Lets talk first about Employee Retention Credit Tax Treatment :
Our team here what do these people doing everybody in this room is assisting teach individuals about ERC and uh always provide a gorgeous breakfast and have individuals really learn more about the program we ought to head to the space 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 numerous countless dollars literally Kevin numerous countless dollars so these are replicate copies of the letters that go to customers validating that the check is on the way I imply you know if you just start to take a look at some of these here I mean this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s simply I imply consider how many 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 internal revenue service heading to the consumer so that’s how you’re able to track it you understand when you
get this you know the check is chosen sure and that’s when they pay so they do not pay anything until they really receive the money they do not pay bottom line Wonder trust anything until this letter is validated the check is on the way they deposit it into their bank account and they can truly trust Wonder trust that the procedure has been finished and how many you think you have actually 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 need 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 talking about something truly important today the staff member retention credit which most of you have never heard of I certainly hadn’t become aware of it until extremely recently and discovered a lot about it because this is most likely the lowest expense of capital for any small business anywhere
anytime if you have staff members in between 5 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 Principles 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 simply phone your bank manager and say provide 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’ve ended up being yes the Ambassador and paid spokesperson for this I love this program it’s going away soon you got to discover everything about it let’s talk worker retention credit Josh Fox what is an ERC let’s just begin there so throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act offered organizations three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everyone 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.
correct the cash money payroll tax refund fine go on sorry I just have to make certain we got that point I indicate that’s a huge difference a loan versus money cash 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 hard check in the mail where you get actual money from the IRS 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 needed to be an employee 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 workers right you had to have actually owned a service but it’s based on you having W-2 staff members in America not 10.99. As long as you had W-2 employees 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 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 two three and 4 of 2020 and you had quarters one two and 3 of 2021. fine 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 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 specific Kevin is 50 of the staff member’s wage to an optimum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the worker’s income to a maximum of 7 thousand per quarter how did that take place um they simply altered the rules in.
2021 versus due to the fact that the turmoil of the pandemic so they wanted to even get more to keep those workers 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 then what occurs 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 six thousand dollars per employee that is since that’s a lot of money it is now there’s a caveat here the PPP money would need to be lowered from the twenty 6 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 cash someplace around 10 thousand dollars a person so let’s state hypothetically you owned a restaurant in New York 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 huge question is why does no one learn about this because appearance when I initially heard about this when I initially fulfilled Josh you know I’ve got lots of financial investments in lots of companies I’m a major advocate for entrepreneurship in America and make numerous numerous financial investments in entrepreneurs of which lots of suffered through the pandemic when I first found out about this I called BS I don’t think it since 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 been worthy of and we utilized them wisely to survive throughout the pandemic so when I heard about this I said nah it can’t hold true but when I dug around I even contacted us to my political leader pals Governor Senators they didn’t understand 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 told 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 understand about the worker retention credit you know what’s fascinating you’re speaking about the banks Kevin since 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 nation and they would process procedure 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 mayhem since keep in mind in the original cares act you might refrain from doing both programs so if you had done PPP you could refrain from doing ERC in the initial program and when they changed the law in 2021 the banks were not doing ERC due to the fact that it’s not alone so you’re getting a tax refund so the government never made it clear to anybody about how to.
do this does your CFO understand how to do this not actually he or she’s never ever done it in the past do the banks do it nope the banks don’t do it the payroll business yeah a few of them are doing it as a payroll business your accountant no your accounting professional’s never ever done this prior to unless you have an account that went into this business and bottom line my company Kevin has actually stayed in business given that 2009 and we’ve been working with the federal government and the state federal government to recover cash for Fortune 500 Fortune 1000 business so a great deal of our big big business customers have worked with bottom line to recuperate other federal government programs we’ve done sales tax and utilize tax joblessness tax work chance tax credits research and development tax credits unclaimed property real estate tax all of these other government programs.
The staff member retention tax credit is a broad based refundable tax credit designed to motivate.
companies to keep employees on their payroll. The credit is 50% of approximately $10,000 in earnings paid by an.
Because of COVID-19 or whose gross receipts, employer whose business is totally or partly suspended.
decline by more than 50%.
1. The credit is offered to all employers regardless of size including tax exempt companies. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) small.
services who take Small Business Loans.
2. To qualify, the company has to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s service is completely or partly suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross invoices are listed below 50% of the similar quarter in 2019. Once the.
company’s gross receipts exceed 80% of an equivalent quarter in 2019 they no longer certify.
after completion of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the certifying salaries paid up to $10,000 in total.
It is effective for incomes paid after March 13th and prior to December 31, 2020.
The meaning of qualifying earnings varies by whether an employer had, on average, more or less than.
100 workers in 2019.
Business that focus on ERC filing support usually offer competence and support to help organizations navigate the complex process of claiming the credit. They can use numerous services, including:.
How is the employee retention credit calculated? Employee Retention Credit Tax Treatment
Eligibility Evaluation: These companies will evaluate your company’s eligibility for the ERC based on aspects such as your market, revenue, and operations. If you satisfy the requirements for the credit and recognize the optimum credit quantity you can claim, they can assist identify.
Documents and Calculation: ERC filing services will help in gathering the essential documentation, such as payroll records and monetary statements, to support your claim. They will also help determine the credit amount based upon eligible salaries and other qualifying expenses.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for previous quarters, these business can evaluate your past payroll records and financials to recognize possible opportunities for retroactive credits. They can help you amend previous tax returns to declare these refunds.
Filing Assistance: Business focusing on ERC filings will prepare and submit the necessary types and paperwork in your place. This includes completing Form 941 or any other required tax return.
Compliance and Updates: ERC guidelines and assistance have progressed with time. These business remain upgraded with the latest changes and make sure that your filings abide by the most existing guidelines. They can also supply continuous support if the internal revenue service requests extra info or performs an audit related to your ERC claim.
It’s important to research and veterinarian any company offering ERC filing support to guarantee their trustworthiness and know-how. Search for recognized firms with experience in tax and payroll services, or think about reaching out to relied on accounting firms or tax specialists who use ERC submitting assistance.
Remember that while these business can supply valuable help, it’s constantly an excellent concept to have a basic understanding of the ERC requirements and procedure yourself. This will help you make notified choices and ensure precise filings.
The Worker 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 encourage services to retain and pay their employees throughout the pandemic, even if their operations have been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is available to qualified employers, consisting of for-profit businesses, tax-exempt companies, and certain governmental entities. To certify, employers should fulfill one of two criteria:.
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 significant decrease is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit amount is equal to a percentage (up to 70%) of certified incomes paid to workers, including specific health insurance 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: Initially, companies that received an Income Security Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 permits companies to claim the ERC even if they got a PPP loan. The exact same incomes can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and enhanced, allowing qualified employers to claim the credit for certified incomes paid as far back as March 13, 2020. This retroactive provision supplies a chance for companies to change prior-year tax returns and receive refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their employment tax returns, usually Form 941. The excess can be reimbursed to the employer if the credit surpasses the quantity of work taxes owed.
It’s important to note that the ERC arrangements and eligibility criteria have actually evolved in time. The best course of action is to speak with a tax expert or check out the main internal revenue service website for the most updated and detailed details relating to the ERC, consisting of any current legal modifications or updates.
To receive the ERC, a company needs to fulfill one of the following requirements:.
The business operations were fully or partially suspended due to a federal government order related to COVID-19.
The business experienced a significant decrease in gross invoices. For 2021, a substantial decline is specified as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
The ERC is readily available to services of all sizes, including tax-exempt organizations, but there are some exceptions. Government entities and organizations that received a PPP loan might have restrictions on claiming the credit.
The procedure for claiming the ERC involves completing the required forms and including the credit on your employment tax return (generally Kind 941). The exact time it requires to process the credit can differ based upon numerous aspects, consisting of the intricacy of your business and the workload of the internal revenue service. It’s advised to speak with a tax professional for assistance particular to your situation.
There are numerous companies that can assist with the procedure of claiming the ERC. These consist of accounting companies, tax advisory services, and payroll provider. Some well-known business that offer support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research study and contact these business directly to ask about their services and fees.
Please note that the information offered here is based upon basic understanding and may not show the most recent updates or changes to the ERC. It is very important to talk to a tax professional or check out the official IRS website for the most updated and accurate information regarding 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 salaries paid to all employees whether they really worked or not. In other words, even if the.
workers worked full time and made money for full-time work, the employer still gets the credit.
Greater than 100. The credit is if the employer had more than 100 employees on average in 2019.
allowed only for earnings paid to staff members who did not work throughout the calendar quarter.
In both cases, “wages” includes not simply money payments but also a part of the cost of employer.
supplied healthcare. Employee Retention Credit Tax Treatment
Companies can be instantly reimbursed for the credit by decreasing the amount of payroll taxes they.