Lets talk first about Can You Take The Employee Retention Credit And The Ppp Loan :
Our team here what do these guys doing everybody in this space is assisting teach people about ERC and uh always supply a beautiful breakfast and have individuals actually learn more about the program we need to head to the room where we have the ability to show some of the checks that we are getting for companies and I want to see that what is this this is uh numerous millions of dollars actually Kevin numerous countless dollars so these are duplicate copies of the letters that go to customers verifying that the check is on the method I mean you know if you simply start to look at a few 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 simply I indicate think of how many actual customers that went through the program yeah this is the very end this is the celebration at the end when the check is verified the numbers are validated and the check is on the mail in the mail from the IRS heading to the client so that’s how you’re able to track it you know when you
receive this you understand the check is chosen sure which’s when they pay so they do not pay anything till they actually 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 deposit it into their checking account and they can really rely on Wonder trust that the procedure has been completed and the number of you believe 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 clearly they understand what they’re doing and that’s what you need you require 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 actually crucial today the staff member retention credit which the majority of you have actually never ever heard of I certainly hadn’t become aware of it up until really recently and found out a lot about it since this is probably the most affordable cost of capital for any small business anywhere
anytime if you have staff members in between 5 and five hundred so I’ve got the specialist 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 difficult this isn’t like PPP we simply call your bank supervisor and state give 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 spokesperson for this I like this program it’s going away very soon you got to discover everything about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply start there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act provided services 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody it makes a big distinction right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
remedy the cash cash payroll tax refund all right go on sorry I just have to make certain we got that point I suggest that’s a big difference a loan versus cash money I like money cash that’s what we’re speaking about 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 beautiful difficult check in the mail where you get real money from the internal revenue service all right so let’s talk about how it works due to the fact that it seems like to me if it’s a if it’s employee 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 individuals on the cap table not for investors it’s for staff members right you needed to have owned a service but it’s based upon you having W-2 workers in America not 10.99. so as long as you had W-2 employees and you paid federal payroll taxes that’s why you would be qualified so you have to be on payroll in 2020 on the W-2 and you need to be on payroll for the first six months of 2021 on the W-2 right so there were 6 quarters the program was open well walk us through the six quarters so you had quarters 2 3 and four of 2020 and you had quarters one 2 and 3 of 2021. all right 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 cash how much can you return 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 employee’s income to an optimum of 5 thousand dollars per staff member for the year of 2020 and in 2021 the numbers increased to 70 of the worker’s wage to a maximum of 7 thousand per quarter how did that happen um they simply altered the rules in.
2021 versus because the turmoil 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 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 six thousand dollars per worker that is since that’s a great deal of cash it is now there’s a caution here the PPP money would need to be lowered from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would reduce the 26 000 so what we’re seeing typically Kevin is if you took PPP cash someplace around ten thousand dollars a person so let’s state hypothetically you owned a dining establishment in New York City where I’m from and you had a hundred workers and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s substantial clearly now the big concern is why does nobody understand about this because appearance when I initially found out about this when I initially fulfilled Josh you understand I’ve got great deals of financial investments in great deals of business I’m a significant supporter for entrepreneurship in America and make many lots of financial investments in business owners of which many suffered through the pandemic when I first found out about this I called BS I do not think it since 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 and that were well been worthy of and we used them carefully to stay alive throughout the pandemic so when I heard about this I said nah it can’t be true however when I dug around I even contacted us to my politician friends Governor Senators they didn’t learn about it I mean that’s how you know that’s how misinformation is that there’s no info out there then a bunch 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 nobody understand about the staff member retention credit you understand what’s intriguing you’re talking about the banks Kevin due to the fact that in the PPP loan process the federal government made it very clear that if you wanted a PPP loan you would call Wells Fargo Citibank Bank of America any of the huge 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 procedure process that’s all um and here there was mayhem because keep in mind in the initial cares act you could not do both programs so if you had done PPP you could refrain from doing ERC in the initial program and when they altered 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 federal government never made it clear to anybody about how to.
do this does your CFO know how to do this not truly she or he’s never ever done it previously 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 accountant’s never ever done this prior to unless you have an account that went into this company and bottom line my firm Kevin has stayed in business considering that 2009 and we have actually been dealing with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 business so a lot of our huge huge corporate clients have actually worked with bottom line to recuperate other government programs we have actually done sales tax and utilize tax unemployment tax work opportunity tax credits research and development tax credits unclaimed home property tax all of these other government programs.
The worker retention tax credit is a broad based refundable tax credit designed to encourage.
employers to keep staff members on their payroll. The credit is 50% of up to $10,000 in salaries paid by an.
company whose service is completely or partially suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
1. The credit is readily available to all companies regardless of size consisting of tax exempt organizations. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) little.
services who take Small company Loans.
2. To qualify, the company has to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s service is fully or partially suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross receipts are below 50% of the comparable quarter in 2019. As soon as the.
employer’s gross receipts exceed 80% of a comparable quarter in 2019 they no longer qualify.
after completion of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the qualifying incomes paid up to $10,000 in total.
It works for incomes paid after March 13th and before December 31, 2020.
The definition of certifying wages varies by whether an employer had, on average, more or less than.
100 employees in 2019.
Companies that focus on ERC filing assistance usually provide know-how and support to assist services navigate the complicated process of claiming the credit. They can provide various services, including:.
How is the employee retention credit calculated? Can You Take The Employee Retention Credit And The Ppp Loan
Eligibility Assessment: These companies will assess your business’s eligibility for the ERC based on factors such as your market, earnings, and operations. If you meet the requirements for the credit and determine the maximum credit amount you can claim, they can help figure out.
Documents and Computation: ERC filing services will assist in collecting the required paperwork, such as payroll records and financial statements, to support your claim. They will likewise help compute the credit quantity based on eligible wages and other qualifying expenses.
Retroactive Claim Evaluation: If you are eligible to claim the ERC for previous quarters, these business can evaluate your previous payroll records and financials to recognize potential opportunities for retroactive credits. They can help you amend prior tax returns to declare these refunds.
Filing Support: Business concentrating on ERC filings will prepare and submit the needed kinds and documentation in your place. This includes completing Kind 941 or any other required tax return.
Compliance and Updates: ERC guidelines and assistance have actually progressed over time. These companies remain upgraded with the current changes and ensure that your filings adhere to the most present standards. They can also offer ongoing support if the internal revenue service demands extra info or carries out an audit related to your ERC claim.
It is necessary to research and vet any business using ERC filing assistance to guarantee their trustworthiness and know-how. Try to find established companies with experience in tax and payroll services, or think about connecting to trusted accounting firms or tax experts who provide ERC submitting support.
Bear in mind that while these business can provide valuable assistance, it’s always an excellent idea to have a standard understanding of the ERC requirements and procedure yourself. This will assist you make informed choices and make sure accurate filings.
The Staff Member 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 services to retain and pay their staff members throughout the pandemic, even if their operations have actually been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to qualified employers, consisting of for-profit organizations, tax-exempt companies, and particular governmental entities. To qualify, employers should satisfy one of two requirements:.
The business operations were totally or partly suspended due to a federal government order related to COVID-19.
The business experienced a significant decline in gross invoices. As pointed out earlier, for 2021, a substantial decrease is specified as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decline in gross receipts compared to the instantly preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity amounts to a percentage (as much as 70%) of qualified incomes paid to workers, consisting of specific health insurance costs. 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, organizations that received an Income Security Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 permits businesses to declare the ERC even if they received a PPP loan. However, the very same wages can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and improved, enabling eligible companies to declare the credit for qualified salaries paid as far back as March 13, 2020. This retroactive arrangement offers an opportunity for businesses to amend prior-year income tax return and receive refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their work tax returns, typically Type 941. The excess can be reimbursed to the employer if the credit exceeds the amount of employment taxes owed.
It is very important to note that the ERC arrangements and eligibility criteria have evolved over time. The very best course of action is to speak with a tax professional or check out the official internal revenue service website for the most in-depth and updated details relating to the ERC, consisting of any recent legislative changes or updates.
To get approved for the ERC, an organization must satisfy among the following criteria:.
The business operations were completely or partially suspended due to a federal government order related to COVID-19.
The business experienced a considerable decline in gross invoices. For 2021, a significant decline is specified as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decline in gross invoices compared to the right away preceding quarter.
The ERC is offered to businesses of all sizes, consisting of tax-exempt companies, but there are some exceptions. Government entities and services that got a PPP loan may have restrictions on declaring the credit.
The procedure for declaring the ERC involves completing the necessary forms and including the credit on your work tax return (typically Form 941). The exact time it requires to process the credit can vary based upon a number of elements, including the intricacy of your service and the work of the IRS. It’s recommended to consult with a tax expert for assistance specific to your circumstance.
There are a number of companies that can help with the procedure of claiming the ERC. These consist of accounting firms, tax advisory services, and payroll service providers. Some widely known business that provide assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research study and get in touch with these companies directly to inquire about their services and costs.
Please keep in mind that the information supplied here is based upon basic knowledge and might not reflect the most recent updates or changes to the ERC. It’s important to consult with a tax expert or visit the main IRS website for the most updated and precise info relating to eligibility, claiming treatments, and available assistance.
Less than 100. If the company had 100 or fewer staff members usually in 2019, then the credit is based.
on incomes paid to all workers 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 employer still gets the credit.
Greater than 100. If the company had more than 100 employees typically in 2019, then the credit is.
permitted just for wages paid to employees who did not work throughout the calendar quarter.
In both cases, “wages” includes not simply money payments but likewise a portion of the cost of employer.
provided healthcare. Can You Take The Employee Retention Credit And The Ppp Loan
Companies can be instantly compensated for the credit by minimizing the amount of payroll taxes they.