Lets talk first about Aicpa Employee Retention Credit Engagement Letter :
Our team here what do these men doing everyone in this room is assisting teach individuals about ERC and uh always provide a stunning breakfast and have people truly learn more about the program we ought to head to the room where we have the ability to display some of the checks that we are getting for business and I wish to see that what is this this is uh numerous millions of dollars actually Kevin numerous countless dollars so these are replicate copies of the letters that go to clients confirming that the check is on the method I suggest you know if you simply begin to 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 mean it’s just I imply consider how many actual customers that went through the program yeah this is the very end this is the celebration at the end when the check is validated the numbers are validated and the check is on the mail in the mail from the internal revenue service heading to the client so that’s how you’re able to track it you know when you
get 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 money they do not pay bottom line Wonder trust anything till this letter is validated the check is on the method they deposit it into their bank account and they can really trust Wonder trust that the procedure has actually been ended up and how many you think you have actually processed considering that you began this we’re about 35 000 of these for
about 6 billion dollars wow so plainly 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 speaking about something really essential today the worker retention credit which most of you have actually never ever heard of I certainly hadn’t become aware of it until very recently and learned a lot about it because this is probably the most affordable expense of capital for any small company anywhere
anytime if you have employees between five and five hundred so I have actually got the specialist with me this is Josh Fox he’s the creator and CEO of bottom line Concepts 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 just call up your bank manager and say offer me a loan it does not work there’s not a loan it’s an application and Josh is going to inform 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 enjoy this program it’s disappearing soon you got to discover everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just start there so during the Trump Administration when President Trump was enacted they created the cares Act and the cares act used services 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everybody it makes a big difference 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 okay go on sorry I just have to ensure we got that point I mean that’s a big distinction a loan versus cash 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 original cares Act is the ERC and yes Kevin it is a beautiful difficult check in the mail where you get real cash from the IRS all right so let’s discuss how it works since it seems like to me if it’s a if it’s staff member retention credit that person had to be an employee so I’m going to make the Presumption this money is not for the owner not for people on the cap table not for shareholders it’s for staff members right you needed to have owned a service however it’s based upon you having W-2 staff members in America not 10.99. 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 first six months of 2021 on the W-2 correct so there were 6 quarters the program was open well walk us through the 6 quarters so you had quarters two 3 and 4 of 2020 and you had quarters one 2 and three of 2021. okay so that’s how it’s determined you have to be on the W-2 throughout that period now let’s talk my favorite part cash just how much can you return per staff member that was on a W-2 in those 6 quarters so the estimation in 2020 to be specific Kevin is 50 of the staff member’s income to an optimum 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 income to a maximum of seven thousand per quarter how did that happen um they just altered the rules in.
2021 versus since the mayhem 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 as much as 5 thousand Max and then 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 six thousand dollars per employee that is because that’s a lot of money it is now there’s a caveat here the PPP cash would need to be decreased from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would reduce the 26 000 so what we’re seeing usually Kevin is if you took PPP cash someplace around 10 thousand dollars a person so let’s state hypothetically you owned a dining establishment in New york city City where I’m from and you had a hundred workers and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s huge obviously now the big concern is why does no one learn about this due to the fact that appearance when I initially heard about this when I initially satisfied Josh you understand I have actually got lots of financial investments in great deals of companies I’m a major supporter for entrepreneurship in America and make lots of many investments in entrepreneurs of which lots of suffered through the pandemic when I initially found out about this I called BS I don’t believe it since I utilize the PPP we went through the cash center Banks to get it it was very easy to do we had our CEOs call the banks they got their loans and that were well deserved and we utilized them sensibly to stay alive during the pandemic so when I found out about this I stated nah it can’t be true but when I dug around I even contacted us to my political leader friends Guv Senators they didn’t learn about it I imply that’s how you know that’s how false information is that there’s no information out there then a bunch of people informed me well you can’t get it since you took the PPP likewise not real so let’s ask Josh why does nobody know about the employee retention credit you know what’s intriguing you’re speaking about the banks Kevin because in the PPP loan procedure 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 huge banks in our nation 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 mayhem because remember in the original cares act you might not do both programs so if you had actually done PPP you might refrain from doing ERC in the initial program and when they altered the law in 2021 the banks were refraining from doing ERC due to the fact that it’s not alone so you’re getting a tax refund so the government never made it clear to anyone about how to.
do this does your CFO understand how to do this not really 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 business your accounting professional no your accountant’s never ever done this prior to unless you have an account that went into this service and bottom line my company Kevin has actually been in business because 2009 and we have actually been working with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 companies so a lot of our huge huge corporate clients have worked with bottom line to recuperate other federal government programs we’ve done sales tax and utilize tax unemployment tax work chance tax credits research and development tax credits unclaimed property real estate tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit developed to motivate.
employers to keep staff members on their payroll. The credit is 50% of as much as $10,000 in wages paid by an.
Due to the fact that of COVID-19 or whose gross receipts, company whose organization is totally or partly suspended.
decrease by more than 50%.
1. The credit is offered to all companies no matter size including tax exempt organizations. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) small.
organizations who take Small Business Loans.
2. To certify, the company has to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s organization is completely or partly suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross invoices are listed below 50% of the equivalent quarter in 2019. Once the.
employer’s gross invoices exceed 80% of a similar quarter in 2019 they no longer qualify.
after completion of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the certifying wages paid up to $10,000 in total.
It is effective for salaries paid after March 13th and prior to December 31, 2020.
The definition of qualifying wages differs by whether an employer had, usually, more or less than.
100 employees in 2019.
Business that specialize in ERC filing assistance normally supply competence and support to help companies browse the intricate procedure of claiming the credit. They can offer different services, consisting of:.
How is the employee retention credit calculated? Aicpa Employee Retention Credit Engagement Letter
Eligibility Assessment: These companies will evaluate your organization’s eligibility for the ERC based on elements such as your market, income, and operations. They can help determine if you meet the requirements for the credit and determine the maximum credit quantity you can declare.
Documentation and Calculation: ERC filing services will help in collecting the needed documents, such as payroll records and monetary declarations, to support your claim. They will also help calculate the credit quantity based on eligible earnings and other qualifying expenses.
Retroactive Claim Evaluation: If you are eligible to claim the ERC for prior quarters, these business can evaluate your past payroll records and financials to determine possible opportunities for retroactive credits. They can help you change prior income tax return to claim these refunds.
Filing Support: Companies concentrating on ERC filings will prepare and send the needed forms and paperwork in your place. This includes finishing Kind 941 or any other required tax forms.
Compliance and Updates: ERC guidelines and guidance have actually progressed in time. These companies stay updated with the current modifications and guarantee that your filings abide by the most current guidelines. If the Internal revenue service requests extra information or carries out an audit associated to your ERC claim, they can also offer continuous support.
It is essential to research and veterinarian any company offering ERC filing help to guarantee their reliability and knowledge. Try to find recognized firms with experience in tax and payroll services, or consider connecting to trusted accounting firms or tax specialists who use ERC submitting support.
Bear in mind that while these business can offer important assistance, it’s constantly an excellent idea to have a standard understanding of the ERC requirements and procedure yourself. This will help you make informed choices and ensure precise filings.
The Worker Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief steps. The objective of the ERC is to encourage companies to keep and pay their workers throughout the pandemic, even if their operations have been affected.
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 specific governmental entities. To certify, companies should meet one of two criteria:.
The business operations were totally or partially suspended due to a government order related to COVID-19.
The business experienced a considerable decrease in gross receipts. As discussed previously, for 2021, a considerable decline is defined as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decline in gross invoices compared to the immediately 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 qualified wages paid to workers, including particular health insurance 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: At first, businesses that got a Paycheck Security Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 allows companies to declare the ERC even if they received a PPP loan. The same salaries can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and enhanced, enabling eligible companies to claim the credit for certified earnings paid as far back as March 13, 2020. This retroactive provision offers a chance for organizations to amend prior-year tax returns and get refunds.
Declaring the Credit: Employers can declare the ERC by reporting it on their employment tax returns, typically Form 941. The excess can be refunded to the employer if the credit surpasses the amount of work taxes owed.
It is essential to note that the ERC provisions and eligibility criteria have actually progressed in time. The very best strategy is to seek advice from a tax expert or visit the official IRS website for the most updated and comprehensive information concerning the ERC, including any recent legislative changes or updates.
To receive the ERC, a business should meet one of the following criteria:.
The business operations were completely or partially suspended due to a government order related to COVID-19.
Business experienced a significant decrease in gross invoices. For 2021, a substantial decrease is specified 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% decline in gross receipts compared to the instantly preceding quarter.
The ERC is available to companies of all sizes, including tax-exempt organizations, however there are some exceptions. Government entities and companies that got a PPP loan might have restrictions on declaring the credit.
The procedure for declaring the ERC involves finishing the essential types and consisting of the credit on your employment income tax return (usually Kind 941). The exact time it takes to process the credit can vary based upon several aspects, including the intricacy of your service and the workload of the internal revenue service. It’s suggested to speak with a tax expert for guidance particular to your circumstance.
There are several companies that can help with the procedure of declaring the ERC. These include accounting companies, tax advisory services, and payroll company. Some popular companies that use assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research and get in touch with these companies straight to inquire about their fees and services.
Please keep in mind that the details offered here is based upon general understanding and might not show the most current updates or modifications to the ERC. It’s important to speak with a tax professional or check out the main internal revenue service site for the most precise and updated details regarding eligibility, declaring treatments, and available assistance.
Less than 100. If the company had 100 or less workers typically in 2019, then the credit is based.
on wages paid to all staff members whether they actually worked or not. Simply put, even if the.
staff members worked full time and got paid for full-time work, the company still gets the credit.
Greater than 100. The credit is if the employer had more than 100 employees on average in 2019.
enabled only for salaries paid to workers who did not work throughout the calendar quarter.
In both cases, “incomes” includes not simply cash payments but also a part of the cost of employer.
supplied healthcare. Aicpa Employee Retention Credit Engagement Letter
Employers can be right away repaid for the credit by decreasing the amount of payroll taxes they.