treatment Employee Retention Credit :
Our group here what do these guys doing everybody in this space is helping teach individuals about ERC and uh always provide a beautiful breakfast and have individuals actually find out about the program we should head to the room where we are able to display some of the checks that we are getting for business and I want to see that what is this this is uh hundreds of countless dollars literally Kevin numerous countless dollars so these are duplicate copies of the letters that go to clients validating that the check is on the method I mean you know if you just 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 celebration at the end when the check is confirmed the numbers are verified 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 understand when you
receive this you understand the check is chosen sure which’s when they pay so they do not pay anything up until they really get the money they do not pay bottom line Wonder trust anything up until this letter is validated the check is on the way they transfer it into their bank account and they can really rely on Wonder trust that the procedure has actually been ended up and how many you believe you have actually processed because you began 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 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 Wonderful 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 heard of I certainly had not heard of it until very just recently and discovered a lot about it since this is most likely the lowest cost of capital for any small company anywhere
anytime if you have workers between five and five hundred so I have actually got the professional with me this is Josh Fox he’s the creator and CEO of bottom line Ideas they’re the largest processor of these ERC credits this is a 170 page program so it’s challenging this isn’t like PPP we just call your bank supervisor and say provide 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 have actually ended up being yes the Ambassador and paid spokesperson for this I like this program it’s going away soon you got to discover everything about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply begin there so throughout the Trump Administration when President Trump was enacted they developed the cares Act and the cares act used 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 precisely so the ERC is a refund that’s.
correct the money money payroll tax refund fine go on sorry I just need to make sure we got that point I imply that’s a huge difference a loan versus cash money I like money money that’s what we’re speaking about 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 gorgeous difficult check in the mail where you get real cash from the IRS all right so let’s speak about how it works because 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 shareholders it’s for workers right you had to have actually owned an organization however it’s based on you having W-2 workers 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 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 right so there were 6 quarters the program was open well walk 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. okay so that’s how it’s measured you need to be on the W-2 throughout that duration now let’s talk my preferred part cash how much can you return per worker that was on a W-2 in those six quarters so the computation in 2020 to be exact Kevin is 50 of the employee’s wage to a maximum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers escalated to 70 of the staff member’s income to a maximum of 7 thousand per quarter how did that occur um they simply altered the rules in.
2021 versus since the chaos 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 5 thousand Max and then what occurs 21 000 Max in 2021 oh that’s how you develop twenty 6 thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty 6 thousand dollars per employee that is because that’s a lot of cash it is now there’s a caveat here the PPP money 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 usually Kevin is if you took PPP money someplace around ten thousand dollars an individual so let’s say hypothetically you owned a dining establishment 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 internal revenue service so it’s huge clearly now the huge question is why does nobody learn about this since appearance when I first became aware of this when I first satisfied Josh you understand I have actually got lots of financial investments in lots of business I’m a significant supporter for entrepreneurship in America and make many many 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 utilize the PPP we went through the cash center Banks to get it it was really easy to do we had our CEOs call the banks they got their loans which were well deserved and we used them carefully to survive throughout the pandemic so when I became aware of this I said nah it can’t hold true but when I dug around I even called to my politician buddies Governor Senators they didn’t learn about it I indicate that’s how you understand that’s how false information is that there’s no details out there then a lot of individuals informed me well you can’t get it since you took the PPP also not real so let’s ask Josh why does no one know about the employee retention credit you understand what’s interesting you’re speaking about the banks Kevin due to the fact that in the PPP loan process the federal government made it very clear that if you desired a PPP loan you would call Wells Fargo Citibank Bank of America any of the big 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 mayhem since remember in the initial cares act you could refrain from doing both programs so if you had 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 since it’s not alone so you’re getting a tax refund so the federal government never made it clear to any person about how to.
do this does your CFO know how to do this not truly he or she’s never done it in the past 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 company your accountant no your accounting professional’s never done this before unless you have an account that went into this organization and bottom line my company Kevin has actually been in business since 2009 and we’ve been dealing 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 business clients have dealt with bottom line to recover other government programs we have actually done sales tax and utilize tax unemployment tax work opportunity 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 developed to motivate.
employers to keep employees on their payroll. The credit is 50% of as much as $10,000 in incomes paid by an.
company whose service is totally or partly suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
1. The credit is offered to all companies despite size including tax exempt companies. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) little.
organizations who take Small company Loans.
2. To certify, the employer has to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s business is completely or partially suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross receipts are below 50% of the equivalent quarter in 2019. When the.
company’s gross invoices exceed 80% of an equivalent quarter in 2019 they no longer qualify.
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 total.
It is effective for wages paid after March 13th and before December 31, 2020.
The meaning of certifying earnings varies by whether an employer had, typically, more or less than.
100 employees in 2019.
Business that concentrate on ERC filing support normally offer expertise and assistance to assist businesses navigate the complex procedure of declaring the credit. They can use numerous services, consisting of:.
How is the employee retention credit calculated? Tax Treatment Employee Retention Credit
Eligibility Evaluation: These companies will evaluate your business’s eligibility for the ERC based upon elements such as your market, income, and operations. They can assist determine if you meet the requirements for the credit and recognize the maximum credit amount you can claim.
Paperwork and Calculation: ERC filing services will assist in collecting the necessary paperwork, such as payroll records and financial statements, to support your claim. They will likewise assist compute the credit quantity based upon qualified earnings and other qualifying expenditures.
Retroactive Claim Review: If you are qualified to claim the ERC for previous quarters, these companies can examine your previous payroll records and financials to determine prospective chances for retroactive credits. They can assist you change prior income tax return to declare these refunds.
Filing Assistance: Companies specializing in ERC filings will prepare and send the required kinds and documentation on your behalf. This includes finishing Kind 941 or any other required tax forms.
Compliance and Updates: ERC guidelines and assistance have actually developed over time. These business stay updated with the latest modifications and ensure that your filings abide by the most present standards. They can also provide ongoing assistance if the IRS demands additional details or performs an audit related to your ERC claim.
It’s important to research and veterinarian any company using ERC filing support to guarantee their credibility and expertise. Look for recognized companies with experience in tax and payroll services, or consider reaching out to relied on accounting companies or tax experts who offer ERC filing assistance.
Remember that while these companies can offer important help, it’s always a great idea to have a standard understanding of the ERC requirements and procedure yourself. This will assist you make notified choices and make sure precise filings.
The Worker Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief procedures. The objective of the ERC is to encourage organizations to retain and pay their workers throughout the pandemic, even if their operations have been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is available to qualified employers, consisting of for-profit companies, tax-exempt organizations, and certain governmental entities. To certify, employers need to satisfy one of two criteria:.
Business operations were completely or partially suspended due to a federal government order related to COVID-19.
The business experienced a considerable decline in gross receipts. As discussed earlier, for 2021, a considerable decrease is specified as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decrease in gross receipts compared to the 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 amount is equal to a portion (approximately 70%) of certified incomes paid to employees, consisting of particular health plan costs. The maximum 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 a Paycheck Security Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 enables companies to declare the ERC even if they got a PPP loan. The exact same wages can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively broadened and improved, enabling eligible employers to declare the credit for certified incomes paid as far back as March 13, 2020. This retroactive provision provides a chance for businesses to change prior-year tax returns and receive refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their employment tax returns, generally Form 941. The excess can be reimbursed to the company if the credit goes beyond the quantity of employment taxes owed.
It is essential to note that the ERC provisions and eligibility criteria have evolved with time. The very best course of action is to seek advice from a tax expert or visit the official IRS site for the most current and comprehensive information relating to the ERC, including any current legislative modifications or updates.
To qualify for the ERC, an organization needs to meet one of the following requirements:.
Business operations were completely or partially suspended due to a government order related to COVID-19.
The business experienced a substantial decrease in gross invoices. For 2021, a significant decline is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a substantial decline is specified as a 20% decline in gross receipts compared to the exact same quarter in 2019, or a 20% decrease in gross receipts compared to the immediately preceding quarter.
The ERC is readily available to companies of all sizes, including tax-exempt organizations, but there are some exceptions. Government entities and businesses that got a PPP loan might have limitations on claiming the credit.
The procedure for declaring the ERC includes finishing the essential types and consisting of the credit on your employment tax return (generally Kind 941). The exact time it requires to process the credit can differ based on several aspects, including the complexity of your company and the work of the IRS. It’s recommended to talk to a tax professional for guidance particular to your scenario.
There are numerous companies that can assist with the procedure of claiming the ERC. These consist of accounting firms, tax advisory services, and payroll company. Some popular business that offer support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research study and get in touch with these business directly to inquire about their services and charges.
Please note that the info offered here is based upon basic understanding and may not reflect the most current updates or modifications to the ERC. It is necessary to speak with a tax professional or check out the main internal revenue service website for the most accurate and updated details relating to eligibility, declaring treatments, and readily available assistance.
Less than 100. If the company had 100 or less workers usually in 2019, then the credit is based.
on earnings paid to all staff members whether they really worked or not. In other words, even if the.
workers worked full time and got paid for full time work, the company still gets the credit.
Greater than 100. If the employer had more than 100 employees usually in 2019, then the credit is.
allowed just for salaries paid to employees who did not work during the calendar quarter.
In both cases, “earnings” includes not just cash payments but also a part of the expense of employer.
provided healthcare. Tax Treatment Employee Retention Credit
Employers can be right away compensated for the credit by reducing the amount of payroll taxes they.