Lets talk first about Employee Retention Credit Under The Cares Act :
Our group here what do these people doing everyone in this space is helping teach people about ERC and uh always provide a beautiful breakfast and have individuals truly learn more about the program we must head to the space where we are able to display a few of the checks that we are getting for business and I ‘d like 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 clients verifying that the check is on the way I indicate you understand 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 imply it’s simply I suggest think of the number of real customers that went through the program yeah this is the very end this is the party at the end when the check is validated the numbers are confirmed and the check is on the mail in the mail from the IRS heading to the client so that’s how you have the ability to track it you understand when you
receive this you understand the check is chosen sure which’s when they pay so they don’t pay anything till they in fact receive the money they do not pay bottom line Wonder trust anything till this letter is confirmed the check is on the method they deposit it into their savings account and they can genuinely trust Wonder trust that the procedure has been finished and how many you believe you have actually processed considering that you started this we have to do with 35 000 of these for
about six billion dollars wow so clearly they understand what they’re doing and that’s what you need you need 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 essential today the employee retention credit which most of you have actually never ever heard of I definitely had not become aware of it till extremely just recently and discovered a lot about it because this is probably the lowest expense of capital for any small company anywhere
anytime if you have staff members between 5 and five hundred so I have actually 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 manager and state offer 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 become yes the Ambassador and paid spokesperson for this I enjoy this program it’s disappearing soon you got to discover everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply start there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act offered organizations 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everyone it makes a big difference right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the cash money payroll tax refund all right go on sorry I simply need to make sure we got that point I indicate that’s a big distinction a loan versus cash money I like cash cash that’s what we’re talking about okay 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 difficult check in the mail where you get actual money from the IRS all right so let’s speak about how it works since it seems like to me if it’s a if it’s staff member retention credit that person needed to be a staff member so I’m going to make the Presumption this money is not for the owner not for people on the cap table not for shareholders it’s for workers right you needed to have owned a company however 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 qualified 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 proper so there were six quarters the program was open well stroll us through the 6 quarters so you had quarters two three and four of 2020 and you had quarters one 2 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 money how much can you return per worker that was on a W-2 in those 6 quarters so the estimation in 2020 to be exact Kevin is 50 of the employee’s salary to an optimum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the worker’s salary to a maximum of seven thousand per quarter how did that take place um they simply altered the rules in.
2021 versus because 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 approximately 5 thousand Max and then what happens 21 000 Max in 2021 oh that’s how you create twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per employee that is because that’s a lot of cash it is now there’s a caveat here the PPP money would have to be reduced from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would reduce the 26 000 so what we’re seeing typically Kevin is if you took PPP cash someplace around 10 thousand dollars an individual so let’s state hypothetically you owned a dining establishment in New york city City where I’m from and you had a hundred staff members and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s substantial clearly now the big question is why does nobody understand about this since look when I first became aware of this when I first fulfilled Josh you know I’ve got lots of financial investments in great deals of companies I’m a major advocate for entrepreneurship in America and make numerous lots of investments in business owners of which numerous suffered through the pandemic when I initially became aware of this I called BS I do not 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 should have and we utilized them carefully to stay alive throughout the pandemic so when I heard about this I stated nah it can’t hold true but when I dug around I even contacted us to my politician good friends Guv Senators they didn’t learn about it I suggest that’s how you know that’s how false information 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 also not true so let’s ask Josh why does no one learn about the employee retention credit you know what’s interesting you’re speaking about the banks Kevin due to the fact that in the PPP loan process 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 big 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 just process process that’s all um and here there was turmoil since keep in mind in the initial cares act you could refrain from doing both programs so if you had actually done PPP you might 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 ever made it clear to any person about how to.
do this does your CFO understand how to do this not actually she or he’s never ever done it previously 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 accountant no your accountant’s never done this before unless you have an account that entered into this business and bottom line my company Kevin has actually stayed in business considering that 2009 and we have actually been working with the federal government and the state government to recover money for Fortune 500 Fortune 1000 business so a great deal of our big huge corporate customers have worked with bottom line to recuperate other federal government programs we have actually done sales tax and use tax unemployment tax work opportunity tax credits research and development tax credits unclaimed home real estate tax all of these other federal government programs.
The staff member retention tax credit is a broad based refundable tax credit developed to motivate.
employers to keep workers on their payroll. The credit is 50% of as much as $10,000 in salaries paid by an.
employer whose organization is completely or partly suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is available to all employers regardless of size consisting of tax exempt organizations. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
businesses who take Small company Loans.
2. To qualify, the employer has to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s service is completely or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are below 50% of the similar quarter in 2019. As soon as the.
employer’s gross invoices exceed 80% of a similar quarter in 2019 they no longer qualify.
after the end of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the qualifying earnings paid up to $10,000 in total.
It works for incomes paid after March 13th and before December 31, 2020.
The meaning of certifying salaries differs by whether a company had, on average, basically than.
100 staff members in 2019.
Companies that specialize in ERC filing help usually provide know-how and support to help companies navigate the complicated procedure of claiming the credit. They can provide various services, including:.
How is the employee retention credit calculated? Employee Retention Credit Under The Cares Act
Eligibility Assessment: These companies will assess your organization’s eligibility for the ERC based on factors such as your industry, revenue, and operations. If you meet the requirements for the credit and determine the maximum credit amount you can declare, they can help determine.
Documentation and Calculation: ERC filing services will assist in gathering the essential documentation, such as payroll records and financial statements, to support your claim. They will likewise help compute the credit amount based upon qualified incomes and other qualifying expenditures.
Retroactive Claim Evaluation: If you are eligible to claim the ERC for previous quarters, these business can evaluate your previous payroll records and financials to recognize potential opportunities for retroactive credits. They can help you modify prior tax returns to declare these refunds.
Filing Assistance: Companies focusing on ERC filings will prepare and send the essential forms and documents in your place. This consists of finishing Type 941 or any other necessary tax return.
Compliance and Updates: ERC regulations and assistance have developed with time. These companies stay upgraded with the most recent modifications and guarantee that your filings adhere to the most existing guidelines. If the Internal revenue service requests additional info or performs an audit related to your ERC claim, they can likewise supply ongoing assistance.
It is necessary to research and vet any company offering ERC filing assistance to guarantee their credibility and knowledge. Look for established companies with experience in tax and payroll services, or consider connecting to relied on accounting companies or tax specialists who offer ERC filing support.
Remember that while these business can provide valuable help, it’s always a good concept to have a fundamental understanding of the ERC requirements and process yourself. This will assist you make informed choices and guarantee accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief measures. The goal of the ERC is to encourage companies to keep and pay their workers during the pandemic, even if their operations have actually been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to eligible employers, including for-profit organizations, tax-exempt organizations, and certain governmental entities. To qualify, employers must meet one of two requirements:.
The business operations were fully or partly suspended due to a federal government order related to COVID-19.
The business experienced a significant decline in gross invoices. As mentioned earlier, 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 considerable decrease is specified 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 immediately preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount is equal to a percentage (as much as 70%) of qualified earnings paid to staff members, consisting of specific health insurance costs. 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, services that received an Income Security Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 permits services to declare 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 Provision: The ERC has been retroactively broadened and enhanced, allowing qualified employers to declare the credit for qualified salaries paid as far back as March 13, 2020. This retroactive provision offers a chance for organizations to change prior-year income tax return and get refunds.
Claiming the Credit: Companies can declare the ERC by reporting it on their work tax returns, normally Form 941. The excess can be refunded to the employer if the credit goes beyond the amount of employment taxes owed.
It’s important to keep in mind that the ERC provisions and eligibility requirements have developed over time. The best strategy is to consult with a tax professional or visit the main internal revenue service site for the most updated and comprehensive details relating to the ERC, consisting of any recent legislative changes or updates.
To qualify for the ERC, a business needs to fulfill among the following requirements:.
The business operations were completely or partly suspended due to a government order related to COVID-19.
The business experienced a considerable decrease in gross invoices. For 2021, a significant decline is specified as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross invoices compared to the right away preceding quarter.
The ERC is offered to organizations of all sizes, including tax-exempt organizations, however there are some exceptions. Government entities and organizations that received a PPP loan may have constraints on declaring the credit.
The process for claiming the ERC involves completing the needed kinds and including the credit on your employment tax return (normally Kind 941). The exact time it requires to process the credit can vary based upon a number of elements, consisting of the complexity of your organization and the work of the internal revenue service. It’s suggested to seek advice from a tax professional for guidance particular to your situation.
There are numerous companies that can help with the process of claiming the ERC. Some widely known companies that provide support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the details offered here is based upon general understanding and may not reflect the most current updates or changes to the ERC. It is essential to talk to a tax expert or check out the official IRS website for the most accurate and up-to-date details concerning eligibility, claiming treatments, and available assistance.
Less than 100. If the company had 100 or fewer employees typically in 2019, then the credit is based.
on salaries paid to all staff members whether they in fact worked or not. Simply put, even if the.
employees worked full time and got paid for full-time work, the employer 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 earnings paid to workers who did not work throughout the calendar quarter.
In both cases, “wages” includes not simply money payments however likewise a part of the expense of employer.
supplied health care. Employee Retention Credit Under The Cares Act
Companies can be right away reimbursed for the credit by reducing the amount of payroll taxes they.