Lets talk first about Cares Act Employee Retention Credit Application :
Our team here what do these guys doing everyone in this room is assisting teach individuals about ERC and uh constantly offer a beautiful breakfast and have individuals really learn about the program we ought to head to the room where we are able to display some of the checks that we are getting for companies and I want to see that what is this this is uh numerous countless dollars literally Kevin hundreds of countless dollars so these are duplicate copies of the letters that go to customers validating that the check is on the method I imply 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 mean it’s simply I imply consider the number of real customers 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 verified and the check is on the mail in the mail from the IRS heading to the consumer so that’s how you have the ability 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 in fact receive the cash they don’t pay bottom line Wonder trust anything up until this letter is verified the check is on the method they transfer it into their bank account and they can truly trust Wonder trust that the procedure has been finished and the number of you think you’ve processed considering that you started this we have to do with 35 000 of these for
about six billion dollars wow so plainly they know what they’re doing which’s what you require you require specialists 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 talking about something really important today the staff member retention credit which the majority of you have never ever heard of I certainly had not heard of it up until very recently and found out a lot about it since this is most likely the most affordable expense of capital for any small business anywhere
anytime if you have workers in between five and five hundred so I’ve got the professional with me this is Josh Fox he’s the creator and CEO of bottom line Concepts 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 simply call up your bank supervisor and state provide me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to inform 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 enjoy this program it’s disappearing soon you got to find out everything about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply start there so throughout the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act provided companies three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everyone it makes a big distinction right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
remedy the money money payroll tax refund fine go on sorry I simply have to make certain we got that point I suggest that’s a big difference a loan versus money cash I like money cash that’s what we’re speaking about 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 beautiful hard check in the mail where you get actual money from the internal revenue service all right so let’s speak about how it works due to the fact that it seems like to me if it’s a if it’s staff member retention credit that individual had to be a staff member so I’m going to make the Assumption this money is not for the owner not for people on the cap table not for shareholders it’s for workers right you had to have owned a service but it’s based upon you having W-2 employees 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 qualified 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 proper so there were six quarters the program was open well walk us through the six quarters so you had quarters 2 three and 4 of 2020 and you had quarters one two and three of 2021. fine so that’s how it’s measured you have to be on the W-2 throughout that period now let’s talk my favorite part money just 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 worker’s wage to a maximum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the worker’s salary to a maximum of seven thousand per quarter how did that occur um they just altered the rules in.
2021 versus due to the fact that the chaos 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 as much as five thousand Max and after that what happens 21 000 Max in 2021 oh that’s how you create 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 great deal of cash it is now there’s a caveat here the PPP money would need to be reduced from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would reduce 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 state hypothetically you owned a restaurant in New York City where I’m from and you had a hundred employees and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s big certainly now the big question is why does no one learn about this because look when I first became aware of this when I initially fulfilled Josh you know I have actually got great deals of financial investments in great deals of business I’m a major supporter for entrepreneurship in America and make numerous numerous financial investments in business owners of which numerous suffered through the pandemic when I initially became aware of this I called BS I don’t believe it since 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 carefully to survive throughout the pandemic so when I became aware of this I stated nah it can’t hold true but when I dug around I even contacted us to my political leader pals Guv Senators they didn’t know about it I imply that’s how you know 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 true so let’s ask Josh why does no one learn about the employee retention credit you know what’s interesting you’re talking about the banks Kevin since in the PPP loan procedure 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 huge 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 process procedure that’s all um and here there was turmoil due to the fact that keep in mind in the original cares act you could not do both programs so if you had done PPP you might refrain from doing ERC in the initial program and when they altered the law in 2021 the banks were not doing ERC since 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 actually he or she’s never ever done it before do the banks do it nope the banks do not do it the payroll business yeah some of them are doing it as a payroll company your accounting professional no your accountant’s never ever done this before unless you have an account that entered into this service and bottom line my firm Kevin has actually stayed in business given that 2009 and we have actually been dealing with the federal government and the state government to recover money for Fortune 500 Fortune 1000 business so a great deal of our huge huge business clients have actually worked with bottom line to recover other government programs we have actually done sales tax and use tax unemployment tax work opportunity tax credits research and development tax credits unclaimed home property tax all of these other government programs.
The staff member retention tax credit is a broad based refundable tax credit developed to encourage.
companies to keep workers on their payroll. The credit is 50% of as much as $10,000 in wages paid by an.
Since of COVID-19 or whose gross receipts, employer whose service is completely or partly suspended.
decrease by more than 50%.
1. The credit is available to all companies no matter size including 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 employer needs to satisfy one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s company is completely or partly suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross receipts are below 50% of the comparable quarter in 2019. As soon as the.
employer’s gross receipts exceed 80% of an equivalent quarter in 2019 they no longer qualify.
after the end of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the qualifying earnings paid up to $10,000 in total.
It works for salaries paid after March 13th and prior to December 31, 2020.
The definition of qualifying salaries varies by whether an employer had, on average, more or less than.
100 staff members in 2019.
Business that concentrate on ERC filing assistance normally supply expertise and support to assist businesses navigate the complex process of declaring the credit. They can offer different services, consisting of:.
How is the employee retention credit calculated? Cares Act Employee Retention Credit Application
Eligibility Assessment: These companies will examine your organization’s eligibility for the ERC based on factors such as your market, revenue, and operations. If you satisfy the requirements for the credit and identify the optimum credit amount you can claim, they can assist figure out.
Paperwork and Calculation: ERC filing services will assist in collecting the essential documentation, such as payroll records and monetary declarations, to support your claim. They will also help determine the credit amount based on eligible incomes and other qualifying costs.
Retroactive Claim Review: If you are eligible to declare the ERC for previous quarters, these business can examine your previous payroll records and financials to identify potential chances for retroactive credits. They can help you amend prior income tax return to claim these refunds.
Filing Support: Companies specializing in ERC filings will prepare and send the needed forms and paperwork on your behalf. This consists of finishing Type 941 or any other required tax return.
Compliance and Updates: ERC regulations and assistance have actually developed in time. These business remain upgraded with the most recent changes and make sure that your filings comply with the most present guidelines. They can also supply continuous assistance if the internal revenue service requests extra details or performs an audit related to your ERC claim.
It is very important to research and vet any business using ERC filing help to ensure their reliability and knowledge. Try to find established firms with experience in tax and payroll services, or think about connecting to relied on accounting firms or tax experts who use ERC filing assistance.
Remember that while these business can provide valuable assistance, it’s always a great idea to have a basic understanding of the ERC requirements and process yourself. This will help you make informed choices and make sure precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief measures. The goal of the ERC is to motivate businesses to retain and pay their employees during the pandemic, even if their operations have been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to qualified companies, including for-profit organizations, tax-exempt organizations, and certain governmental entities. To certify, companies need to satisfy one of two requirements:.
Business operations were totally or partially suspended due to a government order related to COVID-19.
The business experienced a considerable decrease in gross invoices. As mentioned earlier, for 2021, a considerable decline is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a substantial decline is defined as a 20% decline in gross receipts compared to the very same quarter in 2019, or a 20% decline in gross receipts compared to the right away preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit amount amounts to a percentage (approximately 70%) of qualified wages paid to staff members, including 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: At first, businesses that got a Paycheck Protection Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 permits services to claim the ERC even if they got a PPP loan. Nevertheless, the exact same salaries can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and boosted, allowing eligible companies to declare the credit for qualified incomes paid as far back as March 13, 2020. This retroactive arrangement provides a chance for companies to amend prior-year income tax return and get refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their work income tax return, generally Type 941. The excess can be refunded to the company if the credit goes beyond the amount of work taxes owed.
It is very important to note that the ERC provisions and eligibility criteria have developed with time. The very best strategy is to seek advice from a tax expert or visit the official internal revenue service website for the most updated and comprehensive info regarding the ERC, including any current legal changes or updates.
To receive the ERC, a service must meet one of the following criteria:.
Business operations were completely or partially suspended due to a government order related to COVID-19.
The business experienced a substantial decline in gross invoices. For 2021, a considerable decline is specified as a 20% decrease in gross invoices 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 same quarter in 2019, or a 20% decline in gross invoices compared to the instantly preceding quarter.
The ERC is available to organizations of all sizes, consisting of tax-exempt companies, however there are some exceptions. Federal government entities and businesses that got a PPP loan might have constraints on declaring the credit.
The process for claiming the ERC involves completing the needed types and including the credit on your work income tax return (normally Kind 941). The exact time it requires to process the credit can differ based upon several factors, consisting of the intricacy of your organization and the workload of the IRS. It’s advised to seek advice from a tax expert for guidance specific to your situation.
There are a number of companies that can assist with the procedure of declaring the ERC. Some popular business that provide assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the details supplied here is based upon basic understanding and might not reflect the most recent updates or modifications to the ERC. It is necessary to seek advice from a tax professional or go to the official IRS site for the most accurate and up-to-date information relating to eligibility, declaring procedures, and offered help.
Less than 100. The credit is based if the company had 100 or fewer employees on average in 2019.
on salaries paid to all workers whether they really worked or not. Simply put, even if the.
employees worked full-time and made money for full time work, the company still gets the credit.
Greater than 100. If the company had more than 100 staff members typically in 2019, then the credit is.
allowed only for earnings paid to employees who did not work during the calendar quarter.
In both cases, “wages” includes not just cash payments however likewise a part of the cost of employer.
provided health care. Cares Act Employee Retention Credit Application
Employers can be instantly repaid for the credit by lowering the amount of payroll taxes they.