Lets talk first about Employee Retention Credit Vs Paycheck Protection Program :
Our group here what do these guys doing everyone in this space is helping teach individuals about ERC and uh always provide a gorgeous breakfast and have individuals actually learn about the program we ought to head to the space where we are able to display a few of the checks that we are getting for companies and I wish to see that what is this this is uh numerous millions of dollars literally Kevin numerous millions of dollars so these are duplicate copies of the letters that go to clients confirming that the check is on the way I suggest you understand if you simply begin 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 suggest it’s simply I suggest think about the number of actual clients that went through the program yeah this is the very end this is the party at the end when the check is confirmed the numbers are verified and the check is on the mail in the mail from the internal revenue service heading to the client so that’s how you’re able to track it you know when you
get this you know the check is gone for sure and that’s when they pay so they do not pay anything till they really get the cash they don’t pay bottom line Wonder trust anything up until this letter is confirmed the check is on the method they transfer it into their savings account and they can genuinely trust Wonder trust that the procedure has been completed and the number of you think you have actually processed given that you started this we have to do with 35 000 of these for
about 6 billion dollars wow so plainly they understand what they’re doing and that’s what you require you need professionals 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 discussing something actually essential today the worker retention credit which most of you have actually never ever become aware of I certainly had not heard of it till extremely just recently and learned a lot about it since this is most likely the lowest cost of capital for any small business anywhere
anytime if you have staff members in between five and five hundred so I’ve got the expert with me this is Josh Fox he’s the creator and CEO of bottom line Ideas 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 contact your bank manager and say 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’ve become yes the Ambassador and paid representative for this I like 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 start there so throughout the Trump Administration when President Trump was enacted they developed the cares Act and the cares act used services 3 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 distinction right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the cash cash payroll tax refund fine go on sorry I just have to ensure we got that point I mean 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 stunning difficult check in the mail where you get actual money 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 an employee so I’m going to make the Assumption this cash is not for the owner not for individuals on the cap table not for shareholders it’s for workers right you had to have actually owned an organization however it’s based upon you having W-2 employees 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 eligible 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 correct so there were 6 quarters the program was open well walk us through the six quarters so you had quarters two three 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 duration now let’s talk my favorite part money how much can you get back per worker that was on a W-2 in those 6 quarters so the computation in 2020 to be precise Kevin is 50 of the worker’s wage to an optimum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers escalated to 70 of the worker’s salary to a maximum of seven thousand per quarter how did that occur um they just changed the rules in.
2021 versus since the mayhem 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 six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty six thousand dollars per staff member that is since that’s a lot of money it is now there’s a caution here the PPP cash would have to be lowered from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would decrease the 26 000 so what we’re seeing on average 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 where I’m from and you had a hundred staff members and you took PPP money you would still get a million dollar in the mail from the IRS so it’s big undoubtedly now the big question is why does nobody learn about this due to the fact that look when I first became aware of this when I first met Josh you understand I’ve got lots of investments in lots of companies I’m a significant supporter for entrepreneurship in America and make many many investments in business owners of which lots of suffered through the pandemic when I first became aware of this I called BS I do not think it since I use the PPP we went through the money 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 should have and we used them wisely to survive throughout the pandemic so when I found out about this I stated nah it can’t be true however when I dug around I even called to my politician pals Guv Senators they didn’t know about it I indicate that’s how you know that’s how false information is that there’s no details out there then a lot 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 no one know about the staff member retention credit you know what’s interesting you’re speaking about the banks Kevin because 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 country and they would process procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply process process that’s all um and here there was mayhem since remember in the initial cares act you might not do both programs so if you had actually done PPP you might not do ERC in the original program and when they changed the law in 2021 the banks were refraining from doing ERC since 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 truly he or she’s never ever done it in the past do the banks do it nope the banks do not do it the payroll companies yeah a few of them are doing it as a payroll company your accounting professional no your accounting professional’s never ever done this before unless you have an account that entered into this organization and bottom line my firm Kevin has been in business given that 2009 and we’ve been working with the federal government and the state federal government to recuperate money for Fortune 500 Fortune 1000 companies so a great deal of our huge huge business clients have dealt with bottom line to recuperate other federal government programs we have actually done sales tax and use tax joblessness tax work chance tax credits research and development tax credits unclaimed property property tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit developed to encourage.
companies to keep staff members on their payroll. The credit is 50% of approximately $10,000 in incomes paid by an.
company whose business is totally or partly suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is readily available to all employers regardless of size consisting of tax exempt companies. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
companies who take Small Business Loans.
2. To certify, the employer needs to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s company is fully or partially suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are listed below 50% of the similar quarter in 2019. As soon as the.
company’s gross invoices exceed 80% of a comparable quarter in 2019 they no longer certify.
after completion of that quarter.
Computation of the Credit.
The quantity of the credit is 50% of the certifying earnings paid up to $10,000 in overall.
It works for salaries paid after March 13th and before December 31, 2020.
The meaning of certifying salaries differs by whether an employer had, on average, more or less than.
100 staff members in 2019.
Companies that specialize in ERC filing assistance normally offer proficiency and assistance to help businesses navigate the intricate procedure of declaring the credit. They can offer different services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Vs Paycheck Protection Program
Eligibility Evaluation: These business will assess your organization’s eligibility for the ERC based on elements such as your market, income, and operations. They can assist identify if you satisfy the requirements for the credit and identify the maximum credit quantity you can claim.
Documents and Estimation: ERC filing services will assist in collecting the essential documents, such as payroll records and monetary declarations, to support your claim. They will likewise help determine the credit quantity based upon eligible earnings and other certifying expenditures.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for previous quarters, these business can review your previous payroll records and financials to recognize prospective opportunities for retroactive credits. They can assist you modify previous tax returns to claim these refunds.
Filing Support: Business specializing in ERC filings will prepare and send the required forms and documentation in your place. This consists of completing Type 941 or any other required tax forms.
Compliance and Updates: ERC regulations and guidance have actually developed over time. These business remain updated with the most recent modifications and ensure that your filings adhere to the most existing standards. If the IRS requests additional information or performs an audit associated to your ERC claim, they can also supply ongoing support.
It is essential to research study and vet any business using ERC filing support to guarantee their reliability and know-how. Look for recognized firms with experience in tax and payroll services, or consider connecting to trusted accounting companies or tax experts who use ERC submitting assistance.
Bear in mind that while these companies can provide valuable help, it’s always an excellent idea to have a basic understanding of the ERC requirements and procedure yourself. This will help you make informed choices and ensure accurate filings.
The Worker Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief measures. The goal of the ERC is to encourage businesses to keep and pay their staff members during the pandemic, even if their operations have been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to eligible employers, including for-profit businesses, tax-exempt companies, and certain governmental entities. To certify, employers must fulfill one of two criteria:.
The business operations were fully or partially suspended due to a government order related to COVID-19.
Business experienced a substantial decline in gross invoices. As pointed out previously, for 2021, a substantial decline is specified as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decline in gross invoices compared to the same quarter in 2019, or a 20% decline 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 quantity is equal to a portion (approximately 70%) of qualified wages paid to staff members, including certain health plan expenses. The optimum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, services that got a Paycheck Security Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 permits companies to declare the ERC even if they got a PPP loan. Nevertheless, the exact 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 improved, permitting qualified employers to declare the credit for qualified incomes paid as far back as March 13, 2020. This retroactive provision supplies an opportunity for companies 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, normally Type 941. The excess can be refunded to the company if the credit surpasses the amount of work taxes owed.
It is very important to note that the ERC arrangements and eligibility criteria have evolved with time. The very best strategy is to speak with a tax expert or check out the official internal revenue service site for the most comprehensive and updated info concerning the ERC, including any current legal changes or updates.
To receive the ERC, an organization needs to fulfill among the following requirements:.
The business operations were fully or partly suspended due to a government order related to COVID-19.
Business experienced a substantial decline in gross receipts. For 2021, a considerable decline is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decline in gross receipts compared to the very same quarter in 2019, or a 20% decline in gross invoices compared to the instantly preceding quarter.
The ERC is available to businesses of all sizes, consisting of tax-exempt companies, but there are some exceptions. For example, government entities and organizations that got a PPP loan may have restrictions on declaring the credit.
The process for declaring the ERC includes finishing the necessary forms and including the credit on your employment tax return (typically Form 941). The exact time it requires to process the credit can vary based on several factors, including the intricacy of your company and the workload of the IRS. It’s recommended to consult with a tax professional for assistance specific to your circumstance.
There are numerous companies that can help with the process of claiming the ERC. Some well-known business that provide support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the details offered here is based upon basic understanding and may not show the most recent updates or changes to the ERC. It is necessary to seek advice from a tax professional or check out the official IRS site for the most accurate and updated details relating to eligibility, claiming treatments, and readily available assistance.
Less than 100. The credit is based if the company had 100 or less staff members on average in 2019.
on earnings paid to all workers whether they actually 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. If the employer had more than 100 workers typically in 2019, then the credit is.
allowed just for salaries paid to employees who did not work during the calendar quarter.
In both cases, “salaries” consists of not just cash payments however also a part of the expense of company.
supplied healthcare. Employee Retention Credit Vs Paycheck Protection Program
Employers can be right away repaid for the credit by minimizing the quantity of payroll taxes they.