Lets talk first about Cohnreznick Employee Retention Credit :
Our team here what do these guys doing everybody in this space is helping teach individuals about ERC and uh always provide a beautiful breakfast and have people really learn more about the program we should head to the room where we have the ability to show a few of the checks that we are getting for business and I wish to see that what is this this is uh numerous countless 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 method I mean you understand if you simply start to look at a few 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 simply I suggest consider 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 validated the numbers are verified 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 chosen sure and that’s when they pay so they don’t pay anything until they actually receive the cash 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 checking account and they can genuinely rely on Wonder trust that the procedure has been ended up and the number of you think you’ve processed because you began this we have to do with 35 000 of these for
about 6 billion dollars wow so clearly 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 truly important today the staff member retention credit which the majority of you have actually never become aware of I certainly had not become aware of it until really recently and discovered a lot about it because this is probably the most affordable cost 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 Principles 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 just call your bank supervisor and state give 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 ended up being yes the Ambassador and paid representative for this I love this program it’s disappearing soon you got to find out everything about it let’s talk worker retention credit Josh Fox what is an ERC let’s just begin there so during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act used services 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 difference right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
remedy the money money payroll tax refund fine go on sorry I simply need to make certain we got that point I mean that’s a huge difference a loan versus money cash I like cash cash that’s what we’re discussing alright 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 stunning tough check in the mail where you get real cash from the IRS all right so let’s talk about how it works because it sounds like to me if it’s a if it’s employee retention credit that person had to be a staff member so I’m going to make the Presumption this cash is not for the owner not for individuals on the cap table not for investors it’s for workers right you needed to have actually owned an organization however it’s based on you having W-2 employees in America not 10.99. so 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 right so there were six quarters the program was open well walk us through the six quarters so you had quarters two three and 4 of 2020 and you had quarters one 2 and three of 2021. alright so that’s how it’s measured you have to be on the W-2 during that period now let’s talk my favorite part cash how much can you get back per worker that was on a W-2 in those 6 quarters so the computation in 2020 to be exact Kevin is 50 of the employee’s salary to an optimum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the worker’s salary to an optimum of 7 thousand per quarter how did that happen um they just changed 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 after that what takes place 21 000 Max in 2021 oh that’s how you create 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 because that’s a great deal of cash it is now there’s a caution here the PPP cash would have to be reduced from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would reduce the 26 000 so what we’re seeing typically Kevin is if you took PPP money somewhere around ten thousand dollars an individual so let’s say hypothetically you owned a restaurant 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 IRS so it’s huge undoubtedly now the huge question is why does no one know about this since look when I initially heard about this when I first fulfilled Josh you know I’ve got lots of financial investments in great deals of companies I’m a major supporter for entrepreneurship in America and make lots of numerous investments in business owners of which many suffered through the pandemic when I first heard about 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 very easy to do we had our CEOs call the banks they got their loans which were well been worthy of and we utilized them wisely to stay alive during the pandemic so when I became aware of this I said nah it can’t be true but when I dug around I even contacted us to my politician good friends Governor Senators they didn’t learn about it I suggest that’s how you know that’s how misinformation is that there’s no information out there then a lot of people informed me well you can’t get it because you took the PPP likewise not real so let’s ask Josh why does no one learn about the staff member retention credit you know what’s interesting you’re discussing the banks Kevin since in the PPP loan procedure 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 country and they would process process in Canada a pre-pp loan there’s no loans in Canada by the way it’s just procedure procedure that’s all um and here there was turmoil because keep in mind in the original cares act you might refrain from doing both programs so if you had done PPP you could refrain from doing ERC in the initial program and when they altered the law in 2021 the banks were not doing ERC due to the fact that it’s not alone so you’re getting a tax refund so the federal government never ever made it clear to any person about how to.
do this does your CFO know how to do this not really he or she’s never done it previously 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 business your accounting professional no your accounting professional’s never ever done this prior to unless you have an account that went into this organization and bottom line my company Kevin has actually been in business given that 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 huge huge corporate clients have actually dealt with bottom line to recover other government programs we’ve done sales tax and use tax joblessness tax work chance 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 designed to encourage.
companies to keep workers on their payroll. The credit is 50% of approximately $10,000 in earnings paid by an.
employer whose company is fully or partly suspended because of COVID-19 or whose gross invoices.
decrease by more than 50%.
1. The credit is offered to all employers despite size including tax exempt companies. There are.
just 2 exceptions: (1) state and city governments and their instrumentalities and (2) little.
services who take Small Business Loans.
2. To qualify, the company needs to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s service is totally or partially suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are below 50% of the equivalent quarter in 2019. When the.
employer’s gross receipts go above 80% of a comparable quarter in 2019 they no longer certify.
after completion of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the qualifying incomes paid up to $10,000 in total.
It works for earnings paid after March 13th and before December 31, 2020.
The definition of qualifying wages varies by whether a company had, typically, more or less than.
100 staff members in 2019.
Business that specialize in ERC filing support typically supply knowledge and support to assist services navigate the intricate procedure of claiming the credit. They can offer numerous services, including:.
How is the employee retention credit calculated? Cohnreznick Employee Retention Credit
Eligibility Assessment: These business will assess your organization’s eligibility for the ERC based upon factors such as your industry, income, and operations. If you meet the requirements for the credit and recognize the maximum credit quantity you can claim, they can help figure out.
Documentation and Calculation: ERC filing services will assist in collecting the essential documentation, such as payroll records and financial declarations, to support your claim. They will also assist calculate the credit quantity based on qualified salaries and other certifying expenditures.
Retroactive Claim Review: If you are eligible to claim the ERC for previous quarters, these companies can evaluate your past payroll records and financials to identify possible opportunities for retroactive credits. They can assist you modify previous tax returns to declare these refunds.
Filing Assistance: Companies specializing in ERC filings will prepare and submit the necessary types and paperwork in your place. This consists of completing Form 941 or any other necessary tax forms.
Compliance and Updates: ERC policies and guidance have developed with time. These companies stay upgraded with the current modifications and make sure that your filings abide by the most existing standards. They can also offer ongoing support if the IRS demands extra info or performs an audit related to your ERC claim.
It’s important to research and vet any company using ERC filing help to ensure their credibility and know-how. Try to find established companies with experience in tax and payroll services, or think about connecting to relied on accounting firms or tax experts who offer ERC submitting assistance.
Bear in mind that while these business can offer valuable support, it’s constantly a good concept to have a basic understanding of the ERC requirements and process yourself. This will help you make notified decisions and make sure precise filings.
The Staff Member 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 maintain and pay their employees throughout the pandemic, even if their operations have been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is available to eligible companies, consisting of for-profit businesses, tax-exempt companies, and certain governmental entities. To qualify, companies should 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 considerable decline in gross invoices. As discussed earlier, 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 substantial decrease is specified as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity is equal to a percentage (approximately 70%) of qualified incomes paid to workers, consisting of specific health plan 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, companies that received an Income Defense Program (PPP) loan were not eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 allows companies to declare the ERC even if they received a PPP loan. However, the very same wages 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, permitting qualified companies to declare the credit for certified earnings paid as far back as March 13, 2020. This retroactive arrangement offers a chance for businesses to change prior-year income tax return and get refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their employment tax returns, usually Kind 941. If the credit exceeds the quantity of employment taxes owed, the excess can be refunded to the company.
It is essential to note that the ERC provisions and eligibility criteria have developed over time. The very best strategy is to consult with a tax expert or go to the main IRS site for the most detailed and current details regarding the ERC, consisting of any recent legal changes or updates.
To get approved for the ERC, an organization should fulfill among the following 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 receipts. For 2021, a substantial decrease is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross receipts compared to the right away preceding quarter.
The ERC is available to businesses of all sizes, including tax-exempt organizations, but there are some exceptions. Government entities and organizations that received a PPP loan might have limitations on declaring the credit.
The procedure for claiming the ERC includes completing the required types and consisting of the credit on your work income tax return (generally Kind 941). The exact time it takes to process the credit can vary based upon numerous factors, including the intricacy of your company and the work of the internal revenue service. It’s recommended to seek advice from a tax expert for assistance particular to your scenario.
There are a number of companies that can assist with the procedure of declaring the ERC. Some widely known companies that offer support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the information provided here is based on basic understanding and might not show the most recent updates or modifications to the ERC. It is very important to consult with a tax professional or check out the official IRS site for the most accurate and current info regarding eligibility, claiming procedures, and available support.
Less than 100. If the company had 100 or less workers usually in 2019, then the credit is based.
on salaries paid to all employees whether they in fact worked or not. Simply put, even if the.
staff members worked full-time and made money for full-time work, the company still gets the credit.
Greater than 100. The credit is if the company had more than 100 staff members on average in 2019.
enabled only for wages paid to workers who did not work during the calendar quarter.
In both cases, “earnings” includes not simply cash payments however also a portion of the cost of employer.
provided healthcare. Cohnreznick Employee Retention Credit
Employers can be immediately repaid for the credit by minimizing the amount of payroll taxes they.