Lets talk first about Employee Retention Credit And Paycheck Protection Program :
Our team here what do these people doing everybody in this room is assisting teach people about ERC and uh constantly provide a beautiful breakfast and have individuals truly learn more about the program we ought to head to the room where we are able to display some of the checks that we are getting for companies and I ‘d like to see that what is this this is uh numerous millions of dollars literally Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to clients verifying that the check is on the method I indicate you know if you simply start to look at a few of these here I indicate this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s simply I suggest think of how many 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 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 have the ability to track it you understand when you
get this you know the check is opted for sure which’s when they pay so they don’t pay anything up until they in fact get the money they do not pay bottom line Wonder trust anything up until this letter is confirmed the check is on the method they deposit it into their savings account and they can really trust Wonder trust that the procedure has been completed and how many you believe you have actually processed because 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 which’s what you need 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 Fantastic here you’re at my YouTube channel we’re discussing something really important today the employee retention credit which most of you have never ever heard of I certainly hadn’t heard of it up until really recently and discovered a lot about it due to the fact that this is probably the most affordable cost of capital for any small company anywhere
anytime if you have staff members between 5 and five hundred so I have actually got the specialist with me this is Josh Fox he’s the creator and CEO of bottom line Ideas 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 just 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 tell 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 disappearing very soon you got to find out all 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 came up with the cares Act and the cares act used companies 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone it makes a big distinction right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the money cash payroll tax refund alright go on sorry I simply have to make sure we got that point I indicate that’s a huge difference a loan versus cash cash I like money money 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 original cares Act is the ERC and yes Kevin it is a stunning tough check in the mail where you get actual cash from the internal revenue service all right so let’s speak 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 person 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 investors it’s for workers right you needed to have owned an organization but it’s based upon you having W-2 workers in America not 10.99. As long as you had W-2 staff members 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 six months of 2021 on the W-2 right so there were 6 quarters the program was open well stroll 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. okay so that’s how it’s determined you need to be on the W-2 throughout that period now let’s talk my preferred part money just how much can you return per worker that was on a W-2 in those six quarters so the estimation in 2020 to be specific Kevin is 50 of the worker’s income to a maximum of 5 thousand dollars per staff member for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the worker’s wage to an optimum of seven thousand per quarter how did that happen um they just 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 employees 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 after that what takes place 21 000 Max in 2021 oh that’s how you develop twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty six thousand dollars per staff member that is since that’s a lot of cash it is now there’s a caveat here the PPP money would have to be decreased from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would lower the 26 000 so what we’re seeing typically Kevin is if you took PPP cash someplace around ten thousand dollars an individual so let’s state hypothetically you owned a restaurant in New York City where I’m from and you had a hundred employees and you took PPP money you would still get a million dollar in the mail from the internal revenue service so it’s big obviously now the big question is why does nobody understand about this because appearance when I first became aware of this when I initially met Josh you know I’ve got lots of investments in great deals of business I’m a major advocate for entrepreneurship in America and make lots of lots of financial investments in entrepreneurs of which many suffered through the pandemic when I first found out about this I called BS I don’t think it due to the fact that I utilize 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 and that were well should have and we used them wisely to stay alive throughout the pandemic so when I found out about this I said nah it can’t hold true but when I dug around I even called to my politician good friends Governor Senators they didn’t learn about it I imply that’s how you know that’s how misinformation is that there’s no details out there then a lot of individuals told me well you can’t get it because you took the PPP also not real so let’s ask Josh why does no one know about the employee retention credit you understand what’s interesting you’re discussing the banks Kevin since in the PPP loan procedure the federal government made it extremely 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 process in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply process procedure that’s all um and here there was chaos due to the fact that remember in the original cares act you might refrain from doing both programs so if you had actually done PPP you might not do ERC in the initial program and when they changed the law in 2021 the banks were not doing ERC because it’s not alone so you’re getting a tax refund so the government never made it clear to anybody about how to.
do this does your CFO understand how to do this not really she or he’s never ever 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 company your accounting professional no your accounting professional’s never done this before unless you have an account that entered into this service and bottom line my company Kevin has actually been in business given that 2009 and we have actually been dealing with the federal government and the state government to recuperate money for Fortune 500 Fortune 1000 business so a great deal of our huge big corporate clients have actually worked with bottom line to recuperate other federal government programs we have actually done sales tax and use tax unemployment tax work opportunity tax credits research and development tax credits unclaimed home property tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit developed to encourage.
companies to keep employees on their payroll. The credit is 50% of as much as $10,000 in salaries paid by an.
Since of COVID-19 or whose gross receipts, company whose service is completely or partially suspended.
decline by more than 50%.
1. The credit is offered to all companies regardless of size consisting of tax exempt companies. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) small.
companies who take Small Business Loans.
2. To certify, the company needs 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 receipts are below 50% of the similar quarter in 2019. As soon as the.
company’s gross invoices go above 80% of a similar quarter in 2019 they no longer qualify.
after completion of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the certifying salaries 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 earnings varies by whether a company had, on average, basically than.
100 employees in 2019.
Business that concentrate on ERC filing help normally offer knowledge and support to assist services browse the intricate process of claiming the credit. They can provide different services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit And Paycheck Protection Program
Eligibility Evaluation: These business will examine your business’s eligibility for the ERC based on aspects such as your industry, revenue, and operations. They can assist figure out if you fulfill the requirements for the credit and determine the optimum credit amount you can declare.
Paperwork and Computation: ERC filing services will assist in collecting the required documents, such as payroll records and financial statements, to support your claim. They will likewise help calculate the credit amount based on eligible incomes and other qualifying costs.
Retroactive Claim Review: If you are eligible to declare the ERC for previous quarters, these companies can review your past payroll records and financials to identify possible chances for retroactive credits. They can assist you modify previous income tax return to declare these refunds.
Filing Support: Companies concentrating on ERC filings will prepare and send the needed forms and documentation on your behalf. This includes completing Type 941 or any other necessary tax return.
Compliance and Updates: ERC regulations and assistance have progressed with time. These business stay updated with the most recent changes and ensure that your filings comply with the most current standards. They can likewise offer ongoing assistance if the IRS requests extra info or carries out an audit related to your ERC claim.
It’s important to research and vet any company providing ERC filing help to guarantee their credibility and know-how. Look for established firms with experience in tax and payroll services, or consider reaching out to relied on accounting firms or tax experts who use ERC filing support.
Bear in mind that while these companies can provide important support, it’s always a good concept to have a basic understanding of the ERC requirements and process yourself. This will assist you make notified decisions and ensure accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief procedures. The goal of the ERC is to encourage services to maintain and pay their workers 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 companies, tax-exempt organizations, and certain governmental entities. To qualify, companies must fulfill one of two requirements:.
The business operations were completely or partly suspended due to a federal government order related to COVID-19.
The business experienced a considerable decline in gross receipts. As discussed earlier, for 2021, a significant decline is specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decline in gross receipts compared to the right away preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit quantity amounts to a portion (as much as 70%) of certified earnings paid to staff members, consisting of particular health insurance expenditures. 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, services that received a Paycheck Defense Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 allows companies to claim the ERC even if they received a PPP loan. However, the same earnings can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively broadened and boosted, permitting eligible employers to declare the credit for certified salaries paid as far back as March 13, 2020. This retroactive provision supplies a chance for services to change prior-year income tax return and receive refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their work income tax return, normally Form 941. The excess can be refunded to the company if the credit surpasses the amount of employment taxes owed.
It is essential to note that the ERC arrangements and eligibility criteria have actually evolved gradually. The very best strategy is to seek advice from a tax expert or check out the main IRS website for the most in-depth and up-to-date information regarding the ERC, consisting of any current legislative modifications or updates.
To get approved for the ERC, a business must satisfy one of the following requirements:.
Business operations were fully or partly suspended due to a government order related to COVID-19.
Business experienced a considerable decrease in gross receipts. For 2021, a considerable decline is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decline in gross receipts compared to the exact same quarter in 2019, or a 20% decrease in gross invoices compared to the immediately preceding quarter.
The ERC is available to services of all sizes, consisting of tax-exempt companies, however there are some exceptions. For example, government entities and organizations that got a PPP loan may have limitations on declaring the credit.
The process for declaring the ERC includes completing the necessary forms and including the credit on your work tax return (generally Type 941). The exact time it takes to process the credit can differ based on a number of elements, including the intricacy of your organization and the work of the IRS. It’s recommended to talk to a tax expert for assistance specific to your circumstance.
There are a number of companies that can assist with the procedure of declaring the ERC. Some popular business that use help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the details offered here is based on basic understanding and may not reflect the most recent updates or modifications to the ERC. It is necessary to speak with a tax expert or check out the official IRS site for the most precise and updated information regarding eligibility, declaring treatments, and available help.
Less than 100. The credit is based if the employer had 100 or less staff members on average in 2019.
on salaries paid to all staff members whether they in fact worked or not. To put it simply, even if the.
employees worked full-time and made money for full-time work, the employer still gets the credit.
Greater than 100. The credit is if the company had more than 100 staff members on average in 2019.
permitted only for earnings paid to staff members who did not work throughout the calendar quarter.
In both cases, “incomes” includes not just money payments but also a portion of the cost of employer.
supplied health care. Employee Retention Credit And Paycheck Protection Program
Companies can be immediately reimbursed for the credit by decreasing the quantity of payroll taxes they.