Lets talk first about Employee Retention Credits Under Cares Act :
Our team here what do these guys doing everyone in this room is helping teach individuals about ERC and uh always offer a gorgeous breakfast and have individuals actually find out about the program we should head to the room where we are able to show a few of the checks that we are getting for business and I wish to see that what is this this is uh numerous millions of dollars literally Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to clients confirming that the check is on the method I indicate you understand if you simply begin to look at some of these here I suggest this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I imply it’s just I mean consider how many actual 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 consumer so that’s how you’re able to track it you understand when you
get this you understand the check is chosen sure and that’s when they pay so they do not pay anything till they really receive the money they don’t pay bottom line Wonder trust anything up until this letter is validated the check is on the way they transfer it into their bank account and they can really trust Wonder trust that the procedure has actually been finished and the number of you believe you’ve processed given that you began this we have to do with 35 000 of these for
about 6 billion dollars wow so clearly they understand what they’re doing and that’s what you require you require professionals on the other end of the phone to process this and get it to where you get among 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 staff member retention credit which the majority of you have never become aware of I definitely hadn’t become aware of it up until extremely recently and found out a lot about it because this is most likely the lowest cost of capital for any small business anywhere
anytime if you have workers 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 Ideas 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 simply call your bank manager and say give me a loan it doesn’t 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 spokesperson for this I love this program it’s going away soon you got to discover all about it let’s talk worker retention credit Josh Fox what is an ERC let’s just start there so during the Trump Administration when President Trump was enacted they created the cares Act and the cares act offered companies 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 huge distinction right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
fix the money money payroll tax refund alright go on sorry I simply need to ensure we got that point I mean that’s a huge distinction a loan versus cash money I like money money that’s what we’re discussing alright 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 initial cares Act is the ERC and yes Kevin it is a stunning difficult 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 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 employees right you had to have owned a company however it’s based on you having W-2 employees 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 need 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 proper so there were six quarters the program was open well stroll us through the six quarters so you had quarters 2 3 and 4 of 2020 and you had quarters one 2 and three of 2021. alright so that’s how it’s determined you need to be on the W-2 during that period now let’s talk my preferred part cash how much can you get back per staff member 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 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 staff member’s income to an optimum of 7 thousand per quarter how did that happen um they simply altered the rules in.
2021 versus due to the fact that the mayhem of the pandemic so they wished to even get more to keep those employees 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 after that what occurs 21 000 Max in 2021 oh that’s how you create 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 since that’s a lot of money it is now there’s a caution here the PPP cash would need to be decreased 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 a person so let’s state 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 huge clearly now the big concern is why does nobody learn about this because look when I initially became aware of this when I first fulfilled Josh you know I’ve got great deals of financial investments in great deals of business I’m a significant supporter for entrepreneurship in America and make numerous numerous investments in business owners of which lots of suffered through the pandemic when I initially found out about this I called BS I don’t think it due to the fact that I use 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 and that were well been worthy of and we used them wisely to survive throughout the pandemic so when I found out about this I stated nah it can’t hold true however when I dug around I even contacted us to my political leader friends Guv Senators they didn’t learn 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 informed me well you can’t get it because you took the PPP likewise not real so let’s ask Josh why does nobody learn about the worker retention credit you know what’s fascinating you’re discussing the banks Kevin due to the fact that in the PPP loan process the federal government made it really 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 process procedure that’s all um and here there was turmoil since keep in mind in the initial cares act you might not do both programs so if you had done PPP you might not do ERC in the initial program and when they altered the law in 2021 the banks were not doing ERC because 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 know how to do this not truly he or she’s never 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 company your accountant no your accounting professional’s never ever done this before unless you have an account that went into this organization and bottom line my firm Kevin has actually stayed in business because 2009 and we’ve been working with the federal government and the state federal government to recover cash for Fortune 500 Fortune 1000 companies so a lot of our big big business customers have dealt 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 property property tax all of these other government programs.
The worker retention tax credit is a broad based refundable tax credit created to encourage.
companies to keep employees on their payroll. The credit is 50% of approximately $10,000 in earnings paid by an.
company whose service is totally or partly suspended because of COVID-19 or whose gross invoices.
decrease by more than 50%.
1. The credit is available to all employers despite size consisting of tax exempt companies. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
services who take Small Business Loans.
2. To certify, the company has to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s business is completely or partially suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross receipts are listed below 50% of the similar quarter in 2019. When the.
employer’s gross invoices exceed 80% of an equivalent quarter in 2019 they no longer qualify.
after completion of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the qualifying earnings paid up to $10,000 in total.
It is effective for wages paid after March 13th and before December 31, 2020.
The definition of qualifying salaries varies by whether an employer had, on average, basically than.
100 workers in 2019.
Business that specialize in ERC filing help typically offer expertise and assistance to assist organizations navigate the complex process of declaring the credit. They can offer various services, including:.
How is the employee retention credit calculated? Employee Retention Credits Under Cares Act
Eligibility Assessment: These business will examine your business’s eligibility for the ERC based on aspects such as your market, earnings, and operations. If you meet the requirements for the credit and identify the optimum credit quantity you can claim, they can assist figure out.
Documents and Calculation: ERC filing services will assist in collecting the necessary paperwork, such as payroll records and monetary statements, to support your claim. They will also help compute the credit quantity based on qualified earnings and other certifying expenditures.
Retroactive Claim Evaluation: If you are eligible to claim the ERC for previous quarters, these companies can evaluate your past payroll records and financials to determine possible opportunities for retroactive credits. They can assist you change prior income tax return to declare these refunds.
Filing Support: Companies concentrating on ERC filings will prepare and send the necessary types and documentation in your place. This includes completing Type 941 or any other required tax return.
Compliance and Updates: ERC regulations and guidance have actually progressed with time. These companies stay updated with the current changes and guarantee that your filings adhere to the most present guidelines. If the Internal revenue service demands extra details or performs an audit related to your ERC claim, they can also offer ongoing support.
It is very important to research study and vet any business offering ERC filing assistance to guarantee their reliability and proficiency. Try to find established companies with experience in tax and payroll services, or think about reaching out to trusted accounting firms or tax experts who provide ERC submitting support.
Remember that while these business can offer valuable assistance, it’s always a good idea to have a standard understanding of the ERC requirements and procedure yourself. This will help you make notified decisions 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 procedures. The objective of the ERC is to motivate businesses to keep and pay their staff members throughout the pandemic, even if their operations have been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to eligible employers, consisting of for-profit organizations, tax-exempt organizations, and specific governmental entities. To qualify, employers must meet one of two requirements:.
Business operations were totally or partly suspended due to a federal government order related to COVID-19.
Business experienced a substantial decline in gross invoices. As pointed out previously, for 2021, a considerable decrease is defined as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decline in gross invoices compared to the right away 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 portion (as much as 70%) of certified wages paid to employees, consisting of certain health plan expenditures. The optimum 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 got a Paycheck Defense Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 enables businesses to claim the ERC even if they received a PPP loan. The exact same salaries can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and improved, permitting qualified companies to declare the credit for certified earnings paid as far back as March 13, 2020. This retroactive provision supplies a chance for services to amend prior-year income tax return and receive refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their employment income tax return, typically Kind 941. If the credit exceeds the quantity of work taxes owed, the excess can be reimbursed to the employer.
It’s important to note that the ERC arrangements and eligibility requirements have progressed over time. The very best course of action is to seek advice from a tax professional or go to the main IRS website for the most comprehensive and up-to-date information regarding the ERC, including any recent legal changes or updates.
To qualify for the ERC, a company should satisfy one of the following requirements:.
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. For 2021, a significant decline is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decrease in gross receipts compared to the 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, consisting of tax-exempt companies, however there are some exceptions. For example, government entities and companies that received a PPP loan might have limitations on claiming the credit.
The process for declaring the ERC includes finishing the needed kinds and consisting of the credit on your work income tax return (usually Type 941). The exact time it requires to process the credit can differ based upon numerous elements, including the complexity of your organization and the work of the IRS. It’s recommended to speak with a tax expert for assistance particular to your circumstance.
There are several companies that can aid with the procedure of declaring the ERC. These consist of accounting firms, tax advisory services, and payroll provider. Some well-known companies that provide assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research study and call these business directly to ask about their fees and services.
Please note that the information supplied here is based upon general understanding and may not show the most recent updates or modifications to the ERC. It’s important to seek advice from a tax professional or go to the main internal revenue service site for the most updated and accurate details concerning eligibility, declaring procedures, and available support.
Less than 100. If the employer had 100 or less employees on average in 2019, then the credit is based.
on incomes paid to all workers whether they actually worked or not. To put it simply, even if the.
staff members worked full-time and got paid for full time work, the employer still gets the credit.
Greater than 100. If the employer had more than 100 staff members typically in 2019, then the credit is.
allowed just for wages paid to workers who did not work throughout the calendar quarter.
In both cases, “wages” includes not simply cash payments however also a portion of the cost of company.
supplied healthcare. Employee Retention Credits Under Cares Act
Employers can be right away repaid for the credit by reducing the amount of payroll taxes they.