Lets talk first about 1120S Employee Retention Credit :
Our team here what do these men doing everyone in this space is helping teach individuals about ERC and uh constantly offer a gorgeous breakfast and have individuals really learn about the program we should head to the room where we are able to display a few of the checks that we are getting for business and I want to see that what is this this is uh numerous millions of dollars actually Kevin hundreds of countless dollars so these are replicate copies of the letters that go to customers verifying 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 suggest it’s just I indicate 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 confirmed 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 know the check is chosen sure which’s when they pay so they do not pay anything till they actually receive the cash they do not pay bottom line Wonder trust anything till this letter is confirmed the check is on the method they transfer it into their bank account and they can really rely on Wonder trust that the process has actually been completed and the number of you think you’ve processed considering that you began this we’re about 35 000 of these for
about six billion dollars wow so clearly they know what they’re doing which’s what you require 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 Wonderful here you’re at my YouTube channel we’re speaking about something really important today the worker retention credit which most of you have never ever heard of I definitely had not heard of it till extremely recently and found out a lot about it since this is probably the lowest expense of capital for any small company anywhere
anytime if you have workers between five and five hundred so I’ve got the expert with me this is Josh Fox he’s the founder and CEO of bottom line Concepts they’re the largest processor of these ERC credits this is a 170 page program so it’s hard this isn’t like PPP we simply call your bank manager and say offer me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to tell all of us 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 going away soon you got to find out everything about it let’s talk employee retention credit Josh Fox what is an ERC let’s just begin there so throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act provided services three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everybody 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.
remedy the cash money payroll tax refund okay go on sorry I just need to make certain we got that point I mean that’s a big distinction a loan versus money cash I like cash money that’s what we’re discussing 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 initial cares Act is the ERC and yes Kevin it is a lovely difficult check in the mail where you get real money from the IRS all right so let’s talk about how it works due to the fact that it sounds like to me if it’s a if it’s worker retention credit that individual needed to be a worker 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 employees right you needed to have actually owned a business 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 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 two three and 4 of 2020 and you had quarters one two and 3 of 2021. all right so that’s how it’s measured you have to be on the W-2 during that duration 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 exact Kevin is 50 of the worker’s wage to a maximum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the staff member’s income to a maximum of seven thousand per quarter how did that happen um they simply changed the rules in.
2021 versus due to the fact that the mayhem of the pandemic so they wanted 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 then what happens 21 000 Max in 2021 oh that’s how you come up with twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per worker that is since that’s a lot of money it is now there’s a caveat here the PPP money would have to be minimized from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would lower the 26 000 so what we’re seeing on average Kevin is if you took PPP money somewhere around ten thousand dollars an individual so let’s say hypothetically you owned a restaurant in New York 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 certainly now the big question is why does nobody understand about this due to the fact that appearance when I first heard about this when I first satisfied Josh you understand I’ve got great deals of investments in great deals of companies I’m a major supporter for entrepreneurship in America and make numerous many investments in business owners of which lots of suffered through the pandemic when I first heard about this I called BS I don’t think it since I utilize the PPP we went through the money center Banks to get it it was really easy to do we had our CEOs call the banks they got their loans and that were well should have and we utilized them carefully to stay alive throughout the pandemic so when I heard about this I said nah it can’t be true but when I dug around I even contacted us to my political leader buddies Guv Senators they didn’t know 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 told me well you can’t get it due to the fact that you took the PPP also not real so let’s ask Josh why does nobody understand about the employee retention credit you understand what’s intriguing you’re discussing 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 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 process procedure that’s all um and here there was mayhem since remember in the initial cares act you could refrain from doing both programs so if you had actually done PPP you could refrain from doing ERC in the initial program and when they altered the law in 2021 the banks were not doing ERC since it’s not alone so you’re getting a tax refund so the federal government never made it clear to any person about how to.
do this does your CFO know how to do this not truly he or she’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 accounting professional’s never ever done this before unless you have an account that entered into this organization and bottom line my company Kevin has actually stayed in business given that 2009 and we have actually been dealing with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 business so a lot of our huge huge business customers have dealt with bottom line to recuperate other government programs we’ve done sales tax and use tax joblessness 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 created to encourage.
employers to keep employees on their payroll. The credit is 50% of approximately $10,000 in wages paid by an.
employer whose organization is fully or partially suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is offered to all companies no matter size including tax exempt organizations. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) little.
companies who take Small company Loans.
2. To qualify, the employer has to satisfy one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s business is fully or partially suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross invoices are listed below 50% of the equivalent quarter in 2019. When the.
company’s gross receipts exceed 80% of an equivalent quarter in 2019 they no longer certify.
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 overall.
It is effective for wages paid after March 13th and prior to December 31, 2020.
The meaning of certifying incomes differs by whether a company had, usually, more or less than.
100 employees in 2019.
Business that focus on ERC filing support typically offer proficiency and assistance to assist organizations browse the intricate process of claiming the credit. They can use different services, including:.
How is the employee retention credit calculated? 1120S Employee Retention Credit
Eligibility Assessment: These business will examine your service’s eligibility for the ERC based upon factors such as your market, profits, and operations. If you meet the requirements for the credit and recognize the optimum credit amount you can declare, they can assist identify.
Documentation and Computation: ERC filing services will assist in gathering the needed documentation, such as payroll records and monetary declarations, to support your claim. They will also help compute the credit quantity based on qualified salaries and other certifying costs.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for previous quarters, these business can examine your past payroll records and financials to recognize potential chances for retroactive credits. They can help you modify previous tax returns to claim these refunds.
Filing Support: Companies concentrating on ERC filings will prepare and send the essential kinds and documents in your place. This consists of finishing Form 941 or any other required tax forms.
Compliance and Updates: ERC policies and assistance have developed in time. These business stay upgraded with the most recent changes and ensure that your filings adhere to the most present standards. If the Internal revenue service requests extra details or carries out an audit associated to your ERC claim, they can likewise provide ongoing support.
It is necessary to research study and vet any business providing ERC filing help to ensure their credibility and competence. Search for recognized companies with experience in tax and payroll services, or think about connecting to trusted accounting firms or tax specialists who use ERC submitting support.
Remember that while these companies can supply important help, it’s constantly a great concept to have a basic understanding of the ERC requirements and process yourself. This will assist you make informed choices and ensure precise 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 objective of the ERC is to motivate businesses to retain and pay their employees during the pandemic, even if their operations have actually been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is available to eligible companies, consisting of for-profit organizations, tax-exempt companies, and particular governmental entities. To qualify, companies should fulfill one of two criteria:.
The business operations were fully or partly suspended due to a government order related to COVID-19.
Business experienced a considerable decrease in gross receipts. As pointed out previously, for 2021, a significant decline is specified as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit quantity is equal to a percentage (up to 70%) of qualified salaries paid to employees, consisting of certain health insurance costs. The optimum credit per staff member is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, businesses that received an Income Protection Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 permits services to claim the ERC even if they got a PPP loan. However, the exact same earnings can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and boosted, permitting qualified employers to claim the credit for certified incomes paid as far back as March 13, 2020. This retroactive provision offers an opportunity for organizations to change prior-year income tax return and receive refunds.
Declaring the Credit: Employers can declare the ERC by reporting it on their employment tax returns, usually Form 941. If the credit goes beyond the quantity of work taxes owed, the excess can be refunded to the employer.
It’s important to keep in mind that the ERC arrangements and eligibility requirements have actually progressed with time. The very best course of action is to seek advice from a tax expert or visit the official internal revenue service site for the most up-to-date and detailed info concerning the ERC, including any recent legal modifications or updates.
To receive the ERC, a service must satisfy among the following requirements:.
The business operations were completely or partially suspended due to a federal government order related to COVID-19.
Business experienced a significant decline in gross invoices. For 2021, a considerable decline is defined as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a substantial decrease is specified as a 20% decline in gross invoices compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the instantly preceding quarter.
The ERC is available to services of all sizes, including tax-exempt organizations, however there are some exceptions. Government entities and companies that received a PPP loan may have constraints on claiming the credit.
The procedure for claiming the ERC includes finishing the necessary types and including the credit on your employment tax return (generally Kind 941). The exact time it requires to process the credit can vary based upon a number of aspects, consisting of the intricacy of your business and the work of the internal revenue service. It’s advised to consult with a tax professional for guidance specific to your situation.
There are a number of business that can help with the process of claiming the ERC. Some widely known companies that offer support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the details supplied here is based on basic knowledge and may not reflect the most current updates or changes to the ERC. It is necessary to speak with a tax professional or go to the main IRS site for the most up-to-date and accurate details concerning eligibility, declaring treatments, and offered support.
Less than 100. The credit is based if the employer had 100 or less employees on average in 2019.
on salaries paid to all workers whether they actually worked or not. Simply put, even if the.
employees 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 employees on average in 2019.
permitted just for incomes paid to staff members who did not work throughout the calendar quarter.
In both cases, “incomes” includes not simply cash payments but likewise a portion of the expense of company.
supplied health care. 1120S Employee Retention Credit
Employers can be immediately reimbursed for the credit by minimizing the quantity of payroll taxes they.