Lets talk first about Employee Retention Credit Accounting Treatment :
Our team here what do these people doing everybody in this space is helping teach people about ERC and uh always supply a stunning breakfast and have individuals actually discover 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 wish to see that what is this this is uh hundreds of millions of dollars actually Kevin numerous countless dollars so these are replicate copies of the letters that go to customers verifying that the check is on the way I mean you understand if you simply begin to take a look at some 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 mean consider the number of real customers that went through the program yeah this is the very end this is the celebration at the end when the check is verified the numbers are confirmed and the check is on the mail in the mail from the internal revenue service heading to the customer so that’s how you’re able to track it you know when you
get this you know the check is opted for sure and that’s when they pay so they don’t pay anything till they really 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 deposit it into their checking account and they can really rely on Wonder trust that the procedure has been ended up and how many you believe you have actually processed since you began this we have to do with 35 000 of these for
about six billion dollars wow so clearly they understand what they’re doing which’s what you need you require experts 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 Wonderful here you’re at my YouTube channel we’re speaking about something truly important today the employee retention credit which most of you have actually never become aware of I definitely had not heard of it up until very recently and found out a lot about it since this is most likely the lowest cost of capital for any small company anywhere
anytime if you have employees in between five 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 largest processor of these ERC credits this is a 170 page program so it’s hard this isn’t like PPP we just phone your bank supervisor 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 all of us 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 very soon you got to discover all about it let’s talk employee retention credit Josh Fox what is an ERC let’s just start there so throughout the Trump Administration when President Trump was enacted they developed 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 everybody it makes a big difference right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the cash money payroll tax refund all right go on sorry I just need to make sure we got that point I indicate that’s a big difference a loan versus cash money I like cash cash that’s what we’re speaking about 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 initial cares Act is the ERC and yes Kevin it is a lovely difficult check in the mail where you get actual money from the IRS all right so let’s speak about how it works because it sounds like to me if it’s a if it’s employee retention credit that person needed 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 employees right you needed to have owned a service however it’s based on you having W-2 workers in America not 10.99. 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 6 quarters the program was open well walk us through the six quarters so you had quarters two three and four of 2020 and you had quarters one 2 and 3 of 2021. alright so that’s how it’s determined you need to be on the W-2 throughout that duration now let’s talk my preferred part money just how much can you get back per employee that was on a W-2 in those 6 quarters so the calculation in 2020 to be precise Kevin is 50 of the staff member’s wage 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 worker’s income to an optimum of seven thousand per quarter how did that take place um they simply altered the rules in.
2021 versus since the turmoil 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 5 thousand Max and after that what takes place 21 000 Max in 2021 oh that’s how you come up with 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 lot of cash it is now there’s a caution here the PPP money would have to be decreased from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would minimize the 26 000 so what we’re seeing typically Kevin is if you took PPP money someplace around ten thousand dollars an individual so let’s say 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 substantial obviously now the big question is why does no one learn about this because look when I initially became aware of this when I initially met Josh you understand I’ve got lots of financial investments in lots of business I’m a major advocate for entrepreneurship in America and make lots of numerous investments in entrepreneurs of which numerous suffered through the pandemic when I initially became aware of this I called BS I don’t think it since I utilize the PPP we went through the money 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 used them carefully to stay alive throughout the pandemic so when I heard about this I said nah it can’t hold true but when I dug around I even called to my politician pals Guv Senators they didn’t know about it I suggest that’s how you know that’s how misinformation is that there’s no details out there then a lot 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 no one understand about the staff member retention credit you understand what’s interesting you’re discussing the banks Kevin due to the fact that in the PPP loan procedure the federal government made it very clear that if you wanted 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 simply process process that’s all um and here there was mayhem since keep in mind in the original cares act you might not do both programs so if you had actually done PPP you might not do ERC in the initial program and when they changed 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 made it clear to anyone about how to.
do this does your CFO understand how to do this not really he or she’s never done it in the past do the banks do it nope the banks don’t do it the payroll companies yeah a few of them are doing it as a payroll company your accounting professional no your accountant’s never done this prior to unless you have an account that entered into this service and bottom line my company Kevin has been in business given that 2009 and we have actually 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 big business clients have worked with bottom line to recover other federal government programs we’ve done sales tax and utilize tax unemployment tax work opportunity tax credits research and development tax credits unclaimed property property tax all of these other federal government programs.
The worker retention tax credit is a broad based refundable tax credit developed to motivate.
companies to keep workers on their payroll. The credit is 50% of as much as $10,000 in incomes paid by an.
company whose organization is totally or partially suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
1. The credit is available to all employers regardless of size including tax exempt companies. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) small.
businesses who take Small Business Loans.
2. To certify, the employer has to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s service is fully or partially suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are listed below 50% of the equivalent quarter in 2019. When the.
company’s gross invoices exceed 80% of a similar quarter in 2019 they no longer certify.
after completion of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the qualifying wages paid up to $10,000 in overall.
It works for salaries paid after March 13th and prior to December 31, 2020.
The definition of qualifying earnings differs by whether an employer had, on average, basically than.
100 workers in 2019.
Companies that focus on ERC filing assistance normally offer proficiency and support to help companies browse the intricate process of claiming the credit. They can use different services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Accounting Treatment
Eligibility Evaluation: These companies will examine your company’s eligibility for the ERC based on elements such as your market, earnings, and operations. They can assist identify if you fulfill the requirements for the credit and determine the optimum credit amount you can claim.
Paperwork and Computation: ERC filing services will help in gathering the required documents, such as payroll records and financial statements, to support your claim. They will also assist calculate the credit amount based upon qualified earnings and other qualifying 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 chances for retroactive credits. They can assist you amend prior tax returns to declare these refunds.
Filing Support: Business focusing on ERC filings will prepare and send the necessary forms and documentation in your place. This includes completing Type 941 or any other required tax forms.
Compliance and Updates: ERC guidelines and guidance have actually progressed gradually. These companies stay updated with the most recent changes and guarantee that your filings adhere to the most current guidelines. They can likewise offer continuous assistance if the IRS requests extra info or carries out an audit related to your ERC claim.
It is necessary to research and vet any company using ERC filing help to ensure their credibility and know-how. Search for established firms with experience in tax and payroll services, or consider connecting to relied on accounting firms or tax specialists who provide ERC filing support.
Bear in mind that while these companies can provide important support, it’s always a great idea to have a fundamental understanding of the ERC requirements and procedure yourself. This will help you make notified decisions and ensure accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief measures. The goal of the ERC is to encourage organizations to retain and pay their staff members throughout the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to qualified employers, including for-profit businesses, tax-exempt organizations, and certain governmental entities. To certify, employers must satisfy one of two criteria:.
The business operations were completely or partly suspended due to a federal government order related to COVID-19.
The business experienced a substantial decrease in gross invoices. As pointed out previously, for 2021, a considerable decline is defined as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decline in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross receipts compared to the immediately preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount amounts to a percentage (as much as 70%) of certified salaries paid to staff members, including certain health plan expenditures. The optimum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, companies that got a Paycheck Security Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 enables organizations to claim the ERC even if they received a PPP loan. However, the very same wages can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively broadened and improved, enabling qualified companies to declare the credit for qualified earnings paid as far back as March 13, 2020. This retroactive arrangement offers an opportunity for services to change prior-year income tax return and get refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their employment income tax return, typically Type 941. The excess can be reimbursed to the company if the credit surpasses the amount of employment taxes owed.
It is very important to keep in mind that the ERC arrangements and eligibility criteria have actually progressed in time. The very best strategy is to talk to a tax professional or visit the official IRS site for the most comprehensive and updated information regarding the ERC, including any recent legal modifications or updates.
To receive the ERC, a business should fulfill one of the following requirements:.
Business operations were fully or partly suspended due to a federal government order related to COVID-19.
Business experienced a considerable decrease in gross receipts. For 2021, a considerable decrease is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decline in gross invoices compared to the right away preceding quarter.
The ERC is available to companies of all sizes, including tax-exempt companies, but there are some exceptions. Federal government entities and services that received a PPP loan may have constraints on declaring the credit.
The procedure for declaring the ERC includes finishing the necessary kinds and including the credit on your work income tax return (generally Form 941). The exact time it requires to process the credit can differ based upon numerous elements, including the intricacy of your service and the workload of the internal revenue service. It’s recommended to consult with a tax expert for guidance specific to your circumstance.
There are several business that can help with the process of declaring the ERC. Some popular business that use assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the details provided here is based upon general knowledge and might not show the most recent updates or changes to the ERC. It is essential to speak with a tax expert or go to the official IRS website for the most up-to-date and accurate information concerning eligibility, declaring procedures, and readily available assistance.
Less than 100. The credit is based if the employer had 100 or fewer staff members on average in 2019.
on salaries paid to all employees whether they really worked or not. Simply put, even if the.
employees worked full-time and earned money for full time work, the company still gets the credit.
Greater than 100. If the company had more than 100 employees typically in 2019, then the credit is.
permitted only for wages paid to staff members who did not work throughout the calendar quarter.
In both cases, “earnings” consists of not simply money payments however also a portion of the cost of employer.
supplied health care. Employee Retention Credit Accounting Treatment
Employers can be instantly compensated for the credit by reducing the amount of payroll taxes they.