Lets talk first about Employee Retention Credit Financial Statement Disclosure Example :
Our team here what do these guys doing everybody in this room is assisting teach individuals about ERC and uh always provide a gorgeous breakfast and have individuals truly learn about the program we ought to head to the room where we have the ability to show some of the checks that we are getting for business and I ‘d like to see that what is this this is uh hundreds of millions of dollars literally Kevin hundreds of countless dollars so these are duplicate copies of the letters that go to clients confirming that the check is on the method I indicate you know if you simply start to 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 imply it’s just I indicate think about the number of real 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 internal revenue service heading to the client so that’s how you’re able to track it you understand when you
receive this you understand the check is opted for sure which’s when they pay so they don’t pay anything till they actually get the money they don’t pay bottom line Wonder trust anything until this letter is confirmed the check is on the way they deposit it into their savings account and they can truly rely on Wonder trust that the process has actually been ended up and how many you believe you have actually processed because you started this we’re about 35 000 of these for
about 6 billion dollars wow so clearly they understand what they’re doing which’s what you need you require 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 important today the staff member retention credit which most of you have never ever become aware of I definitely hadn’t become aware of it up until really just recently and found out a lot about it because this is most likely the most affordable expense of capital for any small company anywhere
anytime if you have workers between 5 and five hundred so I have actually got the expert with me this is Josh Fox he’s the creator and CEO of bottom line Principles they’re the largest processor of these ERC credits this is a 170 page program so it’s challenging this isn’t like PPP we just contact your bank supervisor and say provide 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 enjoy this program it’s going away soon you got to discover everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just start there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act used 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 distinction right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
remedy the money money payroll tax refund fine go on sorry I just have to make certain we got that point I imply that’s a big difference a loan versus cash cash I like cash cash 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 original cares Act is the ERC and yes Kevin it is a lovely hard 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 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 money is not for the owner not for people on the cap table not for investors it’s for workers right you needed to have actually owned a company but it’s based on you having W-2 staff members 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 qualified 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 two three and four of 2020 and you had quarters one 2 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 favorite part cash how much can you return per worker that was on a W-2 in those 6 quarters so the estimation in 2020 to be exact Kevin is 50 of the employee’s income to a maximum of five thousand dollars per worker 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 just altered the rules in.
2021 versus because the mayhem of the pandemic so they wished 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 as much as 5 thousand Max and then what takes place 21 000 Max in 2021 oh that’s how you create twenty 6 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 money it is now there’s a caveat here the PPP cash would need to be minimized 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 on average Kevin is if you took PPP money somewhere around ten thousand dollars a person 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 IRS so it’s substantial obviously now the huge concern is why does no one know about this because appearance when I initially found out about this when I first met Josh you know I’ve got lots of investments in great deals of business I’m a major supporter for entrepreneurship in America and make many numerous financial investments in entrepreneurs of which many suffered through the pandemic when I initially heard about this I called BS I do not believe it due to the fact that I utilize 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 been worthy of and we used them carefully to survive throughout the pandemic so when I became aware of this I stated nah it can’t hold true however when I dug around I even contacted us to my politician pals Guv Senators they didn’t learn about it I indicate that’s how you know that’s how false information is that there’s no information 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 worker retention credit you understand what’s intriguing you’re talking about the banks Kevin due to the fact that in the PPP loan procedure the federal government made it really 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 turmoil due to the fact that remember in the initial cares act you could not do both programs so if you had actually done PPP you might not do ERC in the original 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 ever made it clear to anyone about how to.
do this does your CFO know how to do this not really she or he’s never ever done it in the past do the banks do it nope the banks don’t do it the payroll business yeah some of them are doing it as a payroll business your accountant no your accounting professional’s never done this before unless you have an account that went into this organization and bottom line my company Kevin has stayed in business given that 2009 and we’ve been working with the federal government and the state government to recover money for Fortune 500 Fortune 1000 business so a great deal of our huge big corporate customers have actually worked with bottom line to recover other government programs we have actually done sales tax and use tax joblessness tax work chance 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 developed to motivate.
companies to keep workers on their payroll. The credit is 50% of up to $10,000 in earnings paid by an.
Because of COVID-19 or whose gross invoices, company whose organization is totally or partially suspended.
decline by more than 50%.
Schedule.
1. The credit is available to all companies no matter size including tax exempt companies. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
companies who take Small company Loans.
2. To qualify, the company has to meet one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s service is totally or partially suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are listed below 50% of the comparable quarter in 2019. As soon as the.
company’s gross invoices go above 80% of a similar quarter in 2019 they no longer certify.
after completion of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the qualifying earnings paid up to $10,000 in total.
It is effective for earnings paid after March 13th and before December 31, 2020.
The meaning of certifying salaries differs by whether a company had, typically, more or less than.
100 staff members in 2019.
Business that specialize in ERC filing help generally provide competence and assistance to assist companies navigate the complex procedure of declaring the credit. They can provide various services, including:.
How is the employee retention credit calculated? Employee Retention Credit Financial Statement Disclosure Example
Eligibility Assessment: These companies will examine your service’s eligibility for the ERC based on aspects such as your market, profits, and operations. If you satisfy the requirements for the credit and recognize the optimum credit quantity you can declare, they can help determine.
Documents and Calculation: ERC filing services will help in gathering the needed paperwork, such as payroll records and monetary statements, to support your claim. They will also help calculate the credit amount based on qualified incomes and other certifying expenses.
Retroactive Claim Review: If you are eligible to declare the ERC for previous quarters, these business can evaluate your previous payroll records and financials to determine possible opportunities for retroactive credits. They can assist you change previous tax returns to claim these refunds.
Filing Help: Business concentrating on ERC filings will prepare and send the essential types and documentation in your place. This consists of completing Kind 941 or any other necessary tax return.
Compliance and Updates: ERC regulations and assistance have evolved with time. These companies remain updated with the latest changes and ensure that your filings comply with the most present standards. They can also supply continuous assistance if the IRS demands additional information or carries out an audit related to your ERC claim.
It is necessary to research and veterinarian any business offering ERC filing assistance to guarantee their reliability and know-how. Look for recognized companies with experience in tax and payroll services, or think about reaching out to trusted accounting firms or tax professionals who provide ERC submitting assistance.
Keep in mind that while these companies can supply important help, it’s constantly a great concept to have a standard understanding of the ERC requirements and procedure yourself. This will assist you make notified decisions and guarantee precise filings.
The Worker Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief measures. The goal of the ERC is to encourage companies to keep and pay their employees during the pandemic, even if their operations have been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to qualified employers, consisting of for-profit services, tax-exempt companies, and specific governmental entities. To qualify, employers need to meet one of two requirements:.
The business operations were fully or partly suspended due to a government order related to COVID-19.
Business experienced a considerable decline in gross receipts. As discussed 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 substantial decline is defined as a 20% decrease in gross receipts compared to the 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 amount is equal to a portion (up to 70%) of qualified salaries paid to staff members, including specific health plan expenses. The maximum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, organizations that received a Paycheck Protection Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 enables services to claim the ERC even if they got a PPP loan. The same incomes can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and boosted, allowing eligible companies to declare the credit for qualified earnings paid as far back as March 13, 2020. This retroactive provision provides a chance for organizations to amend prior-year tax returns and receive refunds.
Declaring the Credit: Employers can declare the ERC by reporting it on their work tax returns, generally Kind 941. If the credit goes beyond the quantity of employment taxes owed, the excess can be reimbursed to the employer.
It is essential to keep in mind that the ERC provisions and eligibility criteria have actually evolved gradually. The best course of action is to seek advice from a tax professional or go to the official IRS site for the most updated and detailed details concerning the ERC, including any current legislative modifications or updates.
To qualify for the ERC, a business must fulfill one of the following criteria:.
The business operations were completely or partially suspended due to a federal government order related to COVID-19.
Business experienced a considerable decrease in gross invoices. For 2021, a considerable decline is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decrease is specified 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 services of all sizes, including tax-exempt organizations, however there are some exceptions. Government entities and services that received a PPP loan may have constraints 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 requires to process the credit can vary based on several elements, including the intricacy of your business and the workload of the IRS. It’s suggested to speak with a tax professional for assistance specific to your situation.
There are numerous companies that can assist with the procedure of declaring the ERC. These include accounting firms, tax advisory services, and payroll company. Some popular business that offer support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research study and contact these business straight to inquire about their costs and services.
Please note that the info offered here is based on basic knowledge and might not reflect the most current updates or changes to the ERC. It is very important to talk to a tax professional or check out the official IRS site for the most precise and current details concerning eligibility, claiming procedures, and readily available help.
Less than 100. The credit is based if the company had 100 or fewer staff members on average in 2019.
on wages paid to all employees whether they really worked or not. Simply put, even if the.
workers 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 staff members on average in 2019.
permitted only for incomes paid to workers who did not work during the calendar quarter.
In both cases, “salaries” consists of not just cash payments but also a portion of the cost of company.
provided health care. Employee Retention Credit Financial Statement Disclosure Example
Payment.
Companies can be right away reimbursed for the credit by lowering the quantity of payroll taxes they.