Lets talk first about Employee Retention Credit On Financial Statements :
Our team here what do these men doing everybody in this room is assisting teach individuals about ERC and uh constantly offer a gorgeous breakfast and have people really discover the program we should head to the room where we are able to show a few of the checks that we are getting for companies and I wish to see that what is this this is uh numerous countless dollars literally Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to customers verifying that the check is on the way I indicate you know if you just begin to take a look at a few of these here I imply this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s simply I mean consider the number of actual customers 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 verified and the check is on the mail in the mail from the IRS heading to the client so that’s how you have the ability to track it you understand when you
get this you understand the check is gone for sure and that’s when they pay so they don’t pay anything till they really receive the cash they don’t pay bottom line Wonder trust anything up until this letter is validated the check is on the way they transfer it into their savings account and they can truly rely on Wonder trust that the process has actually been completed and how many you think you have actually processed considering that you started this we have to do with 35 000 of these for
about 6 billion dollars wow so plainly they know what they’re doing which’s what you require you need professionals 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 Terrific 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 actually never ever become aware of I definitely hadn’t become aware of it until really just recently and discovered a lot about it since this is probably the lowest cost of capital for any small business anywhere
anytime if you have staff members in between five and five hundred so I have actually got the specialist with me this is Josh Fox he’s the founder and CEO of bottom line Concepts they’re the biggest processor of these ERC credits this is a 170 page program so it’s challenging this isn’t like PPP we simply call up your bank manager and say provide me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to tell all of us about it and how to get it and why I have actually ended up being yes the Ambassador and paid spokesperson for this I enjoy this program it’s disappearing soon you got to learn all 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 came up with the cares Act and the cares act provided organizations three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody it makes a huge difference right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
remedy the money cash payroll tax refund okay go on sorry I simply have to make certain we got that point I suggest that’s a big difference a loan versus cash cash I like money money that’s what we’re talking about fine 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 IRS all right so let’s speak about how it works since it seems like to me if it’s a if it’s staff member retention credit that individual had to be a staff member so I’m going to make the Assumption this money 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 an organization however it’s based upon you having W-2 workers 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 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 proper so there were 6 quarters the program was open well walk 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. alright so that’s how it’s determined you need to be on the W-2 throughout that duration now let’s talk my preferred part money just how much can you return per employee that was on a W-2 in those six quarters so the calculation in 2020 to be specific Kevin is 50 of the employee’s wage to a maximum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the worker’s income to an optimum of seven thousand per quarter how did that take place um they simply altered the rules in.
2021 versus since the turmoil of the pandemic so they wished to even get more to keep those workers on payroll 100 so if you can get 5 000 per person Max in twenty that was 50 in 2020 approximately five thousand Max and after that what takes place 21 000 Max in 2021 oh that’s how you come up with 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 great deal of money it is now there’s a caveat here the PPP cash would have to be decreased 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 cash someplace around ten thousand dollars a person so let’s state hypothetically you owned a restaurant 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 internal revenue service so it’s substantial certainly now the big question is why does nobody know about this due to the fact that appearance when I initially found out about this when I initially met Josh you understand I have actually got lots of investments in lots of companies I’m a significant advocate for entrepreneurship in America and make many lots of financial investments in business owners of which lots of suffered through the pandemic when I first found out about this I called BS I don’t believe it because I utilize the PPP we went through the cash 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 utilized them carefully to stay alive throughout the pandemic so when I became aware of this I said nah it can’t hold true but when I dug around I even contacted us to my politician buddies Governor Senators they didn’t know about it I suggest that’s how you understand that’s how false information is that there’s no info out there then a lot of people informed me well you can’t get it since you took the PPP likewise not real so let’s ask Josh why does no one learn about the staff member retention credit you know what’s fascinating you’re talking about the banks Kevin because 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 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 turmoil because keep in mind in the original cares act you might refrain from doing both programs so if you had done PPP you could not do ERC in the original program and when they altered the law in 2021 the banks were not doing ERC because 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 understand 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 do not do it the payroll companies yeah a few of them are doing it as a payroll business your accounting professional no your accountant’s never done this before unless you have an account that went into this company and bottom line my company Kevin has actually been in business because 2009 and we’ve been dealing with the federal government and the state federal government to recuperate money for Fortune 500 Fortune 1000 business so a great deal of our big big corporate clients have actually worked with bottom line to recover 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 real estate tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit created to motivate.
companies to keep employees on their payroll. The credit is 50% of approximately $10,000 in incomes paid by an.
Because of COVID-19 or whose gross receipts, company whose company is completely or partially suspended.
decline by more than 50%.
1. The credit is available to all companies no matter size consisting of tax exempt organizations. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) little.
companies who take Small Business Loans.
2. To qualify, the company has to satisfy one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s company is completely or partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the company’s gross receipts are listed below 50% of the comparable quarter in 2019. As soon as the.
company’s gross invoices go above 80% of an equivalent quarter in 2019 they no longer qualify.
after the end 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 is effective for salaries paid after March 13th and prior to December 31, 2020.
The meaning of certifying salaries differs by whether an employer had, on average, more or less than.
100 staff members in 2019.
Business that specialize in ERC filing support typically offer expertise and support to help businesses navigate the intricate procedure of claiming the credit. They can provide various services, including:.
How is the employee retention credit calculated? Employee Retention Credit On Financial Statements
Eligibility Evaluation: These business will assess your company’s eligibility for the ERC based on factors such as your industry, earnings, and operations. If you meet the requirements for the credit and identify the maximum credit amount you can claim, they can assist figure out.
Documents and Calculation: ERC filing services will help in collecting the essential documents, such as payroll records and financial declarations, to support your claim. They will also assist compute the credit amount based on qualified earnings and other certifying expenditures.
Retroactive Claim Review: If you are eligible to declare the ERC for prior quarters, these companies can examine your previous payroll records and financials to identify prospective opportunities for retroactive credits. They can assist you amend prior income tax return to claim these refunds.
Filing Support: Business concentrating on ERC filings will prepare and send the essential types and paperwork in your place. This consists of finishing Kind 941 or any other required tax forms.
Compliance and Updates: ERC regulations and guidance have evolved in time. These business remain upgraded with the latest changes and guarantee that your filings comply with the most present standards. They can also supply continuous assistance if the internal revenue service demands additional information or performs an audit related to your ERC claim.
It is necessary to research study and veterinarian any company using ERC filing support to guarantee their trustworthiness and proficiency. Try to find established companies with experience in tax and payroll services, or think about connecting to relied on accounting firms or tax professionals who provide ERC submitting assistance.
Bear in mind that while these business can offer important help, it’s constantly a good concept to have a standard understanding of the ERC requirements and procedure yourself. This will assist 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 measures. The objective of the ERC is to encourage businesses to maintain and pay their employees during the pandemic, even if their operations have actually been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to eligible companies, including for-profit companies, tax-exempt organizations, and particular governmental entities. To certify, employers should meet one of two requirements:.
Business operations were completely or partly suspended due to a government order related to COVID-19.
The business experienced a considerable decrease in gross invoices. As discussed earlier, for 2021, a substantial decline is specified as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a substantial decline is defined as a 20% decline 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 company’s share of Social Security taxes. The credit quantity amounts to a portion (as much as 70%) of qualified earnings paid to employees, consisting of specific health plan expenses. The optimum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, services that received an Income Defense Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 permits services to declare the ERC even if they received a PPP loan. However, the exact same incomes can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and enhanced, enabling eligible employers to claim the credit for certified earnings paid as far back as March 13, 2020. This retroactive arrangement supplies an opportunity for organizations to modify prior-year tax returns and receive refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their employment income tax return, usually Form 941. If the credit surpasses the quantity of employment taxes owed, the excess can be reimbursed to the employer.
It is very important to note that the ERC arrangements and eligibility criteria have actually developed in time. The best strategy is to speak with a tax expert or go to the official IRS site for the most current and detailed details regarding the ERC, including any recent legal modifications or updates.
To receive the ERC, a service needs to satisfy one of the following criteria:.
Business operations were fully or partly suspended due to a federal government order related to COVID-19.
Business experienced a significant decrease in gross receipts. For 2021, a substantial decline is specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decline 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.
The ERC is available to companies of all sizes, including tax-exempt companies, but there are some exceptions. Government entities and services that got a PPP loan may have restrictions on claiming the credit.
The process for claiming the ERC involves completing the necessary forms and consisting of the credit on your employment income tax return (generally Kind 941). The exact time it requires to process the credit can differ based upon several elements, consisting of the complexity of your service and the workload of the IRS. It’s recommended to talk to a tax professional for guidance particular to your scenario.
There are a number of companies that can aid with the process of declaring the ERC. These include accounting companies, tax advisory services, and payroll provider. Some popular business that provide assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research and get in touch with these business straight to inquire about their costs and services.
Please note that the information provided here is based upon basic knowledge and might not reflect the most recent updates or modifications to the ERC. It is necessary to talk to a tax expert or check out the official internal revenue service site for the most updated and accurate info regarding eligibility, declaring procedures, and readily available support.
Less than 100. The credit is based if the employer had 100 or fewer workers on average in 2019.
on wages paid to all employees whether they really worked or not. In other words, even if the.
staff members 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 staff members on average in 2019, then the credit is.
enabled only for wages paid to workers who did not work throughout the calendar quarter.
In both cases, “earnings” includes not just cash payments but also a portion of the expense of employer.
provided healthcare. Employee Retention Credit On Financial Statements
Employers can be instantly compensated for the credit by minimizing the quantity of payroll taxes they.