Lets talk first about Employee Retention Credit Tax Reporting :
Our group here what do these men doing everyone in this space is assisting teach individuals about ERC and uh constantly offer a stunning breakfast and have people actually find out about the program we ought to head to the space where we are able to display some of the checks that we are getting for business and I want to see that what is this this is uh hundreds of millions of dollars actually Kevin numerous countless dollars so these are duplicate copies of the letters that go to clients verifying that the check is on the method I mean you understand if you just 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 indicate it’s just I indicate consider how many 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’re able to track it you understand when you
receive this you know the check is chosen sure which’s when they pay so they don’t pay anything up until they in fact get the cash they do not pay bottom line Wonder trust anything up until this letter is verified the check is on the way they deposit it into their savings account and they can truly trust Wonder trust that the procedure has actually been completed and the number of you believe you’ve processed considering that you began this we have to do with 35 000 of these for
about six billion dollars wow so plainly they know 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 Terrific here you’re at my YouTube channel we’re discussing something truly important today the employee retention credit which most of you have actually never ever heard of I definitely had not become aware of it up until really recently and learned a lot about it due to the fact that this is most likely the most affordable expense of capital for any small company anywhere
anytime if you have employees in between 5 and five hundred so I’ve got the professional with me this is Josh Fox he’s the founder and CEO of bottom line Concepts they’re the biggest processor of these ERC credits this is a 170 page program so it’s difficult this isn’t like PPP we just phone your bank manager 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 become yes the Ambassador and paid representative for this I like this program it’s going away soon you got to learn all about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply begin there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act used businesses 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody it makes a big difference right there two 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 all right go on sorry I simply need to ensure we got that point I indicate that’s a huge difference a loan versus cash money I like money money that’s what we’re speaking about 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 original cares Act is the ERC and yes Kevin it is a gorgeous tough check in the mail where you get real money from the internal revenue service all right so let’s speak about how it works since it seems like to me if it’s a if it’s employee retention credit that individual needed to be a staff member so I’m going to make the Assumption this cash is not for the owner not for individuals on the cap table not for investors it’s for employees right you had to have actually owned a business but it’s based on you having W-2 workers 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 very first six months of 2021 on the W-2 correct so there were 6 quarters the program was open well stroll us through the 6 quarters so you had quarters 2 3 and four of 2020 and you had quarters one two and three of 2021. okay so that’s how it’s measured you need to be on the W-2 throughout that period now let’s talk my preferred part cash just how much can you return per employee that was on a W-2 in those 6 quarters so the calculation in 2020 to be specific Kevin is 50 of the worker’s income to a maximum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the employee’s income to an optimum of 7 thousand per quarter how did that happen um they simply changed the rules in.
2021 versus because the turmoil of the pandemic so they wished 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 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 because that’s a great deal of money it is now there’s a caution here the PPP money would need 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 dining establishment in New york city 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 certainly now the huge concern is why does no one understand about this since appearance when I initially heard about this when I initially satisfied Josh you understand I’ve got lots of financial investments in great deals of business I’m a major supporter for entrepreneurship in America and make numerous numerous investments in business owners of which lots of suffered through the pandemic when I initially became aware of this I called BS I do not believe it due to the fact that I utilize 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 and that were well deserved and we used them wisely to survive during the pandemic so when I found out about this I said nah it can’t hold true but when I dug around I even contacted us to my political leader good friends Governor Senators they didn’t learn about it I imply that’s how you understand that’s how misinformation is that there’s no information out there then a lot of individuals informed me well you can’t get it since you took the PPP likewise not real so let’s ask Josh why does nobody learn about the staff member retention credit you understand what’s fascinating you’re talking about the banks Kevin since 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 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 just procedure procedure that’s all um and here there was turmoil because remember in the original 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 altered the law in 2021 the banks were refraining from doing ERC due to the fact that 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 truly he or she’s never ever done it previously do the banks do it nope the banks do not do it the payroll companies yeah some of them are doing it as a payroll company your accountant no your accounting professional’s never done this prior to unless you have an account that entered into this service and bottom line my company Kevin has actually been in business since 2009 and we have actually been dealing with the federal government and the state government to recover money for Fortune 500 Fortune 1000 business so a great deal of our huge huge business clients have worked with bottom line to recover other government programs we have actually done sales tax and utilize tax unemployment tax work chance 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 designed to motivate.
companies to keep workers on their payroll. The credit is 50% of approximately $10,000 in incomes paid by an.
Due to the fact that of COVID-19 or whose gross invoices, employer whose organization is totally or partially suspended.
decline by more than 50%.
1. The credit is offered to all employers despite size including tax exempt organizations. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
companies who take Small Business 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 business is fully or partly suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross receipts are below 50% of the comparable quarter in 2019. Once the.
employer’s gross invoices exceed 80% of a comparable quarter in 2019 they no longer qualify.
after the end of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the certifying wages paid up to $10,000 in overall.
It works for incomes paid after March 13th and before December 31, 2020.
The definition of certifying wages varies by whether a company had, usually, basically than.
100 staff members in 2019.
Companies that focus on ERC filing assistance generally offer competence and support to assist services browse the complex procedure of declaring the credit. They can provide numerous services, including:.
How is the employee retention credit calculated? Employee Retention Credit Tax Reporting
Eligibility Evaluation: These companies will evaluate your service’s eligibility for the ERC based upon elements such as your industry, earnings, and operations. They can assist determine if you meet the requirements for the credit and determine the optimum credit amount you can declare.
Documents and Calculation: ERC filing services will help in collecting the needed paperwork, such as payroll records and monetary declarations, to support your claim. They will likewise assist calculate the credit quantity based upon eligible incomes and other certifying expenditures.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for prior quarters, these companies can review your past payroll records and financials to identify possible opportunities for retroactive credits. They can help you modify previous tax returns to claim these refunds.
Filing Assistance: Companies focusing on ERC filings will prepare and submit the required types and documentation in your place. This includes finishing Kind 941 or any other necessary tax forms.
Compliance and Updates: ERC regulations and assistance have actually developed gradually. These business remain updated with the latest changes and ensure that your filings adhere to the most current guidelines. If the Internal revenue service demands additional information or conducts an audit associated to your ERC claim, they can also provide ongoing assistance.
It is very important to research and vet any company offering ERC filing assistance to ensure their credibility and knowledge. Try to find established firms with experience in tax and payroll services, or consider reaching out to trusted accounting companies or tax experts who use ERC filing support.
Keep in mind that while these companies can supply valuable support, it’s constantly a good concept to have a fundamental understanding of the ERC requirements and process yourself. This will help you make notified choices and ensure accurate filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief procedures. The objective of the ERC is to encourage services to maintain and pay their employees during the pandemic, even if their operations have been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is available to eligible companies, including for-profit businesses, tax-exempt organizations, and particular governmental entities. To qualify, companies must satisfy one of two requirements:.
Business operations were completely or partially suspended due to a federal government order related to COVID-19.
The business experienced a substantial decline in gross receipts. As discussed earlier, for 2021, a substantial decline is defined as a 20% decline in gross receipts compared to the exact 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% decline in gross invoices 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 is equal to a portion (approximately 70%) of certified earnings paid to staff members, including specific health plan expenses. 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 received a Paycheck Security Program (PPP) loan were not eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 permits businesses to declare the ERC even if they received a PPP loan. However, the very same earnings can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and boosted, enabling qualified employers to declare the credit for qualified wages paid as far back as March 13, 2020. This retroactive provision provides a chance for organizations to change prior-year tax returns and receive refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their work income tax return, typically Kind 941. If the credit surpasses the amount of employment taxes owed, the excess can be reimbursed to the company.
It’s important to note that the ERC arrangements and eligibility requirements have actually progressed with time. The very best strategy is to seek advice from a tax expert or check out the official internal revenue service website for the most up-to-date and comprehensive details relating to the ERC, including any current legislative changes or updates.
To receive the ERC, a business must meet among the following criteria:.
The business operations were totally or partially suspended due to a government order related to COVID-19.
Business experienced a substantial decrease in gross receipts. For 2021, a considerable decline is specified as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decline in gross invoices compared to the very same quarter in 2019, or a 20% decline in gross invoices compared to the instantly preceding quarter.
The ERC is offered to companies of all sizes, including tax-exempt organizations, however there are some exceptions. Federal government entities and businesses that received a PPP loan may have limitations on claiming the credit.
The process for claiming the ERC involves completing the needed kinds and consisting of the credit on your work tax return (generally Type 941). The exact time it takes to process the credit can vary based upon numerous factors, consisting of the intricacy of your organization and the workload of the internal revenue service. It’s recommended to talk to a tax professional for assistance particular to your scenario.
There are several business that can aid with the procedure of claiming the ERC. These include accounting companies, tax advisory services, and payroll provider. Some well-known companies that use help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research and call these business directly to ask about their fees and services.
Please keep in mind that the information supplied here is based upon basic knowledge and may not show the most recent updates or changes to the ERC. It’s important to talk to a tax expert or visit the main IRS website for the most updated and precise details concerning eligibility, claiming procedures, and offered support.
Less than 100. The credit is based if the company had 100 or less workers on average in 2019.
on earnings paid to all workers whether they actually worked or not. In other words, even if the.
staff members worked full-time and got paid for full time work, the company 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 earnings paid to staff members who did not work throughout the calendar quarter.
In both cases, “earnings” includes not simply money payments however likewise a portion of the cost of employer.
provided healthcare. Employee Retention Credit Tax Reporting
Employers can be right away compensated for the credit by decreasing the amount of payroll taxes they.