Lets talk first about Employee Retention Credit Cash Or Accrual Basis :
Our team here what do these guys doing everyone in this space is helping teach individuals about ERC and uh always offer a gorgeous breakfast and have individuals really learn more about the program we need to head to the space where we have the ability 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 literally Kevin numerous countless dollars so these are duplicate copies of the letters that go to customers confirming that the check is on the method I suggest you know if you just start to take a look at some of these here I imply this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I imply 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 validated the numbers are validated and the check is on the mail in the mail from the internal revenue service heading to the client so that’s how you have the ability to track it you know when you
get this you understand the check is opted for sure which’s when they pay so they don’t pay anything up until they actually get the money they don’t pay bottom line Wonder trust anything up until this letter is verified the check is on the way they transfer it into their bank account and they can genuinely trust Wonder trust that the procedure has actually been finished and the number of you think you’ve processed because you began this we have to do with 35 000 of these for
about 6 billion dollars wow so clearly they know 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 Wonderful here you’re at my YouTube channel we’re talking about something truly crucial today the staff member retention credit which most of you have actually never ever heard of I certainly had not become aware of it until very just recently and found out a lot about it because this is probably the lowest cost of capital for any small business anywhere
anytime if you have workers between five 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 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 simply phone your bank manager and state give me a loan it does not 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 like this program it’s disappearing soon you got to discover everything about it let’s talk worker retention credit Josh Fox what is an ERC let’s just start there so throughout the Trump Administration when President Trump was enacted they developed 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 nearly everybody it makes a big difference right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
fix the cash money payroll tax refund all right go on sorry I just have to make certain we got that point I imply that’s a big distinction a loan versus cash cash I like cash cash 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 original cares Act is the ERC and yes Kevin it is a gorgeous hard check in the mail where you get real money from the internal revenue service all right so let’s discuss how it works because it seems like to me if it’s a if it’s employee retention credit that person had to be a worker so I’m going to make the Presumption 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 actually owned a service but it’s based upon you having W-2 employees in America not 10.99. so 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 need to be on payroll for the very first 6 months of 2021 on the W-2 appropriate so there were 6 quarters the program was open well walk us through the 6 quarters so you had quarters two 3 and 4 of 2020 and you had quarters one two and 3 of 2021. okay so that’s how it’s determined you have to be on the W-2 during that period now let’s talk my preferred part money just how much can you return per staff member that was on a W-2 in those six quarters so the computation in 2020 to be specific Kevin is 50 of the worker’s wage to a maximum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers escalated to 70 of the employee’s salary to a maximum of 7 thousand per quarter how did that happen um they just 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 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 happens 21 000 Max in 2021 oh that’s how you come up with twenty 6 thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty six thousand dollars per employee that is because that’s a great deal of cash it is now there’s a caveat here the PPP money would have to be reduced from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would lower the 26 000 so what we’re seeing usually Kevin is if you took PPP money someplace around ten 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 money you would still get a million dollar in the mail from the IRS so it’s big undoubtedly now the big concern is why does nobody know about this due to the fact that appearance when I initially became aware of this when I initially fulfilled Josh you understand I have actually got great deals of financial investments in lots of companies I’m a major advocate for entrepreneurship in America and make many many 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 money center Banks to get it it was extremely easy to do we had our CEOs call the banks they got their loans and that were well deserved and we used them sensibly to stay alive during 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 political leader friends Governor Senators they didn’t learn about it I mean that’s how you understand that’s how false information is that there’s no info out there then a lot of individuals told 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 staff member retention credit you understand what’s interesting you’re speaking about 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 big 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 procedure that’s all um and here there was turmoil due to the fact that remember in the initial cares act you might not do both programs so if you had actually done PPP you could refrain from doing ERC in the original 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 ever made it clear to anybody about how to.
do this does your CFO know how to do this not actually she or he’s never done it in the past do the banks do it nope the banks do not do it the payroll companies yeah some 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 went into this service and bottom line my company Kevin has stayed in business considering that 2009 and we have actually been working with the federal government and the state government to recuperate money for Fortune 500 Fortune 1000 business so a lot of our huge big corporate clients have dealt with bottom line to recuperate other federal government programs we have actually 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 government programs.
The worker retention tax credit is a broad based refundable tax credit developed to motivate.
employers to keep workers on their payroll. The credit is 50% of approximately $10,000 in earnings paid by an.
Because of COVID-19 or whose gross invoices, employer whose service is totally or partly suspended.
decrease by more than 50%.
1. The credit is readily available to all companies despite size including tax exempt companies. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) little.
organizations who take Small company Loans.
2. To certify, the employer needs to satisfy one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s organization is totally 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 equivalent quarter in 2019. When the.
employer’s gross invoices go above 80% of a similar quarter in 2019 they no longer qualify.
after the end of that quarter.
Computation of the Credit.
The quantity of the credit is 50% of the qualifying earnings paid up to $10,000 in overall.
It works for earnings paid after March 13th and prior to December 31, 2020.
The definition of qualifying wages differs by whether a company had, typically, more or less than.
100 employees in 2019.
Companies that specialize in ERC filing support generally supply knowledge and assistance to help businesses browse the complicated process of declaring the credit. They can offer numerous services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Cash Or Accrual Basis
Eligibility Assessment: These business will evaluate your organization’s eligibility for the ERC based on aspects such as your market, profits, and operations. If you fulfill the requirements for the credit and identify the optimum credit quantity you can declare, they can help identify.
Documentation and Calculation: ERC filing services will assist in gathering the needed documentation, such as payroll records and monetary statements, to support your claim. They will likewise assist calculate the credit quantity based on qualified incomes and other certifying expenditures.
Retroactive Claim Review: If you are eligible to claim the ERC for previous quarters, these companies can review your previous payroll records and financials to identify potential opportunities for retroactive credits. They can assist you modify prior income tax return to declare these refunds.
Filing Assistance: Business specializing in ERC filings will prepare and submit the needed kinds and documents in your place. This consists of finishing Kind 941 or any other necessary tax forms.
Compliance and Updates: ERC guidelines and guidance have evolved with time. These business stay updated with the current changes and guarantee that your filings adhere to the most current standards. They can likewise provide ongoing support if the internal revenue service requests additional information or performs an audit related to your ERC claim.
It is necessary to research and vet any business providing ERC filing support to ensure their credibility and expertise. Search for established companies with experience in tax and payroll services, or think about connecting to relied on accounting companies or tax experts who offer ERC filing assistance.
Bear in mind that while these companies can supply valuable help, it’s always an excellent concept to have a standard understanding of the ERC requirements and procedure yourself. This will help you make informed choices and make sure precise filings.
The Worker Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief procedures. The objective of the ERC is to encourage companies to retain and pay their staff members 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 qualified companies, consisting of for-profit services, tax-exempt companies, and specific governmental entities. To qualify, employers need to meet one of two requirements:.
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 invoices. As pointed out earlier, 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 substantial decline is specified 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 right away preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit amount is equal to a percentage (up to 70%) of certified earnings paid to workers, including particular health plan 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: Initially, services that got an Income Defense Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 permits companies to declare the ERC even if they got a PPP loan. The very same wages can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and enhanced, enabling eligible companies to claim the credit for qualified earnings paid as far back as March 13, 2020. This retroactive arrangement supplies an opportunity for companies to modify prior-year income tax return and get refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their work income tax return, typically Type 941. If the credit exceeds the amount of work taxes owed, the excess can be refunded to the employer.
It’s important to keep in mind that the ERC provisions and eligibility criteria have developed with time. The best course of action is to speak with a tax professional or check out the main internal revenue service website for the most current and detailed details concerning the ERC, consisting of any recent legal modifications or updates.
To qualify for the ERC, a business needs to meet among the following criteria:.
Business operations were fully or partially suspended due to a government order related to COVID-19.
Business experienced a significant decrease in gross receipts. For 2021, a considerable decline is defined as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a considerable decrease is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross receipts compared to the right away preceding quarter.
The ERC is readily available to businesses of all sizes, consisting of tax-exempt organizations, but there are some exceptions. For instance, federal government entities and businesses that received a PPP loan may have limitations on declaring the credit.
The procedure for claiming the ERC includes finishing the necessary kinds and consisting of the credit on your work tax return (normally Form 941). The exact time it takes to process the credit can vary based upon a number of factors, consisting of the intricacy of your company and the work of the internal revenue service. It’s suggested to seek advice from a tax professional for assistance particular to your situation.
There are several business that can help with the process of claiming the ERC. Some well-known business that use support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the details supplied here is based on general knowledge and may not show the most current updates or changes to the ERC. It is necessary to seek advice from a tax expert or go to the official internal revenue service site for the most accurate and current details concerning eligibility, claiming procedures, and readily available help.
Less than 100. If the company had 100 or less staff members usually in 2019, then the credit is based.
on earnings paid to all employees whether they actually worked or not. In other words, even if the.
workers worked full time and got paid for full time work, the company still gets the credit.
Greater than 100. If the company had more than 100 staff members on average in 2019, then the credit is.
enabled only for salaries paid to staff members who did not work throughout the calendar quarter.
In both cases, “earnings” consists of not just cash payments however also a part of the expense of employer.
provided health care. Employee Retention Credit Cash Or Accrual Basis
Employers can be instantly repaid for the credit by decreasing the amount of payroll taxes they.