Lets talk first about Asc 958-605 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 gorgeous breakfast and have people really learn about the program we should head to the room where we have the ability to display some of the checks that we are getting for companies and I ‘d like to see that what is this this is uh numerous millions of dollars literally Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to customers confirming that the check is on the way I indicate you understand if you simply begin to take a look at a few of these here I mean this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I imply it’s simply I indicate think of how many real clients 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 IRS heading to the customer so that’s how you’re able to track it you understand when you
get this you know the check is opted for sure which’s when they pay so they don’t pay anything till they really get the money they don’t pay bottom line Wonder trust anything till this letter is confirmed the check is on the method they transfer it into their bank account and they can really rely on Wonder trust that the procedure has been completed and how many you think you have actually processed considering that you started this we’re about 35 000 of these for
about six billion dollars wow so plainly they understand what they’re doing and that’s what you require you require 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 Terrific here you’re at my YouTube channel we’re talking about something really crucial today the employee retention credit which most of you have actually never ever heard of I definitely had not heard of it until really recently and discovered a lot about it due to the fact that this is probably the lowest expense of capital for any small company anywhere
anytime if you have employees 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 not easy this isn’t like PPP we simply phone your bank supervisor and say offer me a loan it does not 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 become yes the Ambassador and paid spokesperson for this I enjoy this program it’s going away very soon you got to learn all 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 developed the cares Act and the cares act provided companies three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody it makes a big distinction right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the cash cash payroll tax refund fine go on sorry I simply have to make certain we got that point I imply that’s a big difference a loan versus money money I like cash money 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 gorgeous hard check in the mail where you get actual 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 a worker 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 company 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 have to be on payroll for the first 6 months of 2021 on the W-2 correct so there were six quarters the program was open well stroll us through the 6 quarters so you had quarters 2 three and four of 2020 and you had quarters one 2 and three of 2021. alright 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 just how much can you return per worker 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 a maximum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers escalated to 70 of the worker’s salary to an optimum of seven thousand per quarter how did that occur 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 staff members 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 takes place 21 000 Max in 2021 oh that’s how you develop twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty six thousand dollars per employee that is since that’s a lot of cash it is now there’s a caution 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 2 you would reduce the 26 000 so what we’re seeing usually Kevin is if you took PPP cash somewhere around 10 thousand dollars a person so let’s state hypothetically you owned a restaurant 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 IRS so it’s huge obviously now the big concern is why does nobody know about this due to the fact that appearance when I first found out about this when I first met Josh you know I’ve got lots of investments in lots of companies I’m a significant supporter for entrepreneurship in America and make numerous many investments in entrepreneurs of which many suffered through the pandemic when I initially heard about this I called BS I do not think 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 and that were well should have and we utilized them sensibly to stay alive during the pandemic so when I heard about this I stated nah it can’t be true but when I dug around I even called to my political leader friends Guv Senators they didn’t learn about it I indicate that’s how you know that’s how misinformation is that there’s no info out there then a bunch of individuals informed me well you can’t get it because you took the PPP likewise not true so let’s ask Josh why does no one know about the employee retention credit you understand what’s interesting you’re talking about the banks Kevin since in the PPP loan process the federal government made it extremely 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 turmoil because remember in the original cares act you could not do both programs so if you had done PPP you could not do ERC in the original program and when they changed 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 ever made it clear to anybody about how to.
do this does your CFO understand how to do this not really she or he’s never done it in the past do the banks do it nope the banks don’t do it the payroll business yeah a few of them are doing it as a payroll business your accountant no your accounting professional’s never ever done this before unless you have an account that entered into this business and bottom line my firm Kevin has actually stayed in business given that 2009 and we’ve been working with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 companies so a lot of our big big business clients have worked with bottom line to recover other federal government programs we have actually done sales tax and use tax unemployment tax work opportunity 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 designed to motivate.
companies to keep staff members on their payroll. The credit is 50% of as much as $10,000 in earnings paid by an.
employer whose business is fully or partly suspended because of COVID-19 or whose gross invoices.
decrease by more than 50%.
1. The credit is available to all employers despite size including tax exempt organizations. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
companies who take Small company Loans.
2. To qualify, the employer has to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s company is totally or partially suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross invoices are below 50% of the comparable quarter in 2019. When the.
employer’s gross receipts go above 80% of an equivalent quarter in 2019 they no longer qualify.
after the end of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the qualifying incomes paid up to $10,000 in overall.
It is effective for incomes paid after March 13th and prior to December 31, 2020.
The meaning of qualifying incomes varies by whether an employer had, on average, basically than.
100 workers in 2019.
Business that focus on ERC filing help typically provide know-how and support to help businesses navigate the intricate process of declaring the credit. They can offer various services, consisting of:.
How is the employee retention credit calculated? Asc 958-605 Employee Retention Credit
Eligibility Assessment: These companies will assess your company’s eligibility for the ERC based on factors such as your market, profits, and operations. They can assist determine if you fulfill the requirements for the credit and determine the maximum credit quantity you can declare.
Paperwork and Computation: ERC filing services will help in gathering the essential documents, such as payroll records and monetary statements, to support your claim. They will likewise assist calculate the credit quantity based on eligible salaries and other certifying expenditures.
Retroactive Claim Review: If you are eligible to declare the ERC for previous quarters, these business can review your previous payroll records and financials to recognize prospective chances for retroactive credits. They can help you amend previous tax returns to declare these refunds.
Filing Help: Business specializing in ERC filings will prepare and send the required types and documents on your behalf. This includes completing Type 941 or any other required tax return.
Compliance and Updates: ERC policies and assistance have actually progressed over time. These companies remain updated with the current changes and guarantee that your filings adhere to the most existing standards. They can also supply ongoing assistance if the IRS requests extra info or carries out an audit related to your ERC claim.
It is essential to research and vet any business providing ERC filing assistance to ensure their trustworthiness and competence. Look for established firms with experience in tax and payroll services, or consider connecting to relied on accounting firms or tax experts who use ERC submitting assistance.
Bear in mind that while these business can supply valuable help, it’s always a great concept to have a fundamental understanding of the ERC requirements and procedure yourself. This will assist you make notified decisions and ensure precise filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief measures. The goal of the ERC is to motivate services to retain and pay their staff members during 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 organizations, tax-exempt companies, and specific governmental entities. To certify, employers must fulfill one of two requirements:.
The business operations were completely or partially suspended due to a federal government order related to COVID-19.
Business experienced a considerable decrease in gross receipts. As mentioned earlier, for 2021, a considerable decline is defined as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decrease 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 percentage (approximately 70%) of qualified incomes paid to staff members, including particular health insurance 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, organizations that received a Paycheck Protection Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 enables organizations to declare the ERC even if they received a PPP loan. The exact same salaries can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and enhanced, permitting qualified companies to declare the credit for qualified earnings paid as far back as March 13, 2020. This retroactive arrangement offers a chance for services to amend prior-year income tax return and receive refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their employment tax returns, usually Kind 941. If the credit goes beyond the amount of work taxes owed, the excess can be refunded to the company.
It’s important to keep in mind that the ERC provisions and eligibility requirements have actually developed in time. The best course of action is to speak with a tax professional or visit the official internal revenue service website for the most in-depth and up-to-date information relating to the ERC, consisting of any current legal changes or updates.
To receive the ERC, an organization needs to satisfy one of the following requirements:.
The business operations were completely or partly suspended due to a federal government order related to COVID-19.
The business experienced a considerable decrease in gross invoices. For 2021, a substantial decline is defined as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decline in gross invoices compared to the right away preceding quarter.
The ERC is offered to companies of all sizes, including tax-exempt companies, but there are some exceptions. Federal government entities and companies that received a PPP loan might have restrictions on declaring the credit.
The procedure for claiming the ERC includes finishing the required forms and consisting of the credit on your employment tax return (usually Form 941). The exact time it takes to process the credit can vary based upon several factors, 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 specific to your situation.
There are numerous business that can help with the process of claiming the ERC. These include accounting companies, tax advisory services, and payroll company. Some widely known business that provide assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research and call these companies straight to ask about their services and costs.
Please keep in mind that the info supplied here is based on general knowledge and may not show the most current updates or changes to the ERC. It’s important to consult with a tax professional or go to the official internal revenue service website for the most current and precise info relating to eligibility, claiming procedures, and available assistance.
Less than 100. If the employer had 100 or less employees on average in 2019, then the credit is based.
on salaries paid to all staff members whether they in fact worked or not. In other words, 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 employer had more than 100 employees on average in 2019.
permitted just for wages paid to workers who did not work during the calendar quarter.
In both cases, “incomes” consists of not simply money payments but likewise a part of the cost of company.
supplied health care. Asc 958-605 Employee Retention Credit
Employers can be right away compensated for the credit by lowering the amount of payroll taxes they.