Lets talk first about Ppp Loan Vs Employee Retention Credit :
Our team here what do these people doing everyone in this space is assisting teach individuals about ERC and uh always provide a beautiful breakfast and have individuals actually discover the program we ought to head to the space where we have the ability to display 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 actually Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to customers verifying that the check is on the way I suggest you understand if you simply start to look at a few of these here I imply this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s just I mean think about 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 confirmed 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 know when you
get this you know the check is opted for sure which’s when they pay so they don’t pay anything until they really get the cash they do not pay bottom line Wonder trust anything till 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 process has actually been completed and the number of you believe you’ve processed since you began this we have to do with 35 000 of these for
about six billion dollars wow so plainly they understand what they’re doing and that’s what you require you need specialists 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 Wonderful here you’re at my YouTube channel we’re talking about something truly crucial today the staff member retention credit which the majority of you have actually never become aware of I certainly had not heard of it till really recently and found out 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 5 and five hundred so I’ve got the expert with me this is Josh Fox he’s the founder and CEO of bottom line Ideas they’re the largest processor of these ERC credits this is a 170 page program so it’s challenging this isn’t like PPP we simply phone your bank supervisor and say offer me a loan it doesn’t 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 become yes the Ambassador and paid representative for this I enjoy this program it’s going away very soon you got to find out everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just begin there so during the Trump Administration when President Trump was enacted they created the cares Act and the cares act used services three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone it makes a big difference right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
remedy the cash money payroll tax refund okay go on sorry I simply need to ensure we got that point I suggest that’s a big distinction a loan versus money cash I like cash 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 lovely difficult check in the mail where you get real cash 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 staff member retention credit that person needed to be an employee so I’m going to make the Assumption this cash is not for the owner not for people on the cap table not for shareholders it’s for workers right you had to have owned a service however it’s based on you having W-2 employees 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 eligible 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 correct so there were six quarters the program was open well stroll us through the 6 quarters so you had quarters 2 three and 4 of 2020 and you had quarters one 2 and three of 2021. fine so that’s how it’s measured you have 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 staff member that was on a W-2 in those 6 quarters so the calculation in 2020 to be precise Kevin is 50 of the staff member’s salary to an optimum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers escalated to 70 of the staff member’s income to a maximum of seven thousand per quarter how did that take place um they simply altered the rules in.
2021 versus since the mayhem of the pandemic so they wanted to even get more to keep those staff members on payroll 100 so if you can get 5 000 per person Max in twenty that was 50 in 2020 up to five 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 great deal of cash it is now there’s a caveat here the PPP cash would need to be lowered 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 on average Kevin is if you took PPP cash someplace around 10 thousand dollars an individual so let’s state hypothetically you owned a restaurant in New york city 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 substantial obviously now the huge concern is why does no one understand about this because look when I first became aware of this when I first fulfilled Josh you know I have actually got lots of financial investments in great deals of companies I’m a major supporter for entrepreneurship in America and make lots of numerous financial investments in entrepreneurs of which many suffered through the pandemic when I first heard about this I called BS I don’t think it because I use 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 which were well deserved and we used them carefully to stay alive throughout the pandemic so when I found out about this I said nah it can’t be 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 misinformation is that there’s no details out there then a lot 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 know about the worker retention credit you understand what’s interesting you’re speaking about the banks Kevin since in the PPP loan process the federal government made it really clear that if you desired a PPP loan you would call Wells Fargo Citibank Bank of America any of the huge banks in our nation and they would process process in Canada a pre-pp loan there’s no loans in Canada by the way it’s just procedure process that’s all um and here there was turmoil because keep in mind in the initial cares act you could not do both programs so if you had done PPP you could 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 federal government never ever made it clear to anyone about how to.
do this does your CFO understand how to do this not truly he or she’s never done it before do the banks do it nope the banks don’t do it the payroll business yeah some of them are doing it as a payroll business your accountant no your accountant’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 since 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 great deal of our big huge business customers have worked with bottom line to recuperate other government programs we’ve 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 worker retention tax credit is a broad based refundable tax credit designed to encourage.
employers to keep workers on their payroll. The credit is 50% of approximately $10,000 in wages paid by an.
company whose organization is totally or partially suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
Accessibility.
1. The credit is readily available to all employers no matter size consisting of tax exempt companies. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) little.
organizations who take Small Business Loans.
2. To certify, the company has to satisfy one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s service is totally or partially suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are below 50% of the comparable quarter in 2019. As soon as the.
employer’s gross receipts go above 80% of a comparable quarter in 2019 they no longer certify.
after completion of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the qualifying earnings paid up to $10,000 in total.
It works for earnings paid after March 13th and prior to December 31, 2020.
The definition of qualifying salaries varies by whether an employer had, on average, more or less than.
100 workers in 2019.
Business that focus on ERC filing assistance normally supply know-how and support to assist companies navigate the complicated process of claiming the credit. They can offer different services, including:.
How is the employee retention credit calculated? Ppp Loan Vs Employee Retention Credit
Eligibility Evaluation: These companies will assess your business’s eligibility for the ERC based upon aspects such as your industry, income, and operations. If you meet the requirements for the credit and determine the optimum credit amount you can claim, they can help determine.
Paperwork and Calculation: ERC filing services will help in gathering the needed paperwork, such as payroll records and financial statements, to support your claim. They will likewise assist calculate the credit amount based on eligible earnings and other certifying expenses.
Retroactive Claim Evaluation: If you are eligible to claim the ERC for previous quarters, these business can evaluate your past payroll records and financials to identify potential chances for retroactive credits. They can assist you modify previous income tax return to claim these refunds.
Filing Help: Business focusing on ERC filings will prepare and submit the required kinds and paperwork on your behalf. This includes completing Kind 941 or any other necessary tax forms.
Compliance and Updates: ERC regulations and assistance have actually progressed over time. These business stay updated with the current changes and guarantee that your filings adhere to the most current guidelines. They can also supply ongoing assistance if the IRS requests additional information or performs an audit related to your ERC claim.
It’s important to research study and veterinarian any company providing ERC filing support to ensure their credibility and expertise. Search for recognized companies with experience in tax and payroll services, or think about reaching out to relied on accounting firms or tax specialists who provide ERC submitting assistance.
Bear in mind that while these business can provide important support, it’s always a great idea to have a standard understanding of the ERC requirements and process yourself. This will assist you make notified decisions 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 measures. The goal of the ERC is to encourage companies to maintain and pay their staff members during the pandemic, even if their operations have actually been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to qualified companies, including for-profit companies, tax-exempt companies, and specific 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.
The business experienced a considerable decrease in gross invoices. As pointed out previously, for 2021, a substantial decline is specified as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decline is specified as a 20% decline in gross receipts 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 (up to 70%) of qualified earnings paid to workers, including particular health plan costs. The maximum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, organizations that got a Paycheck Protection Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 enables businesses to declare the ERC even if they received a PPP loan. The exact same wages can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and enhanced, permitting qualified employers to claim the credit for certified earnings paid as far back as March 13, 2020. This retroactive provision supplies an opportunity for businesses to amend prior-year income tax return and get refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their work income tax return, usually Form 941. The excess can be reimbursed to the employer if the credit exceeds the quantity of work taxes owed.
It is very important to note that the ERC provisions and eligibility criteria have evolved with time. The very best course of action is to talk to a tax expert or go to the main internal revenue service site for the most comprehensive and up-to-date information regarding the ERC, including any current legislative changes or updates.
To qualify for the ERC, a company needs to fulfill among the following requirements:.
Business operations were totally or partially suspended due to a government order related to COVID-19.
Business experienced a significant decline in gross receipts. For 2021, a considerable decrease is defined as a 20% decline 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 very same quarter in 2019, or a 20% decline in gross invoices compared to the right away preceding quarter.
The ERC is available to organizations of all sizes, including tax-exempt organizations, however there are some exceptions. Federal government entities and organizations that got a PPP loan may have constraints on claiming the credit.
The procedure for claiming the ERC includes completing the needed forms and including the credit on your work income tax return (typically Type 941). The exact time it requires to process the credit can differ based on a number of aspects, consisting of the complexity of your company and the work of the internal revenue service. It’s advised to seek advice from a tax professional for assistance specific to your circumstance.
There are several business that can help with the procedure of declaring the ERC. Some well-known companies that use assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the info offered here is based upon general understanding and might not show the most current updates or modifications to the ERC. It is essential to consult with a tax professional or go to the main IRS site for the most accurate and updated info concerning eligibility, claiming treatments, and available support.
Less than 100. The credit is based if the employer had 100 or less employees on average in 2019.
on incomes paid to all workers whether they really worked or not. In other words, even if the.
employees worked full-time and got paid for full time work, the employer still gets the credit.
Greater than 100. The credit is if the company had more than 100 workers on average in 2019.
permitted just for wages paid to workers who did not work during the calendar quarter.
In both cases, “salaries” consists of not just money payments but also a portion of the expense of company.
provided healthcare. Ppp Loan Vs Employee Retention Credit
Payment.
Companies can be instantly reimbursed for the credit by decreasing the quantity of payroll taxes they.