Lets talk first about Infrastructure Investment And Jobs Act Employee Retention Credit :
Our group here what do these people doing everybody in this space is helping teach individuals about ERC and uh always provide a beautiful breakfast and have individuals actually discover the program we need to head to the room where we are able to show some of the checks that we are getting for business and I wish to see that what is this this is uh numerous countless dollars literally Kevin numerous countless dollars so these are replicate copies of the letters that go to customers validating that the check is on the method I mean you understand if you simply begin 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 mean it’s just I imply think of the number of actual 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 IRS heading to the customer so that’s how you have the ability to track it you know when you
receive this you know the check is chosen sure which’s when they pay so they don’t pay anything until they in fact get the money they do not pay bottom line Wonder trust anything till this letter is confirmed the check is on the method they transfer it into their checking account and they can genuinely trust Wonder trust that the procedure has actually been finished and how many you think you’ve processed given that you began this we have to do with 35 000 of these for
about 6 billion dollars wow so clearly they understand what they’re doing which’s what you need 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 Fantastic here you’re at my YouTube channel we’re talking about something actually crucial today the worker retention credit which the majority of you have never ever become aware of I definitely hadn’t heard of it up until extremely recently and found out a lot about it because this is probably the most affordable expense of capital for any small business anywhere
anytime if you have workers in between five and five hundred so I’ve got the professional with me this is Josh Fox he’s the founder and CEO of bottom line Principles they’re the largest processor of these ERC credits this is a 170 page program so it’s not easy this isn’t like PPP we just call up your bank manager and say offer 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’ve ended up being yes the Ambassador and paid spokesperson for this I love this program it’s going away soon you got to find out everything about it let’s talk worker retention credit Josh Fox what is an ERC let’s just begin 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 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everyone it makes a huge difference right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the money money payroll tax refund okay go on sorry I just have to ensure we got that point I suggest that’s a big distinction a loan versus cash money I like money money that’s what we’re discussing all right 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 gorgeous hard check in the mail where you get real cash from the internal revenue service all right so let’s speak about how it works since it sounds like to me if it’s a if it’s worker retention credit that individual needed to be a staff member 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 staff members right you needed to have owned a company however it’s based upon you having W-2 staff members 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 have to be on payroll for the very first 6 months of 2021 on the W-2 appropriate so there were six 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. all right so that’s how it’s measured you need to be on the W-2 throughout that duration now let’s talk my preferred part cash how much can you return per employee that was on a W-2 in those six quarters so the estimation in 2020 to be exact Kevin is 50 of the staff member’s salary 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 employee’s salary to a maximum of seven thousand per quarter how did that occur um they simply changed 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 5 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 worker that is because that’s a lot of cash it is now there’s a caution here the PPP money would have to be minimized from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would decrease the 26 000 so what we’re seeing on average Kevin is if you took PPP cash someplace around 10 thousand dollars an individual so let’s state hypothetically you owned a restaurant in New york city 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 IRS so it’s substantial certainly now the huge question is why does no one learn about this because look when I first became aware of this when I initially fulfilled Josh you understand I have actually got lots of investments in great deals of companies I’m a significant advocate for entrepreneurship in America and make lots of lots of investments in entrepreneurs of which numerous suffered through the pandemic when I initially found out about this I called BS I do not believe it because I use the PPP we went through the money center Banks to get it it was really easy to do we had our CEOs call the banks they got their loans which were well deserved and we used them wisely to survive during the pandemic so when I heard about this I said nah it can’t be true but when I dug around I even contacted us to my politician good friends Guv Senators they didn’t know about it I imply that’s how you understand that’s how false information is that there’s no information out there then a lot of people informed me well you can’t get it since you took the PPP likewise not true so let’s ask Josh why does no one know about the worker retention credit you know what’s fascinating you’re talking about the banks Kevin due to the fact that 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 country 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 due to the fact that keep in mind in the original cares act you might not do both programs so if you had actually done PPP you might refrain from doing 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 government never made it clear to any person about how to.
do this does your CFO know how to do this not truly she or he’s never done it before do the banks do it nope the banks don’t do it the payroll business yeah a few of them are doing it as a payroll business your accountant no your accountant’s never done this prior to unless you have an account that went into this company and bottom line my company Kevin has actually stayed in business since 2009 and we have actually been working with the federal government and the state federal government to recuperate money for Fortune 500 Fortune 1000 business so a great deal of our huge big business customers 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 property tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit designed to encourage.
companies to keep staff members on their payroll. The credit is 50% of up to $10,000 in incomes paid by an.
Because of COVID-19 or whose gross receipts, employer whose organization is completely or partially suspended.
decline by more than 50%.
1. The credit is offered to all employers regardless of size including tax exempt organizations. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
companies who take Small company Loans.
2. To qualify, the employer needs to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s organization is totally or partly suspended by government order due to COVID-19.
during the calendar quarter or.
o the company’s gross invoices are listed below 50% of the comparable quarter in 2019. Once the.
employer’s gross invoices go above 80% of a comparable quarter in 2019 they no longer qualify.
after completion of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the certifying incomes paid up to $10,000 in overall.
It works for wages paid after March 13th and before December 31, 2020.
The definition of certifying salaries varies by whether an employer had, on average, more or less than.
100 staff members in 2019.
Companies that concentrate on ERC filing support typically supply know-how and assistance to assist companies navigate the complicated process of declaring the credit. They can use various services, consisting of:.
How is the employee retention credit calculated? Infrastructure Investment And Jobs Act Employee Retention Credit
Eligibility Evaluation: These business will examine your company’s eligibility for the ERC based on elements such as your market, revenue, and operations. They can assist determine if you satisfy the requirements for the credit and recognize the maximum credit amount you can claim.
Paperwork and Calculation: ERC filing services will assist in collecting the needed documents, such as payroll records and financial statements, to support your claim. They will likewise assist determine the credit quantity based on qualified incomes and other certifying expenditures.
Retroactive Claim Review: If you are eligible to declare the ERC for previous quarters, these companies can examine your past payroll records and financials to recognize possible chances for retroactive credits. They can help you modify previous income tax return to claim these refunds.
Filing Assistance: Business focusing on ERC filings will prepare and send the needed types and documentation in your place. This consists of completing Type 941 or any other necessary tax return.
Compliance and Updates: ERC guidelines and assistance have actually developed over time. These companies remain updated with the latest changes and ensure that your filings comply with the most current standards. If the Internal revenue service requests additional info or carries out an audit associated to your ERC claim, they can likewise supply ongoing assistance.
It is essential to research study and veterinarian any company providing ERC filing help to guarantee their trustworthiness and knowledge. Search for established companies with experience in tax and payroll services, or consider reaching out to trusted accounting companies or tax specialists who provide ERC submitting support.
Bear in mind that while these business can supply important support, it’s always a great concept to have a standard understanding of the ERC requirements and procedure yourself. This will assist you make informed choices and ensure precise filings.
The Employee 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 services to retain and pay their employees throughout the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to eligible companies, including for-profit companies, tax-exempt companies, and certain governmental entities. To qualify, employers need to fulfill one of two criteria:.
Business operations were fully or partly suspended due to a federal government order related to COVID-19.
The business experienced a substantial decrease in gross invoices. As mentioned previously, for 2021, a substantial decline is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decline in gross invoices compared to the same quarter in 2019, or a 20% decline in gross invoices compared to the instantly preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit amount amounts to a portion (up to 70%) of qualified salaries paid to workers, including specific health plan costs. The maximum credit per staff member is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, companies that got an Income Defense Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 enables organizations to claim the ERC even if they got a PPP loan. Nevertheless, the very same earnings can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively broadened and improved, enabling qualified companies to claim the credit for certified wages paid as far back as March 13, 2020. This retroactive arrangement offers a chance for businesses to modify prior-year income tax return and receive refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their work income tax return, typically Form 941. The excess can be refunded to the company if the credit exceeds the amount of work taxes owed.
It is necessary to keep in mind that the ERC provisions and eligibility criteria have developed in time. The very best course of action is to talk to a tax professional or visit the official IRS website for the most comprehensive and updated information concerning the ERC, consisting of any recent legislative modifications or updates.
To receive the ERC, a service needs to meet among the following criteria:.
The business operations were fully or partially suspended due to a federal government order related to COVID-19.
The business experienced a substantial decrease in gross receipts. For 2021, a significant decrease is defined as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decline in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross receipts compared to the right away preceding quarter.
The ERC is readily available to companies of all sizes, including tax-exempt companies, but there are some exceptions. For instance, federal government entities and businesses that received a PPP loan may have limitations on claiming the credit.
The procedure for claiming the ERC includes finishing the essential forms and consisting of the credit on your work tax return (typically Kind 941). The exact time it takes to process the credit can vary based on a number of elements, including the intricacy of your service and the work of the internal revenue service. It’s recommended to speak with a tax expert for assistance particular to your situation.
There are numerous companies that can help with the process of declaring the ERC. These consist of accounting firms, tax advisory services, and payroll company. Some widely known companies that use help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research and contact these companies straight to ask about their costs and services.
Please note that the information supplied here is based on general knowledge and might not show the most current updates or modifications to the ERC. It is very important to seek advice from a tax professional or go to the official internal revenue service website for the most current and precise information concerning eligibility, claiming treatments, and readily available support.
Less than 100. If the employer had 100 or less workers on average in 2019, then the credit is based.
on wages paid to all staff members whether they in fact worked or not. Simply put, even if the.
staff members worked full-time and got paid for full-time work, the company still gets the credit.
Greater than 100. The credit is if the employer had more than 100 workers on average in 2019.
allowed just for salaries paid to workers who did not work during the calendar quarter.
In both cases, “incomes” includes not simply money payments however also a portion of the cost of employer.
offered health care. Infrastructure Investment And Jobs Act Employee Retention Credit
Companies can be right away repaid for the credit by reducing the quantity of payroll taxes they.