Lets talk first about Paycheck Protection Program Vs Employee Retention Credit :
Our group here what do these men doing everybody in this space is helping teach people about ERC and uh always supply a stunning breakfast and have individuals really find out about the program we need to head to the space where we are able to display some 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 millions of dollars so these are duplicate copies of the letters that go to clients confirming that the check is on the way I mean you know if you just start to take a look at some of these here I indicate this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I imply it’s just I suggest think of how many 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 consumer so that’s how you have the ability to track it you know when you
get this you understand the check is opted for sure and that’s when they pay so they don’t pay anything till they in fact receive the cash 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 checking account and they can genuinely rely on Wonder trust that the process has actually been finished and how many you believe you’ve processed since you started this we’re about 35 000 of these for
about six billion dollars wow so plainly they understand what they’re doing which’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 Wonderful here you’re at my YouTube channel we’re talking about something truly crucial today the staff member retention credit which most of you have never ever become aware of I definitely hadn’t heard of it till very recently and learned a lot about it since this is most likely the most affordable expense of capital for any small business anywhere
anytime if you have workers between five and five hundred so I’ve got the professional 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 say give me a loan it does not work there’s not a loan it’s an application and Josh is going to inform us all about it and how to get it and why I have actually ended up being yes the Ambassador and paid spokesperson for this I like this program it’s going away very soon you got to learn all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply begin there so during the Trump Administration when President Trump was enacted they created the cares Act and the cares act offered services three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically 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.
correct the money cash payroll tax refund all right go on sorry I simply need to ensure we got that point I imply that’s a big distinction a loan versus cash cash I like cash cash that’s what we’re discussing 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 beautiful hard check in the mail where you get actual cash from the IRS all right so let’s speak about how it works because it seems like to me if it’s a if it’s worker retention credit that person had to be a worker so I’m going to make the Presumption this cash is not for the owner not for people on the cap table not for investors it’s for employees right you needed to have owned a service however it’s based upon you having W-2 workers 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 very first 6 months of 2021 on the W-2 proper so there were 6 quarters the program was open well stroll us through the 6 quarters so you had quarters two 3 and four of 2020 and you had quarters one two and three of 2021. alright so that’s how it’s measured you need to be on the W-2 during that duration now let’s talk my preferred part money how much can you return per employee that was on a W-2 in those 6 quarters so the computation in 2020 to be precise Kevin is 50 of the employee’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 staff member’s wage to an optimum of seven thousand per quarter how did that occur um they simply changed the rules in.
2021 versus since the turmoil 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 as much as 5 thousand Max and after that what takes place 21 000 Max in 2021 oh that’s how you develop twenty 6 thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty 6 thousand dollars per worker that is because that’s a lot of money it is now there’s a caveat here the PPP money would need to be reduced 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 usually Kevin is if you took PPP money somewhere around 10 thousand dollars an individual so let’s say 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 internal revenue service so it’s huge undoubtedly now the huge question is why does nobody understand about this since look when I first found out about this when I first satisfied Josh you understand I’ve got great deals of financial investments in lots of companies I’m a major supporter for entrepreneurship in America and make lots of lots of financial investments in entrepreneurs of which numerous suffered through the pandemic when I initially 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 very easy to do we had our CEOs call the banks they got their loans and that were well deserved and we utilized them sensibly to survive during the pandemic so when I became aware of this I stated nah it can’t be true however when I dug around I even contacted us to my politician pals Guv Senators they didn’t understand about it I mean that’s how you understand that’s how false information is that there’s no info out there then a lot of individuals told me well you can’t get it because you took the PPP likewise not real so let’s ask Josh why does no one understand about the staff member retention credit you understand what’s intriguing you’re discussing the banks Kevin because in the PPP loan procedure 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 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 just procedure procedure that’s all um and here there was turmoil because remember in the original cares act you could not do 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 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 any person about how to.
do this does your CFO understand how to do this not truly she or he’s never done it previously do the banks do it nope the banks don’t do it the payroll companies yeah some of them are doing it as a payroll business your accounting professional no your accountant’s never ever done this prior to unless you have an account that entered into this business and bottom line my firm Kevin has stayed in business considering that 2009 and we’ve been dealing with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 business so a lot of our huge big corporate customers have worked with bottom line to recover other federal government programs we have actually done sales tax and utilize tax joblessness tax work chance tax credits research and development tax credits unclaimed property property tax all of these other federal 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.
employer whose business is completely or partly suspended because of COVID-19 or whose gross invoices.
decrease by more than 50%.
1. The credit is available to all employers no matter size consisting of tax exempt companies. There are.
just two exceptions: (1) state and city governments and their instrumentalities and (2) small.
businesses who take Small Business Loans.
2. To certify, the employer has to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s service is totally or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the similar quarter in 2019. As soon as the.
company’s gross receipts go above 80% of a comparable quarter in 2019 they no longer qualify.
after the end of that quarter.
Computation 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 prior to December 31, 2020.
The definition of certifying incomes varies by whether an employer had, typically, basically than.
100 staff members in 2019.
Business that specialize in ERC filing assistance generally provide know-how and support to assist companies browse the intricate process of claiming the credit. They can provide various services, including:.
How is the employee retention credit calculated? Paycheck Protection Program Vs Employee Retention Credit
Eligibility Assessment: These companies will assess your company’s eligibility for the ERC based upon aspects such as your market, revenue, and operations. If you fulfill the requirements for the credit and identify the optimum credit quantity you can declare, they can assist figure out.
Documentation and Estimation: ERC filing services will help in collecting the essential paperwork, such as payroll records and financial declarations, to support your claim. They will likewise assist compute the credit amount based upon eligible salaries and other certifying expenses.
Retroactive Claim Review: If you are eligible to declare the ERC for previous quarters, these companies can evaluate your past payroll records and financials to determine possible opportunities for retroactive credits. They can help you modify prior income tax return to claim these refunds.
Filing Assistance: Business focusing on ERC filings will prepare and submit the necessary types and documentation in your place. This includes completing Form 941 or any other required tax forms.
Compliance and Updates: ERC policies and guidance have actually progressed in time. These companies stay updated with the latest modifications and guarantee that your filings comply with the most current guidelines. If the IRS demands extra details or performs an audit associated to your ERC claim, they can also supply continuous assistance.
It’s important to research study and vet any business using ERC filing help to guarantee their reliability and knowledge. Search for established firms with experience in tax and payroll services, or think about connecting to relied on accounting firms or tax experts who provide ERC submitting support.
Keep in mind that while these business can provide important help, it’s constantly a great concept to have a standard 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 presented by the U.S. federal government as part of COVID-19 relief procedures. The goal of the ERC is to motivate businesses to maintain and pay their employees throughout 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 companies, including for-profit organizations, tax-exempt organizations, and certain governmental entities. To qualify, employers need to meet one of two requirements:.
Business operations were totally or partially suspended due to a federal government order related to COVID-19.
The business experienced a significant decrease in gross invoices. As discussed previously, for 2021, a substantial decline is specified as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross receipts 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 (up to 70%) of qualified wages paid to staff members, consisting of specific health plan expenditures. 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, services that got an Income Security Program (PPP) loan were not eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 enables businesses to declare the ERC even if they got a PPP loan. The very 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 boosted, permitting eligible companies to claim the credit for certified wages paid as far back as March 13, 2020. This retroactive arrangement offers an opportunity for companies to modify prior-year income tax return and receive refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their work tax returns, typically Type 941. The excess can be reimbursed to the company if the credit exceeds the quantity of employment taxes owed.
It’s important to note that the ERC provisions and eligibility criteria have actually progressed gradually. The best course of action is to consult with a tax expert or go to the main internal revenue service website for the most current and in-depth information regarding the ERC, consisting of any current legislative changes or updates.
To get approved for the ERC, a service must meet one of the following criteria:.
Business operations were totally or partly suspended due to a government order related to COVID-19.
Business experienced a considerable decrease in gross invoices. For 2021, a substantial decrease is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a significant decrease is specified 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 immediately preceding quarter.
The ERC is available to organizations of all sizes, consisting of tax-exempt organizations, however there are some exceptions. For instance, federal government entities and organizations that received a PPP loan may have limitations on claiming the credit.
The procedure for claiming the ERC includes finishing the essential forms and including the credit on your work income tax return (usually Kind 941). The exact time it takes to process the credit can vary based upon a number of aspects, consisting of the complexity of your company and the work of the internal revenue service. It’s suggested to speak with a tax expert for guidance specific to your circumstance.
There are a number of companies that can aid with the process of claiming the ERC. These include accounting companies, tax advisory services, and payroll service providers. Some widely known companies that offer help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research and contact these companies directly to inquire about their services and charges.
Please note that the information offered here is based on general knowledge and might not show the most recent updates or modifications to the ERC. It is essential to consult with a tax expert or check out the main internal revenue service website for the most accurate and updated info concerning eligibility, declaring treatments, and available assistance.
Less than 100. If the company had 100 or less workers usually in 2019, then the credit is based.
on earnings paid to all staff members whether they in fact worked or not. Simply put, even if the.
staff members worked full time and earned money for full time work, the company still gets the credit.
Greater than 100. The credit is if the company had more than 100 workers on average in 2019.
allowed just for incomes paid to workers who did not work during the calendar quarter.
In both cases, “earnings” includes not simply cash payments however likewise a portion of the expense of employer.
supplied health care. Paycheck Protection Program Vs Employee Retention Credit
Employers can be right away reimbursed for the credit by reducing the amount of payroll taxes they.