Lets talk first about Employee Retention Credit Gross Receipts Cash Basis :
Our team here what do these guys doing everyone in this space is assisting teach people about ERC and uh always supply a lovely breakfast and have individuals really find out about the program we must head to the room where we are able to show some of the checks that we are getting for companies and I wish 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 verifying that the check is on the way I indicate you understand if you just begin 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 mean it’s just I indicate think of the number of real clients that went through the program yeah this is the very end this is the celebration at the end when the check is confirmed the numbers are validated and the check is on the mail in the mail from the IRS heading to the customer so that’s how you have the ability to track it you know when you
receive this you know the check is gone for sure and that’s when they pay so they don’t pay anything till they really receive the money they do not pay bottom line Wonder trust anything till this letter is validated the check is on the method they transfer it into their bank account and they can really rely on Wonder trust that the procedure has actually been ended up and the number of you believe you’ve processed because 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 and that’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 Fantastic here you’re at my YouTube channel we’re speaking about something really crucial today the staff member retention credit which the majority of you have actually never ever become aware of I certainly hadn’t heard of it up until very just recently and found out a lot about it since this is probably the most affordable cost of capital for any small business anywhere
anytime if you have staff members between five and five hundred so I have actually got the specialist with me this is Josh Fox he’s the creator and CEO of bottom line Concepts they’re the biggest processor of these ERC credits this is a 170 page program so it’s challenging this isn’t like PPP we just contact your bank supervisor and state offer me a loan it does not 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 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 begin there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act used businesses 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 huge difference 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 all right go on sorry I simply have to make certain we got that point I indicate that’s a huge difference a loan versus cash money I like cash money 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 original cares Act is the ERC and yes Kevin it is a lovely hard check in the mail where you get actual cash from the internal revenue service all right so let’s speak about how it works because it seems like to me if it’s a if it’s employee 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 individuals on the cap table not for investors it’s for staff members right you needed to have actually owned a service but it’s based upon you having W-2 workers 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 right so there were six quarters the program was open well stroll us through the 6 quarters so you had quarters two 3 and 4 of 2020 and you had quarters one two and three of 2021. fine so that’s how it’s determined you have to be on the W-2 during that period now let’s talk my favorite part money just how much can you get back per employee that was on a W-2 in those six quarters so the computation in 2020 to be precise Kevin is 50 of the worker’s wage to a maximum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers escalated to 70 of the employee’s salary to an optimum of seven thousand per quarter how did that take place um they just altered the rules in.
2021 versus since the turmoil 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 up to five thousand Max and then what happens 21 000 Max in 2021 oh that’s how you develop 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 caveat here the PPP cash would have to be reduced from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would lower the 26 000 so what we’re seeing usually 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 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 nobody understand about this due to the fact that appearance when I first found out about 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 significant advocate for entrepreneurship in America and make many numerous investments in entrepreneurs of which many suffered through the pandemic when I initially heard about this I called BS I do not believe it because I use the PPP we went through the money 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 wisely to stay alive during the pandemic so when I heard about this I said nah it can’t be true however when I dug around I even called to my political leader buddies Guv Senators they didn’t understand about it I indicate that’s how you understand that’s how false information is that there’s no info out there then a bunch of people told me well you can’t get it due to the fact that you took the PPP also not true so let’s ask Josh why does nobody understand about the employee retention credit you understand what’s intriguing you’re discussing the banks Kevin due to the fact that in the PPP loan procedure the federal government made it extremely 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 procedure process that’s all um and here there was turmoil due to the fact that keep in mind in the initial cares act you could refrain from doing both programs so if you had done PPP you could refrain from doing ERC in the original 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 ever made it clear to anyone about how to.
do this does your CFO understand how to do this not actually 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 business your accounting professional no your accountant’s never ever done this before unless you have an account that went into this business and bottom line my company Kevin has been in business because 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 lot of our big big corporate clients have worked with bottom line to recuperate other government programs we’ve done sales tax and use tax unemployment tax work chance tax credits research and development tax credits unclaimed home real estate tax all of these other federal government programs.
The worker retention tax credit is a broad based refundable tax credit created to encourage.
employers to keep employees on their payroll. The credit is 50% of as much as $10,000 in wages paid by an.
company whose service is totally or partly suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is offered to all companies despite size including tax exempt companies. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) small.
companies who take Small company Loans.
2. To qualify, the employer needs to satisfy one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s organization is fully or partly suspended by government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross invoices are listed below 50% of the equivalent quarter in 2019. Once the.
employer’s gross invoices go above 80% of an equivalent quarter in 2019 they no longer qualify.
after the end of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the qualifying salaries paid up to $10,000 in total.
It works for wages paid after March 13th and before December 31, 2020.
The meaning of qualifying wages varies by whether an employer had, usually, basically than.
100 staff members in 2019.
Business that specialize in ERC filing support generally supply competence and assistance to assist services navigate the intricate procedure of declaring the credit. They can use different services, including:.
How is the employee retention credit calculated? Employee Retention Credit Gross Receipts Cash Basis
Eligibility Evaluation: These companies will evaluate your business’s eligibility for the ERC based on elements such as your market, profits, and operations. If you fulfill the requirements for the credit and identify the maximum credit amount you can claim, they can assist determine.
Documentation and Calculation: ERC filing services will help in gathering the necessary documentation, such as payroll records and financial statements, to support your claim. They will also help calculate the credit amount based on eligible wages and other certifying expenditures.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for previous quarters, these business can examine your previous payroll records and financials to recognize prospective opportunities for retroactive credits. They can assist you amend previous tax returns to claim these refunds.
Filing Assistance: Companies concentrating on ERC filings will prepare and send the needed forms and documentation in your place. This consists of finishing Kind 941 or any other required tax return.
Compliance and Updates: ERC guidelines and assistance have actually evolved in time. These companies remain upgraded with the current changes and make sure that your filings comply with the most current guidelines. They can likewise provide ongoing assistance if the IRS requests extra information or conducts an audit related to your ERC claim.
It is very important to research study and veterinarian any business providing ERC filing assistance to ensure their credibility and proficiency. Try to find recognized companies with experience in tax and payroll services, or think about connecting to relied on accounting firms or tax experts who offer ERC submitting support.
Remember that while these companies can offer valuable support, it’s always a great idea to have a fundamental understanding of the ERC requirements and process yourself. This will help you make informed decisions and ensure precise filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief procedures. The goal of the ERC is to motivate services to retain and pay their workers during the pandemic, even if their operations have actually been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to qualified companies, including for-profit businesses, tax-exempt companies, and particular governmental entities. To certify, employers should satisfy one of two criteria:.
The business operations were fully or partly suspended due to a federal government order related to COVID-19.
Business experienced a considerable decrease in gross invoices. As mentioned previously, for 2021, a considerable decrease is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross receipts compared to the right away preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit amount amounts to a portion (up to 70%) of certified incomes paid to employees, consisting of specific health plan expenses. The maximum credit per staff member is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, services that got an Income Security Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 allows businesses to declare the ERC even if they received a PPP loan. The same salaries can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively broadened and improved, enabling qualified employers to claim the credit for certified earnings paid as far back as March 13, 2020. This retroactive arrangement provides a chance for services to amend prior-year tax returns and get refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their work tax returns, usually Kind 941. If the credit surpasses the amount of employment taxes owed, the excess can be reimbursed to the employer.
It is very important to note that the ERC provisions and eligibility criteria have progressed gradually. The very best course of action is to talk to a tax expert or go to the main IRS website for the most detailed and current details relating to the ERC, including any recent legislative changes or updates.
To receive the ERC, a service needs to fulfill one of the following requirements:.
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 considerable 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 defined as a 20% decline in gross receipts compared to the exact same quarter in 2019, or a 20% decline in gross invoices compared to the instantly preceding quarter.
The ERC is available to services of all sizes, consisting of tax-exempt companies, but there are some exceptions. Government entities and companies that received a PPP loan may have constraints on claiming the credit.
The process for declaring the ERC includes finishing the needed kinds and including the credit on your work tax return (typically Form 941). The exact time it takes to process the credit can differ based on a number of factors, consisting of the complexity of your business and the work of the IRS. It’s advised to speak with a tax professional for guidance specific to your circumstance.
There are numerous business that can aid with the procedure of claiming the ERC. These include accounting companies, 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 call these business directly to inquire about their costs and services.
Please keep in mind that the info offered here is based upon general knowledge and may not show the most current updates or changes to the ERC. It is essential to speak with a tax professional or visit the official internal revenue service website for the most accurate and up-to-date details regarding eligibility, claiming treatments, and readily available assistance.
Less than 100. The credit is based if the company had 100 or fewer workers on average in 2019.
on salaries paid to all employees whether they actually worked or not. In other words, even if the.
employees worked full time and made money for full-time work, the employer still gets the credit.
Greater than 100. The credit is if the company had more than 100 employees on average in 2019.
allowed only for earnings paid to employees who did not work during the calendar quarter.
In both cases, “wages” includes not simply money payments but also a portion of the cost of company.
provided healthcare. Employee Retention Credit Gross Receipts Cash Basis
Companies can be right away repaid for the credit by reducing the amount of payroll taxes they.