Lets talk first about What Is The Employee Retention Credit Under The Cares Act :
Our group here what do these people doing everybody in this room is assisting teach individuals about ERC and uh constantly supply a gorgeous breakfast and have people really learn about the program we ought to head to the space where we have the ability to display a few of the checks that we are getting for business and I ‘d like 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 clients confirming that the check is on the way I mean you know if you simply begin to take a look at a few 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 simply I mean consider the number of real clients that went through the program yeah this is the very end this is the party at the end when the check is validated the numbers are confirmed 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 gone for sure and that’s when they pay so they do not pay anything up until they really receive the cash they don’t pay bottom line Wonder trust anything till this letter is verified the check is on the method they transfer it into their savings account and they can truly rely on Wonder trust that the procedure has been ended up and the number of you think you have actually processed because you started this we have to do with 35 000 of these for
about six billion dollars wow so clearly they know what they’re doing and that’s what you require you need 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 crucial today the staff member retention credit which most of you have never become aware of I certainly had not heard of it up until really just recently and discovered a lot about it since this is most likely the lowest cost of capital for any small business anywhere
anytime if you have employees between five and five hundred so I have actually got the expert with me this is Josh Fox he’s the creator and CEO of bottom line Principles they’re the biggest processor of these ERC credits this is a 170 page program so it’s hard this isn’t like PPP we simply call your bank manager and state give 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 have actually become yes the Ambassador and paid spokesperson for this I like this program it’s going away soon you got to learn all about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply begin there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act used organizations 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 difference right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the money money payroll tax refund all right go on sorry I just need to ensure we got that point I suggest that’s a huge difference a loan versus money cash I like cash cash that’s what we’re discussing fine 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 lovely hard check in the mail where you get actual money from the IRS all right so let’s discuss how it works since it sounds like to me if it’s a if it’s worker retention credit that individual needed to be a staff member so I’m going to make the Presumption this money is not for the owner not for people on the cap table not for investors it’s for staff members right you had to have actually owned a company however it’s based on you having W-2 workers 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 correct so there were six quarters the program was open well walk us through the 6 quarters so you had quarters two three and four of 2020 and you had quarters one two and 3 of 2021. all right so that’s how it’s measured you need to be on the W-2 throughout that period now let’s talk my favorite part money how much can you return per staff member that was on a W-2 in those 6 quarters so the calculation in 2020 to be exact Kevin is 50 of the staff member’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 wage to a maximum of seven thousand per quarter how did that occur um they just changed the rules in.
2021 versus because 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 approximately 5 thousand Max and after that what happens 21 000 Max in 2021 oh that’s how you come up with twenty 6 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 cash it is now there’s a caveat here the PPP cash would need to be minimized from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would minimize the 26 000 so what we’re seeing typically Kevin is if you took PPP money someplace around 10 thousand dollars an individual 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 big clearly now the huge concern is why does no one understand about this because appearance when I first became aware of this when I first fulfilled Josh you know I have actually got lots of financial investments in lots of business I’m a major advocate for entrepreneurship in America and make lots of lots of investments in entrepreneurs of which lots of suffered through the pandemic when I first heard about this I called BS I do not believe it because I use 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 been worthy of and we used them sensibly to stay alive during the pandemic so when I became aware of this I stated nah it can’t be true but when I dug around I even contacted us to my political leader buddies Guv Senators they didn’t know about it I mean that’s how you understand that’s how misinformation is that there’s no information out there then a bunch of individuals informed me well you can’t get it because you took the PPP also not real so let’s ask Josh why does no one learn about the employee retention credit you understand what’s fascinating you’re speaking about the banks Kevin since in the PPP loan process the federal government made it extremely 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 procedure 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 remember in the original cares act you could not do both programs so if you had actually done PPP you could not do ERC in the original 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 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 done it in the past 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 accountant no your accounting professional’s never done this before unless you have an account that went into this service and bottom line my firm Kevin has actually stayed in business since 2009 and we’ve been dealing with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 companies 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 worker retention tax credit is a broad based refundable tax credit developed to encourage.
employers to keep workers on their payroll. The credit is 50% of up to $10,000 in salaries paid by an.
employer whose service is fully or partly suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
1. The credit is available to all employers no matter size consisting of tax exempt organizations. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) little.
services who take Small company Loans.
2. To qualify, the employer has to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s business is completely or partly 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 similar quarter in 2019. As soon as the.
company’s gross receipts exceed 80% of an equivalent quarter in 2019 they no longer qualify.
after the end of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the certifying salaries paid up to $10,000 in overall.
It works for incomes paid after March 13th and before December 31, 2020.
The meaning of qualifying wages differs by whether an employer had, on average, basically than.
100 staff members in 2019.
Companies that concentrate on ERC filing assistance generally offer knowledge and assistance to assist businesses navigate the complicated process of claiming the credit. They can provide different services, consisting of:.
How is the employee retention credit calculated? What Is The Employee Retention Credit Under The Cares Act
Eligibility Assessment: These business will evaluate your organization’s eligibility for the ERC based upon aspects such as your industry, revenue, and operations. They can help identify if you fulfill the requirements for the credit and identify the maximum credit amount you can declare.
Documents and Computation: ERC filing services will help in gathering the required paperwork, such as payroll records and financial declarations, to support your claim. They will also assist compute the credit quantity based upon qualified salaries and other qualifying costs.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for prior quarters, these business can evaluate your previous payroll records and financials to identify potential chances for retroactive credits. They can help you change prior income tax return to claim these refunds.
Filing Support: Business specializing in ERC filings will prepare and send the necessary forms and paperwork in your place. This consists of completing Kind 941 or any other necessary tax forms.
Compliance and Updates: ERC regulations and guidance have evolved with time. These business remain updated with the current modifications and ensure that your filings comply with the most current standards. They can likewise provide continuous assistance if the IRS requests additional information or performs an audit related to your ERC claim.
It is necessary to research study and veterinarian any business providing ERC filing assistance to guarantee their credibility and proficiency. Look for established firms with experience in tax and payroll services, or think about connecting to trusted accounting companies or tax specialists who offer ERC filing support.
Keep in mind that while these business can provide valuable support, it’s always a great concept to have a fundamental understanding of the ERC requirements and process yourself. This will assist you make informed decisions and ensure accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief steps. The goal of the ERC is to encourage organizations to retain 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 readily available to qualified employers, consisting of for-profit businesses, tax-exempt organizations, and particular governmental entities. To certify, companies should meet one of two criteria:.
The business operations were totally or partly suspended due to a federal government order related to COVID-19.
The business experienced a substantial decrease in gross receipts. As mentioned previously, for 2021, a significant decline is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decline in gross invoices compared to the 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 quantity is equal to a portion (approximately 70%) of qualified salaries paid to employees, including particular health plan 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: At first, companies that got a Paycheck Security Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 allows businesses to declare the ERC even if they received a PPP loan. However, the very same earnings can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively broadened and boosted, allowing qualified companies to claim the credit for qualified wages paid as far back as March 13, 2020. This retroactive arrangement supplies an opportunity for services to change prior-year tax returns and get refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their work tax returns, typically Form 941. If the credit goes beyond the amount of employment taxes owed, the excess can be reimbursed to the employer.
It’s important to keep in mind that the ERC provisions and eligibility criteria have evolved gradually. The very best course of action is to talk to a tax expert or check out the official internal revenue service website for the most updated and detailed info regarding the ERC, including any current legislative modifications or updates.
To receive the ERC, a company must meet one of the following requirements:.
The business operations were totally or partly suspended due to a federal government order related to COVID-19.
Business experienced a substantial decline in gross receipts. For 2021, a substantial decline is defined as a 20% decrease in gross invoices 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 very same quarter in 2019, or a 20% decline in gross invoices compared to the instantly preceding quarter.
The ERC is offered to businesses of all sizes, including tax-exempt organizations, however there are some exceptions. Government entities and companies that received a PPP loan may have restrictions on claiming the credit.
The process for claiming the ERC involves finishing the essential forms and including the credit on your work income tax return (usually Form 941). The exact time it takes to process the credit can differ based upon a number of aspects, including the intricacy of your company and the workload of the IRS. It’s advised to talk to a tax expert for guidance specific to your circumstance.
There are several companies that can help with the procedure of claiming the ERC. These consist of accounting companies, tax advisory services, and payroll company. Some well-known business that provide assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research and get in touch with these companies directly to inquire about their services and fees.
Please note that the details supplied here is based on basic understanding and may not show the most current updates or changes to the ERC. It is essential to seek advice from a tax expert or visit the main internal revenue service site for the most up-to-date and precise details relating to eligibility, declaring treatments, and available support.
Less than 100. If the company had 100 or less workers usually in 2019, then the credit is based.
on incomes paid to all staff members whether they actually worked or not. Simply put, 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 employer had more than 100 staff members on average in 2019.
allowed just for incomes paid to employees who did not work throughout the calendar quarter.
In both cases, “salaries” consists of not simply cash payments but likewise a part of the cost of employer.
provided health care. What Is The Employee Retention Credit Under The Cares Act
Employers can be immediately compensated for the credit by reducing the amount of payroll taxes they.