Lets talk first about Employee Retention Credit Cares Act 2022 :
Our team here what do these men doing everybody in this room is helping teach individuals about ERC and uh always offer a stunning breakfast and have people really find out about the program we should head to the space where we have the ability to show some of the checks that we are getting for business and I ‘d like to see that what is this this is uh numerous millions of dollars actually Kevin numerous countless dollars so these are duplicate copies of the letters that go to customers confirming that the check is on the method I mean you know if you just start to 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 indicate it’s simply I mean think about the number of actual customers 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 confirmed and the check is on the mail in the mail from the IRS heading to the consumer so that’s how you’re able to track it you understand when you
get this you understand the check is chosen sure and that’s when they pay so they don’t pay anything till they in fact get the cash they don’t pay bottom line Wonder trust anything till this letter is validated the check is on the way they transfer it into their bank account and they can truly trust Wonder trust that the process has actually been finished and how many you believe you’ve processed because you began this we’re about 35 000 of these for
about 6 billion dollars wow so plainly they know what they’re doing which’s what you require you require experts 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 Fantastic 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 ever become aware of I certainly had not become aware of it up until really just recently and discovered a lot about it since this is most likely the lowest expense 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 Principles 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 call your bank supervisor and say give me a loan it doesn’t 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 like this program it’s going away very soon you got to learn everything about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply start there so during the Trump Administration when President Trump was enacted they came up with 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 practically everybody 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.
correct the cash money payroll tax refund alright go on sorry I simply need to ensure we got that point I imply that’s a huge distinction a loan versus cash cash I like cash cash 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 initial cares Act is the ERC and yes Kevin it is a stunning difficult check in the mail where you get real money from the internal revenue service all right so let’s discuss how it works due to the fact that it sounds like to me if it’s a if it’s staff member retention credit that person had to be a worker 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 staff members right you needed to have owned a business but it’s based on you having W-2 staff members in America not 10.99. so as long as you had W-2 workers 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 need to be on payroll for the very first 6 months of 2021 on the W-2 right so there were 6 quarters the program was open well walk us through the 6 quarters so you had quarters 2 3 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 during that period now let’s talk my favorite part cash just how much can you return per worker that was on a W-2 in those six quarters so the estimation in 2020 to be precise Kevin is 50 of the staff member’s salary to a maximum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers increased to 70 of the employee’s wage to a maximum of seven thousand per quarter how did that take place 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 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 takes place 21 000 Max in 2021 oh that’s how you develop twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty 6 thousand dollars per employee that is since that’s a great deal of cash it is now there’s a caution here the PPP cash would have to be minimized from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would minimize the 26 000 so what we’re seeing typically Kevin is if you took PPP money someplace around 10 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 money you would still get a million dollar in the mail from the IRS so it’s huge undoubtedly now the big concern is why does no one know about this because look when I first heard about this when I initially fulfilled Josh you know I have actually got great deals of financial investments in lots of companies I’m a significant supporter for entrepreneurship in America and make many numerous investments in entrepreneurs of which lots of suffered through the pandemic when I initially became aware of this I called BS I don’t think it because 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 which were well been worthy of and we utilized them carefully to survive throughout the pandemic so when I became aware of this I said nah it can’t hold true however when I dug around I even contacted us to my politician buddies Governor Senators they didn’t learn about it I indicate that’s how you know that’s how false information is that there’s no info out there then a bunch of people informed me well you can’t get it due to the fact that you took the PPP likewise not true so let’s ask Josh why does nobody know about the worker retention credit you know what’s fascinating you’re discussing the banks Kevin since in the PPP loan process the federal government made it really clear that if you wanted a PPP loan you would call Wells Fargo Citibank Bank of America any of the big banks in our nation and they would process process in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply process procedure that’s all um and here there was mayhem because keep in mind in the initial cares act you might refrain from doing 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 refraining from doing ERC because 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 ever done it before 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 company your accountant no your accountant’s never done this prior to unless you have an account that entered into this business and bottom line my firm Kevin has actually been in business because 2009 and we have actually been dealing with the federal government and the state government to recover money for Fortune 500 Fortune 1000 companies so a lot of our big big corporate clients have worked with bottom line to recover 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 employees on their payroll. The credit is 50% of approximately $10,000 in wages paid by an.
employer whose company is totally or partly suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
1. The credit is offered to all employers no matter size consisting of tax exempt organizations. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
organizations who take Small Business Loans.
2. To certify, the employer needs to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’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 listed 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 certify.
after completion of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the certifying wages paid up to $10,000 in total.
It works for salaries paid after March 13th and prior to December 31, 2020.
The meaning of certifying salaries differs by whether an employer had, usually, more or less than.
100 staff members in 2019.
Business that focus on ERC filing assistance generally supply expertise and assistance to assist organizations navigate the complex process of claiming the credit. They can offer various services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Cares Act 2022
Eligibility Evaluation: These business will examine your company’s eligibility for the ERC based upon aspects such as your market, income, and operations. They can assist determine if you satisfy the requirements for the credit and recognize the optimum credit quantity you can claim.
Paperwork and Computation: ERC filing services will assist in collecting the necessary paperwork, such as payroll records and financial statements, to support your claim. They will also assist calculate the credit amount based on qualified wages and other certifying costs.
Retroactive Claim Review: If you are qualified to declare the ERC for prior quarters, these business can review your past payroll records and financials to recognize potential opportunities for retroactive credits. They can assist you amend previous income tax return to claim these refunds.
Filing Help: Companies concentrating on ERC filings will prepare and send the needed kinds and documentation on your behalf. This includes finishing Type 941 or any other necessary tax forms.
Compliance and Updates: ERC regulations and guidance have evolved in time. These business stay updated with the latest changes and make sure that your filings adhere to the most current guidelines. If the IRS demands additional details or performs an audit related to your ERC claim, they can likewise offer continuous assistance.
It is very important to research and vet any company providing ERC filing help to guarantee their reliability and knowledge. Try to find established companies with experience in tax and payroll services, or consider reaching out to relied on accounting companies or tax specialists who use ERC filing support.
Keep in mind that while these companies can provide valuable support, it’s always an excellent idea to have a fundamental understanding of the ERC requirements and procedure yourself. This will help you make informed decisions and make sure accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief procedures. The objective of the ERC is to motivate organizations to keep 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 readily available to eligible employers, consisting of for-profit organizations, tax-exempt organizations, and certain governmental entities. To qualify, employers must satisfy one of two criteria:.
Business operations were totally or partially suspended due to a government order related to COVID-19.
The business experienced a substantial decline 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 decline is specified as a 20% decline in gross invoices 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 amounts to a percentage (approximately 70%) of certified earnings paid to workers, consisting of specific health plan expenses. 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, organizations that got an Income Security Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 allows businesses to claim the ERC even if they received a PPP loan. Nevertheless, the very same wages can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and boosted, allowing eligible employers to claim the credit for certified earnings paid as far back as March 13, 2020. This retroactive provision supplies an opportunity for organizations to change prior-year income tax return and get refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their employment tax returns, generally Kind 941. The excess can be refunded to the company if the credit goes beyond the quantity of work taxes owed.
It is very important to keep in mind that the ERC provisions and eligibility requirements have actually developed with time. The best course of action is to consult with a tax professional or visit the main IRS website for the most detailed and up-to-date information regarding the ERC, including any current legislative changes or updates.
To receive the ERC, a business should satisfy one of the following criteria:.
The business operations were completely or partly suspended due to a government order related to COVID-19.
Business experienced a significant decline in gross invoices. 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 defined as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the immediately preceding quarter.
The ERC is available to businesses of all sizes, consisting of tax-exempt companies, but there are some exceptions. For example, federal government entities and companies that got a PPP loan might have limitations on declaring the credit.
The process for declaring the ERC involves completing the necessary kinds and including the credit on your work tax return (usually Type 941). The exact time it takes to process the credit can differ based upon a number of factors, including the complexity of your service and the workload of the IRS. It’s advised to seek advice from a tax professional for assistance particular to your circumstance.
There are a number of companies that can help with the procedure of declaring the ERC. These consist of accounting companies, tax advisory services, and payroll provider. Some popular business that use support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research study and contact these business straight to inquire about their costs and services.
Please note that the info offered here is based upon general understanding and may not reflect the most current updates or changes to the ERC. It is very important to speak with a tax expert or check out the main IRS website for the most accurate and up-to-date details relating to eligibility, declaring treatments, and offered help.
Less than 100. The credit is based if the company had 100 or fewer workers on average in 2019.
on incomes paid to all workers whether they actually worked or not. In other words, even if the.
employees worked full-time and earned money for full-time work, the company still gets the credit.
Greater than 100. The credit is if the employer had more than 100 employees on average in 2019.
enabled only for salaries paid to employees who did not work during the calendar quarter.
In both cases, “earnings” consists of not just money payments but also a part of the cost of company.
supplied health care. Employee Retention Credit Cares Act 2022
Companies can be immediately repaid for the credit by minimizing the quantity of payroll taxes they.