Lets talk first about Employee Retention Credit 4Th Quarter :
Our group here what do these people doing everyone in this space is assisting teach people about ERC and uh always provide a beautiful breakfast and have people truly learn more about the program we should head to the room where we are able to show some of the checks that we are getting for companies and I want to see that what is this this is uh hundreds of countless dollars literally Kevin numerous countless dollars so these are replicate copies of the letters that go to customers verifying that the check is on the method I suggest you understand if you simply start 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 suggest consider the number of actual 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 confirmed 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 understand when you
get this you know the check is opted for sure which’s when they pay so they do not pay anything up until they really receive the cash they don’t pay bottom line Wonder trust anything up until this letter is confirmed the check is on the way they transfer it into their bank account and they can truly trust Wonder trust that the procedure has been finished and how many you believe you have actually processed given that you started this we’re about 35 000 of these for
about six billion dollars wow so clearly they know what they’re doing and that’s what you need you require specialists 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 speaking about something actually crucial today the worker retention credit which most of you have never ever heard of I definitely hadn’t become aware of it till really just recently and learned a lot about it because this is probably the lowest cost of capital for any small company anywhere
anytime if you have staff members between five and five hundred so I have actually got the expert 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 difficult this isn’t like PPP we simply call up your bank manager and say 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 have actually become yes the Ambassador and paid spokesperson for this I love this program it’s disappearing very 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 offered companies three opportunities 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 exactly so the ERC is a refund that’s.
remedy the cash money payroll tax refund okay go on sorry I just need to make certain we got that point I imply that’s a huge distinction a loan versus money money I like money money that’s what we’re discussing all right 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 gorgeous hard check in the mail where you get real money from the internal revenue service all right so let’s talk 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 worker so I’m going to make the Presumption this cash is not for the owner not for people on the cap table not for shareholders it’s for staff members right you had to have actually owned a business but it’s based upon you having W-2 workers 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 need 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 correct so there were six quarters the program was open well stroll us through the 6 quarters so you had quarters 2 3 and 4 of 2020 and you had quarters one two and three of 2021. alright so that’s how it’s measured you need to be on the W-2 throughout that period now let’s talk my favorite part cash how much can you return per worker that was on a W-2 in those six quarters so the calculation in 2020 to be precise Kevin is 50 of the employee’s income to a maximum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers increased to 70 of the staff member’s wage to an optimum of 7 thousand per quarter how did that take place um they just changed the rules in.
2021 versus because 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 up to five thousand Max and after that 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 employee that is since that’s a great deal of money it is now there’s a caution here the PPP cash would need to be reduced from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would lower the 26 000 so what we’re seeing usually Kevin is if you took PPP cash somewhere around 10 thousand dollars an individual so let’s say hypothetically you owned a dining establishment in New York City where I’m from and you had a hundred staff members and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s big obviously now the huge question is why does no one learn about this since look when I initially became aware of this when I first satisfied Josh you know I have actually got great deals of 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 numerous suffered through the pandemic when I initially heard about this I called BS I do not think it because I utilize the PPP we went through the cash 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 deserved and we used them carefully to survive throughout the pandemic so when I heard about this I said nah it can’t be true however when I dug around I even contacted us to my political leader buddies Guv Senators they didn’t learn about it I indicate that’s how you understand that’s how false information is that there’s no details out there then a lot of individuals informed me well you can’t get it because you took the PPP likewise not real so let’s ask Josh why does nobody know about the staff member retention credit you know what’s fascinating you’re discussing the banks Kevin because 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 just procedure process that’s all um and here there was mayhem because remember in the original cares act you might refrain from doing 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 because 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 really she or he’s never ever done it in the past 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 organization and bottom line my firm Kevin has stayed in business since 2009 and we’ve been working with the federal government and the state federal government to recuperate cash for Fortune 500 Fortune 1000 companies so a great deal of our huge huge corporate customers have worked with bottom line to recuperate other federal government programs we have actually done sales tax and use tax joblessness tax work opportunity tax credits research and development tax credits unclaimed home property 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 as much as $10,000 in wages paid by an.
Since of COVID-19 or whose gross receipts, company whose service is totally or partially suspended.
decline by more than 50%.
1. The credit is available to all companies despite size including tax exempt organizations. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
businesses who take Small Business Loans.
2. To certify, the employer needs to satisfy one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s organization is totally or partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the equivalent quarter in 2019. Once the.
employer’s gross invoices exceed 80% of an equivalent quarter in 2019 they no longer qualify.
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 is effective for earnings paid after March 13th and before December 31, 2020.
The meaning of qualifying wages varies by whether a company had, typically, more or less than.
100 workers in 2019.
Companies that focus on ERC filing help generally provide know-how and assistance to assist companies navigate the complicated process of claiming the credit. They can offer different services, including:.
How is the employee retention credit calculated? Employee Retention Credit 4Th Quarter
Eligibility Evaluation: These companies will assess your business’s eligibility for the ERC based upon aspects such as your market, income, and operations. They can help figure out if you meet the requirements for the credit and determine the optimum credit amount you can declare.
Paperwork and Computation: ERC filing services will help in collecting the required documents, such as payroll records and financial statements, to support your claim. They will also help calculate the credit amount based upon qualified salaries and other qualifying costs.
Retroactive Claim Review: If you are qualified to declare the ERC for previous quarters, these business can examine your previous payroll records and financials to identify possible opportunities for retroactive credits. They can assist you change prior income tax return to declare these refunds.
Filing Help: Business focusing on ERC filings will prepare and send the required types and documents on your behalf. This consists of finishing Type 941 or any other necessary tax forms.
Compliance and Updates: ERC regulations and assistance have actually developed over time. These companies stay updated with the current changes and ensure that your filings abide by the most present standards. If the Internal revenue service requests additional information or carries out an audit related to your ERC claim, they can also provide ongoing assistance.
It is very important to research and vet any company providing ERC filing assistance to ensure their credibility and expertise. Search for recognized firms with experience in tax and payroll services, or think about reaching out to trusted accounting firms or tax professionals who provide ERC filing support.
Keep in mind that while these companies can offer 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 ensure precise filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief steps. The goal of the ERC is to motivate companies to keep and pay their workers throughout the pandemic, even if their operations have actually been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to eligible companies, including for-profit companies, tax-exempt organizations, and specific governmental entities. To certify, employers need to 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 receipts. As discussed earlier, for 2021, a substantial 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% decline in gross receipts compared to the exact same quarter in 2019, or a 20% decrease in gross receipts compared to the right away preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount is equal to a percentage (approximately 70%) of qualified salaries paid to staff members, consisting of specific health plan costs. 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, organizations that received a Paycheck Defense Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 permits businesses to claim the ERC even if they received a PPP loan. Nevertheless, the exact same salaries can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and enhanced, allowing eligible employers to declare the credit for certified salaries paid as far back as March 13, 2020. This retroactive provision supplies an opportunity for services to modify prior-year income tax return and receive refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their employment income tax return, generally Type 941. If the credit surpasses the quantity of work taxes owed, the excess can be reimbursed to the employer.
It is essential to keep in mind that the ERC arrangements and eligibility requirements have actually evolved over time. The best strategy is to talk to a tax professional or go to the official IRS website for the most current and in-depth information regarding the ERC, consisting of any current legal modifications or updates.
To receive the ERC, a service needs to meet among the following criteria:.
The business operations were fully or partly suspended due to a federal government order related to COVID-19.
Business experienced a considerable decline in gross invoices. For 2021, a substantial decline is defined as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a substantial decrease is specified as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross receipts compared to the right away preceding quarter.
The ERC is readily available to services of all sizes, including tax-exempt companies, however there are some exceptions. For instance, federal government entities and services that got a PPP loan may have constraints on claiming the credit.
The procedure for declaring the ERC involves completing the essential kinds and including the credit on your work tax return (normally Type 941). The exact time it requires to process the credit can vary based on several factors, consisting of the intricacy of your organization and the workload of the internal revenue service. It’s recommended to seek advice from a tax expert for guidance particular to your circumstance.
There are several business that can help with the procedure of declaring the ERC. These consist of accounting firms, tax advisory services, and payroll provider. Some popular companies that use help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research and get in touch with these business straight to ask about their fees and services.
Please keep in mind that the information supplied here is based on basic understanding and may not reflect the most recent updates or modifications to the ERC. It’s important to consult with a tax expert or go to the official internal revenue service website for the most current and precise information regarding eligibility, declaring procedures, and readily available assistance.
Less than 100. If the employer had 100 or less staff members typically in 2019, then the credit is based.
on wages paid to all staff members whether they in fact worked or not. In other words, even if the.
employees worked full-time and got paid for full time work, the employer still gets the credit.
Greater than 100. The credit is if the employer had more than 100 workers on average in 2019.
enabled only for incomes paid to staff members who did not work during the calendar quarter.
In both cases, “earnings” includes not simply money payments but also a portion of the cost of employer.
provided health care. Employee Retention Credit 4Th Quarter
Employers can be immediately compensated for the credit by decreasing the quantity of payroll taxes they.