Lets talk first about What Is True About The Employee Retention Credit And The Paycheck Protection Program Loan :
Our group here what do these men doing everyone in this room is helping teach people about ERC and uh always provide a gorgeous breakfast and have people truly learn about the program we ought to head to the room where we have the ability to display a few of the checks that we are getting for companies and I ‘d like to see that what is this this is uh hundreds of countless dollars literally Kevin hundreds of millions of dollars so these are duplicate copies of the letters that go to customers verifying that the check is on the method I mean you know if you simply begin to look at some of these here I imply this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s just I indicate think about 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 understand when you
receive this you know the check is gone for sure and that’s when they pay so they do not pay anything up until they in fact get the cash they do not pay bottom line Wonder trust anything up until this letter is verified the check is on the method they deposit it into their bank account and they can really rely on Wonder trust that the process has been finished and how many you think you have actually processed since 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 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 important today the employee retention credit which the majority of you have never heard of I definitely hadn’t become aware of it until extremely just recently and found out a lot about it since this is most likely the most affordable 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 Principles they’re the largest processor of these ERC credits this is a 170 page program so it’s not easy this isn’t like PPP we just phone your bank supervisor and say give me a loan it doesn’t 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 spokesperson for this I love this program it’s going away soon you got to learn all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply begin there so during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act provided services 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone it makes a big distinction right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the cash money payroll tax refund all right go on sorry I simply need to ensure we got that point I suggest that’s a huge difference a loan versus money money I like money money that’s what we’re discussing okay 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 difficult check in the mail where you get real cash from the internal revenue service all right so let’s talk about how it works since it sounds like to me if it’s a if it’s staff member retention credit that person needed to be an employee so I’m going to make the Assumption this cash 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 business however it’s based upon you having W-2 staff members 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 have to be on payroll for the very first 6 months of 2021 on the W-2 appropriate so there were 6 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. all right so that’s how it’s measured 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 worker that was on a W-2 in those 6 quarters so the calculation in 2020 to be precise Kevin is 50 of the staff member’s income 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 salary to an optimum of 7 thousand per quarter how did that occur um they simply changed the rules in.
2021 versus due to the fact that the chaos 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 approximately five thousand Max and then what happens 21 000 Max in 2021 oh that’s how you come up with twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per worker that is since that’s a great deal of cash it is now there’s a caveat here the PPP cash would have to be decreased from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would lower the 26 000 so what we’re seeing on average Kevin is if you took PPP cash somewhere around ten thousand dollars a person so let’s say hypothetically you owned a restaurant in New York 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 IRS so it’s huge certainly now the huge concern is why does nobody know about this due to the fact that look when I initially found out about this when I initially met Josh you understand I’ve got lots of financial investments in great deals of companies I’m a significant advocate for entrepreneurship in America and make many many investments in entrepreneurs of which many suffered through the pandemic when I initially heard about this I called BS I don’t believe it because 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 throughout the pandemic so when I found out about this I said nah it can’t be true however when I dug around I even contacted us to my politician buddies Governor Senators they didn’t understand about it I suggest that’s how you understand that’s how false information is that there’s no information out there then a lot of people told me well you can’t get it because you took the PPP likewise not real so let’s ask Josh why does no one understand about the staff member retention credit you understand what’s intriguing you’re discussing the banks Kevin due to the fact that in the PPP loan process the federal government made it really 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 simply procedure process that’s all um and here there was chaos since remember in the initial cares act you could refrain from doing both programs so if you had actually done PPP you might refrain from doing ERC in the original 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 anyone about how to.
do this does your CFO understand how to do this not actually he or she’s never ever done it previously do the banks do it nope the banks don’t do it the payroll companies yeah some of them are doing it as a payroll business 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 stayed 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 business so a great deal of our big huge business clients have 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 real estate tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit created to motivate.
companies to keep staff members on their payroll. The credit is 50% of approximately $10,000 in earnings paid by an.
company whose business is totally or partially suspended because of COVID-19 or whose gross invoices.
decrease by more than 50%.
1. The credit is offered to all employers despite size consisting of tax exempt companies. 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 company has to fulfill one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s service is totally or partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the company’s gross receipts are listed below 50% of the comparable quarter in 2019. As soon as the.
company’s gross receipts go above 80% of a similar 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 certifying earnings paid up to $10,000 in total.
It works for wages paid after March 13th and before December 31, 2020.
The meaning of qualifying incomes differs by whether a company had, usually, more or less than.
100 employees in 2019.
Companies that focus on ERC filing support usually supply competence and support to help organizations navigate the complicated procedure of declaring the credit. They can offer various services, consisting of:.
How is the employee retention credit calculated? What Is True About The Employee Retention Credit And The Paycheck Protection Program Loan
Eligibility Evaluation: These business will examine your company’s eligibility for the ERC based on aspects such as your market, revenue, and operations. If you fulfill the requirements for the credit and recognize the maximum credit quantity you can claim, they can help identify.
Paperwork and Computation: ERC filing services will help in collecting the necessary documents, such as payroll records and financial declarations, to support your claim. They will likewise assist compute the credit quantity based upon eligible earnings and other certifying costs.
Retroactive Claim Review: If you are eligible to claim the ERC for previous quarters, these companies can review your previous payroll records and financials to identify possible opportunities for retroactive credits. They can help you amend previous income tax return to claim these refunds.
Filing Support: Business focusing on ERC filings will prepare and submit the essential types and documents on your behalf. This includes completing Form 941 or any other required tax forms.
Compliance and Updates: ERC policies and guidance have progressed over time. These business stay upgraded with the latest changes and ensure that your filings adhere to the most current guidelines. If the Internal revenue service requests additional details or performs an audit related to your ERC claim, they can also supply ongoing support.
It is necessary to research and veterinarian any company offering ERC filing support to guarantee their trustworthiness and know-how. Look for established firms with experience in tax and payroll services, or consider connecting to trusted accounting companies or tax experts who provide ERC filing assistance.
Bear in mind that while these business can supply 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 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 goal of the ERC is to motivate companies to keep and pay their workers 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, including for-profit organizations, tax-exempt companies, and specific governmental entities. To qualify, employers must meet one of two criteria:.
Business operations were fully or partially suspended due to a federal government order related to COVID-19.
The business experienced a substantial decrease in gross invoices. As pointed out previously, for 2021, a considerable decrease is specified as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decline 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 employer’s share of Social Security taxes. The credit quantity amounts to a percentage (approximately 70%) of certified salaries paid to workers, including specific health insurance expenditures. The optimum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, organizations that got a Paycheck Security Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 enables companies to claim the ERC even if they received a PPP loan. However, the very same incomes can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively broadened and boosted, permitting qualified companies to claim the credit for certified wages paid as far back as March 13, 2020. This retroactive arrangement provides a chance for services to change prior-year tax returns and get refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their employment income tax return, usually Form 941. The excess can be reimbursed to the company if the credit exceeds the quantity of employment taxes owed.
It is essential to note that the ERC arrangements and eligibility criteria have actually progressed over time. The very best strategy is to speak with a tax professional or visit the official internal revenue service website for the most current and detailed info relating to the ERC, consisting of any current legal modifications or updates.
To get approved for the ERC, an organization must satisfy among the following requirements:.
Business operations were completely or partly suspended due to a federal government order related to COVID-19.
The business experienced a substantial decline in gross receipts. For 2021, a considerable decrease is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decline in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross invoices compared to the immediately preceding quarter.
The ERC is offered to organizations of all sizes, including tax-exempt organizations, however there are some exceptions. For instance, federal government entities and services that received a PPP loan might have limitations on claiming the credit.
The procedure for claiming the ERC involves completing the necessary forms and consisting of the credit on your work income tax return (normally Form 941). The exact time it takes to process the credit can differ based on numerous aspects, including the intricacy of your service and the workload of the internal revenue service. It’s suggested to seek advice from a tax professional for guidance specific to your scenario.
There are numerous business that can help with the procedure of claiming the ERC. These include accounting companies, tax advisory services, and payroll service providers. Some widely known business that use support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research study and call these business straight to inquire about their services and costs.
Please keep in mind that the details provided here is based upon general knowledge and may not show the most current updates or modifications to the ERC. It is very important to consult with a tax professional or check out the main IRS site for the most updated and precise information relating to eligibility, claiming procedures, and offered support.
Less than 100. The credit is based if the company had 100 or less employees on average in 2019.
on wages paid to all workers whether they actually worked or not. To put it simply, even if the.
workers worked full time and got paid for full-time work, the employer still gets the credit.
Greater than 100. If the employer had more than 100 staff members on average in 2019, then the credit is.
permitted just for wages paid to staff members who did not work during the calendar quarter.
In both cases, “incomes” consists of not simply cash payments but likewise a portion of the cost of company.
offered healthcare. What Is True About The Employee Retention Credit And The Paycheck Protection Program Loan
Employers can be right away reimbursed for the credit by lowering the amount of payroll taxes they.