Lets talk first about Gaap Employee Retention Credit :
Our team here what do these people doing everyone in this room is helping teach people about ERC and uh always provide a beautiful breakfast and have individuals truly learn about the program we should head to the room where we are able to display a few of the checks that we are getting for business and I ‘d like to see that what is this this is uh numerous millions of dollars actually Kevin numerous millions of dollars so these are replicate copies of the letters that go to clients verifying that the check is on the way I indicate you understand if you just begin to take a 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 indicate it’s just I indicate think of how many actual clients that went through the program yeah this is the very end this is the celebration at the end when the check is confirmed the numbers are verified 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 chosen sure which’s when they pay so they don’t pay anything until they actually receive the cash they don’t pay bottom line Wonder trust anything until this letter is confirmed the check is on the way they transfer it into their savings account and they can really rely on Wonder trust that the procedure has been ended up and the number of you believe you’ve processed since you started this we’re about 35 000 of these for
about 6 billion dollars wow so plainly they understand what they’re doing and that’s what you need you require 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 Terrific here you’re at my YouTube channel we’re discussing something actually important today the employee retention credit which most of you have actually never heard of I certainly had not heard of it till very recently and discovered a lot about it due to the fact that this is most likely the most affordable expense of capital for any small business anywhere
anytime if you have workers between five and five hundred so I’ve got the professional 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 say offer me a loan it does not work there’s not a loan it’s an application and Josh is going to inform all of us about it and how to get it and why I have actually become yes the Ambassador and paid representative for this I enjoy this program it’s disappearing soon you got to learn all about it let’s talk worker retention credit Josh Fox what is an ERC let’s simply begin there so during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act offered businesses 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 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
remedy the money money payroll tax refund fine go on sorry I simply have to make sure we got that point I imply that’s a huge difference a loan versus money money I like money money that’s what we’re discussing 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 original cares Act is the ERC and yes Kevin it is a stunning hard check in the mail where you get real cash from the internal revenue service all right so let’s discuss how it works due to the fact that it seems 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 money is not for the owner not for people on the cap table not for investors it’s for workers right you had to have actually owned an organization but it’s based upon 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 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 3 and four of 2020 and you had quarters one 2 and three of 2021. okay so that’s how it’s measured you need to be on the W-2 throughout that duration now let’s talk my favorite part money how much can you return per staff member that was on a W-2 in those 6 quarters so the estimation in 2020 to be specific Kevin is 50 of the employee’s wage to a maximum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the employee’s salary to a maximum of 7 thousand per quarter how did that happen um they simply altered the rules in.
2021 versus because the turmoil of the pandemic so they wished 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 as much as five thousand Max and then what happens 21 000 Max in 2021 oh that’s how you develop twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty 6 thousand dollars per worker that is because that’s a great deal of cash it is now there’s a caution here the PPP cash would need to be lowered from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would minimize the 26 000 so what we’re seeing typically Kevin is if you took PPP cash somewhere around 10 thousand dollars a person so let’s state hypothetically you owned a dining establishment 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 big obviously now the big concern is why does nobody understand about this due to the fact that look when I initially became aware of this when I initially satisfied Josh you understand I’ve got great deals of investments in great deals of business I’m a significant advocate for entrepreneurship in America and make lots of numerous financial investments in business owners of which many suffered through the pandemic when I initially 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 very easy to do we had our CEOs call the banks they got their loans which were well should have and we utilized them sensibly to stay alive throughout the pandemic so when I found out about this I stated nah it can’t hold true however when I dug around I even called to my political leader pals Governor Senators they didn’t know about it I suggest that’s how you know that’s how misinformation is that there’s no information out there then a bunch of individuals told me well you can’t get it because you took the PPP also not true so let’s ask Josh why does no one know about the employee retention credit you know what’s intriguing you’re speaking about the banks Kevin since 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 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 chaos due to the fact that remember in the initial cares act you might refrain from doing both programs so if you had done PPP you could refrain from doing ERC in the initial program and when they changed the law in 2021 the banks were refraining from doing ERC since it’s not alone so you’re getting a tax refund so the federal government never made it clear to any person about how to.
do this does your CFO know how to do this not actually he or she’s never done it before 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 accountant no your accounting professional’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 been in business considering that 2009 and we’ve been dealing with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 business so a lot of our big big corporate clients have actually worked with bottom line to recuperate other federal 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 government programs.
The worker retention tax credit is a broad based refundable tax credit created to motivate.
companies to keep staff members on their payroll. The credit is 50% of up to $10,000 in earnings paid by an.
Due to the fact that of COVID-19 or whose gross receipts, employer whose service is totally or partially suspended.
decline by more than 50%.
1. The credit is available to all companies despite size consisting of tax exempt organizations. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
companies who take Small Business Loans.
2. To qualify, the company needs to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s service is totally 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 equivalent quarter in 2019. As soon as the.
employer’s gross receipts exceed 80% of an equivalent quarter in 2019 they no longer certify.
after completion of that quarter.
Calculation of the Credit.
The amount 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 certifying earnings varies by whether an employer had, typically, basically than.
100 employees in 2019.
Companies that specialize in ERC filing support normally provide proficiency and support to assist businesses browse the intricate procedure of declaring the credit. They can use numerous services, including:.
How is the employee retention credit calculated? Gaap Employee Retention Credit
Eligibility Evaluation: These business will examine your company’s eligibility for the ERC based upon aspects such as your market, earnings, and operations. If you satisfy the requirements for the credit and determine the optimum credit quantity you can claim, they can help figure out.
Paperwork and Calculation: ERC filing services will assist in collecting the essential paperwork, such as payroll records and monetary statements, to support your claim. They will likewise help compute the credit quantity based on eligible wages and other certifying expenses.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for previous quarters, these business can evaluate your past payroll records and financials to identify prospective opportunities for retroactive credits. They can help you change previous tax returns to declare these refunds.
Filing Help: Business specializing in ERC filings will prepare and send the needed forms and documentation in your place. This consists of completing Kind 941 or any other required tax forms.
Compliance and Updates: ERC policies and assistance have progressed over time. These companies remain upgraded with the most recent modifications and guarantee that your filings comply with the most present standards. If the Internal revenue service demands extra info or performs an audit related to your ERC claim, they can likewise provide ongoing support.
It is very important to research and vet any business offering ERC filing support to ensure their credibility and expertise. Look for established firms with experience in tax and payroll services, or consider connecting to trusted accounting companies or tax experts who provide ERC submitting support.
Bear in mind that while these business can supply valuable assistance, it’s constantly a good concept to have a fundamental understanding of the ERC requirements and process yourself. This will help you make notified choices and guarantee precise 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 objective of the ERC is to encourage organizations to retain 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 readily available to qualified employers, including for-profit companies, tax-exempt organizations, and particular governmental entities. To certify, companies should fulfill one of two criteria:.
The business operations were completely or partly suspended due to a government order related to COVID-19.
The business experienced a significant decrease in gross receipts. As discussed previously, for 2021, a considerable decline is specified as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a considerable decrease is specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decline in gross invoices compared to the immediately 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 portion (as much as 70%) of qualified incomes paid to employees, including 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: At first, organizations that got a Paycheck Protection Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 allows organizations to declare the ERC even if they received a PPP loan. The exact same salaries can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and boosted, enabling eligible companies to declare the credit for certified wages paid as far back as March 13, 2020. This retroactive arrangement supplies a chance for companies to amend prior-year tax returns and receive refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their work income tax return, typically Type 941. If the credit surpasses the amount of work taxes owed, the excess can be refunded to the employer.
It is very important to note that the ERC provisions and eligibility criteria have progressed with time. The best strategy is to consult with a tax professional or go to the main internal revenue service website for the most updated and detailed information regarding the ERC, consisting of any current legislative changes or updates.
To get approved for the ERC, a business should fulfill among the following requirements:.
The business operations were fully or partly suspended due to a federal government order related to COVID-19.
Business experienced a substantial decrease in gross invoices. 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% decline in gross invoices compared to the very same quarter in 2019, or a 20% decrease in gross receipts compared to the right away preceding quarter.
The ERC is available to companies of all sizes, consisting of tax-exempt companies, however there are some exceptions. Government entities and organizations that got a PPP loan might have restrictions on declaring the credit.
The process for declaring the ERC involves finishing the necessary forms and including the credit on your employment income tax return (typically Type 941). The exact time it requires to process the credit can vary based on several factors, including the intricacy of your service and the work of the internal revenue service. It’s recommended to talk to a tax expert for guidance specific to your circumstance.
There are a number of companies that can aid with the procedure of claiming the ERC. These include accounting firms, tax advisory services, and payroll service providers. Some well-known business that provide support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research and call these companies straight to inquire about their charges and services.
Please keep in mind that the information offered here is based on general understanding and might not reflect the most current updates or changes to the ERC. It is very important to seek advice from a tax expert or check out the official IRS website for the most precise and current information relating to eligibility, claiming treatments, and offered support.
Less than 100. The credit is based if the employer had 100 or fewer employees on average in 2019.
on salaries paid to all staff members whether they really worked or not. In other words, even if the.
workers worked full-time and earned money for full-time work, the employer still gets the credit.
Greater than 100. The credit is if the employer had more than 100 employees on average in 2019.
enabled only for salaries paid to staff members who did not work during the calendar quarter.
In both cases, “salaries” consists of not simply cash payments but likewise a part of the cost of company.
supplied healthcare. Gaap Employee Retention Credit
Employers can be right away compensated for the credit by decreasing the amount of payroll taxes they.