Lets talk first about Economic Security Act Employee Retention Credit :
Our team here what do these guys doing everyone in this space is assisting teach people about ERC and uh constantly provide a lovely breakfast and have people truly learn more about the program we should head to the space where we have the ability to display a few 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 literally Kevin numerous millions of dollars so these are duplicate copies of the letters that go to customers confirming that the check is on the way I imply you understand if you just begin to take a look at some of these here I mean this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I imply it’s simply I imply consider the number of real clients 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 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
get this you understand the check is chosen sure and that’s when they pay so they don’t pay anything up until they really get the money they do not pay bottom line Wonder trust anything up until this letter is confirmed the check is on the way they deposit it into their savings account and they can genuinely rely on Wonder trust that the procedure has actually been completed and the number of you think you’ve processed considering that you began this we have to do with 35 000 of these for
about six billion dollars wow so clearly they know what they’re doing which’s what you need you need specialists 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 Fantastic here you’re at my YouTube channel we’re speaking about something actually essential today the worker retention credit which the majority of you have never heard of I certainly hadn’t heard of it up until really recently and found out a lot about it because 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 professional with me this is Josh Fox he’s the creator and CEO of bottom line Concepts they’re the biggest processor of these ERC credits this is a 170 page program so it’s hard this isn’t like PPP we just phone your bank manager and state give me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to tell us all about it and how to get it and why I’ve become yes the Ambassador and paid representative for this I love this program it’s disappearing very soon you got to discover everything about it let’s talk worker retention credit Josh Fox what is an ERC let’s simply start there so during the Trump Administration when President Trump was enacted they created the cares Act and the cares act offered businesses 3 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 difference right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the cash money payroll tax refund fine go on sorry I just need to make sure we got that point I mean that’s a huge distinction a loan versus money money I like cash cash that’s what we’re speaking about 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 stunning hard check in the mail where you get real money from the internal revenue service all right so let’s speak about how it works due to the fact that 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 Presumption this cash is not for the owner not for individuals on the cap table not for shareholders it’s for employees right you had to have owned a company but it’s based upon you having W-2 staff members 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 eligible so you have to be on payroll in 2020 on the W-2 and you need to be on payroll for the very first 6 months of 2021 on the W-2 correct so there were 6 quarters the program was open well stroll us through the six quarters so you had quarters two three and four of 2020 and you had quarters one two and 3 of 2021. all right so that’s how it’s determined you have to be on the W-2 throughout that duration now let’s talk my favorite part cash how much can you return 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 staff member’s salary to an optimum of 5 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 7 thousand per quarter how did that occur um they simply altered the rules in.
2021 versus due to the fact that the turmoil 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 approximately 5 thousand Max and after that what occurs 21 000 Max in 2021 oh that’s how you create twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty 6 thousand dollars per employee that is since that’s a lot of cash it is now there’s a caution 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 two you would decrease the 26 000 so what we’re seeing typically Kevin is if you took PPP money someplace around 10 thousand dollars an individual so let’s say hypothetically you owned a dining establishment in New york city City where I’m from and you had a hundred staff members and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s huge obviously now the huge question is why does no one know about this since look when I first heard about this when I first met Josh you understand I have actually got lots of financial investments in lots of business I’m a major advocate for entrepreneurship in America and make lots of numerous investments in entrepreneurs of which lots of suffered through the pandemic when I first heard about this I called BS I don’t believe it since I use the PPP we went through the cash center Banks to get it it was really easy to do we had our CEOs call the banks they got their loans which were well should have and we utilized them carefully to stay alive during the pandemic so when I heard about this I stated nah it can’t hold true however when I dug around I even contacted us to my politician good friends Governor Senators they didn’t learn about it I indicate that’s how you understand that’s how false information is that there’s no details out there then a bunch of individuals informed me well you can’t get it because you took the PPP likewise not true so let’s ask Josh why does no one understand about the worker retention credit you understand what’s intriguing you’re discussing 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 nation and they would process procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s just process process that’s all um and here there was mayhem because keep in mind in the initial cares act you could refrain from doing both programs so if you had actually done PPP you could not do ERC in the initial program and when they changed the law in 2021 the banks were not doing ERC since 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 understand how to do this not actually she or he’s never done it before 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 business your accounting professional no your accountant’s never ever done this prior to unless you have an account that entered into this company and bottom line my firm Kevin has actually stayed in business since 2009 and we have actually been working with the federal government and the state government to recuperate money for Fortune 500 Fortune 1000 companies so a lot of our big huge corporate clients have worked with bottom line to recover other government programs we have actually done sales tax and use tax joblessness tax work opportunity tax credits research and development tax credits unclaimed property real estate tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit designed to motivate.
employers to keep workers on their payroll. The credit is 50% of approximately $10,000 in incomes paid by an.
Due to the fact that of COVID-19 or whose gross invoices, employer whose business is fully or partially suspended.
decline by more than 50%.
1. The credit is readily available to all employers regardless of size including tax exempt organizations. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) small.
services who take Small company Loans.
2. To qualify, the company has to fulfill one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s service is fully or partly suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross invoices are below 50% of the comparable quarter in 2019. When the.
company’s gross invoices exceed 80% of a comparable quarter in 2019 they no longer qualify.
after the end 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 wages paid after March 13th and before December 31, 2020.
The meaning of qualifying incomes differs by whether an employer had, on average, basically than.
100 staff members in 2019.
Companies that concentrate on ERC filing help usually provide know-how and assistance to help businesses navigate the intricate process of claiming the credit. They can provide numerous services, consisting of:.
How is the employee retention credit calculated? Economic Security Act Employee Retention Credit
Eligibility Evaluation: These business will evaluate your organization’s eligibility for the ERC based on elements such as your market, earnings, and operations. If you fulfill the requirements for the credit and determine the maximum credit quantity you can claim, they can assist determine.
Paperwork and Computation: ERC filing services will assist in collecting the required documentation, such as payroll records and monetary declarations, to support your claim. They will likewise assist calculate the credit amount based on qualified salaries and other certifying costs.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for previous quarters, these companies can review your previous payroll records and financials to determine possible chances for retroactive credits. They can assist you modify prior income tax return to declare these refunds.
Filing Support: Business focusing on ERC filings will prepare and submit the necessary forms and paperwork on your behalf. This includes finishing Form 941 or any other required tax forms.
Compliance and Updates: ERC guidelines and guidance have actually progressed gradually. These companies stay updated with the current changes and guarantee that your filings comply with the most present guidelines. If the IRS demands additional information or performs an audit related to your ERC claim, they can likewise provide continuous support.
It’s important to research study and vet any company providing ERC filing help to ensure their reliability and know-how. Search for established firms with experience in tax and payroll services, or consider connecting to trusted accounting companies or tax specialists who use ERC filing support.
Keep in mind that while these business can supply important help, it’s always a great concept to have a basic understanding of the ERC requirements and procedure yourself. This will help you make informed 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 steps. The objective of the ERC is to encourage businesses to keep and pay their workers 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 qualified companies, including for-profit services, tax-exempt companies, and certain governmental entities. To certify, employers should satisfy one of two requirements:.
The business operations were completely or partially suspended due to a federal government order related to COVID-19.
The business experienced a substantial decline in gross receipts. As pointed out earlier, for 2021, a significant decrease is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a substantial decline is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019, or a 20% decrease in gross invoices compared to the right away 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 portion (approximately 70%) of qualified wages paid to employees, consisting of certain health plan expenditures. The maximum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, businesses that received a Paycheck Security Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 permits organizations to claim the ERC even if they received a PPP loan. The exact same wages can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively expanded and improved, permitting eligible employers to claim the credit for certified earnings paid as far back as March 13, 2020. This retroactive provision offers a chance for services to change prior-year income tax return and receive refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their work income tax return, usually Type 941. The excess can be reimbursed to the employer if the credit goes beyond the amount of employment taxes owed.
It is necessary to note that the ERC arrangements and eligibility criteria have actually developed gradually. The very best course of action is to consult with a tax expert or check out the main IRS site for the most detailed and updated info relating to the ERC, including any current legislative changes or updates.
To get approved for the ERC, a company should meet one of the following criteria:.
Business operations were totally or partly suspended due to a government order related to COVID-19.
The business experienced a substantial decrease in gross invoices. For 2021, a considerable decline is specified as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
The ERC is offered to organizations of all sizes, including tax-exempt companies, but there are some exceptions. For instance, federal government entities and organizations that got a PPP loan might have limitations on declaring the credit.
The procedure for claiming the ERC includes finishing the essential types and including the credit on your work income tax return (generally Form 941). The exact time it takes to process the credit can differ based upon several factors, consisting of the intricacy of your business and the workload of the IRS. It’s suggested to seek advice from a tax expert for guidance specific to your situation.
There are numerous business that can help with the process of declaring the ERC. These include accounting companies, tax advisory services, and payroll provider. Some well-known business that provide help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research and call these companies straight to inquire about their services and costs.
Please keep in mind that the info supplied here is based upon general understanding and may not reflect the most recent updates or changes to the ERC. It is necessary to consult with a tax professional or check out the main internal revenue service site for the most updated and precise details relating to eligibility, declaring procedures, and available assistance.
Less than 100. The credit is based if the company had 100 or fewer employees on average in 2019.
on wages paid to all workers whether they actually worked or not. In other words, even if the.
workers worked full-time and made money for full time work, the employer still gets the credit.
Greater than 100. If the employer had more than 100 employees usually in 2019, then the credit is.
allowed only for incomes paid to staff members who did not work during the calendar quarter.
In both cases, “wages” includes not simply money payments however likewise a part of the expense of company.
provided health care. Economic Security Act Employee Retention Credit
Companies can be instantly reimbursed for the credit by decreasing the amount of payroll taxes they.