Lets talk first about Partial Suspension Employee Retention Credit :
Our team here what do these people doing everyone in this room is assisting teach individuals about ERC and uh constantly provide a lovely breakfast and have individuals actually learn about the program we must head to the room where we are able to show a few of the checks that we are getting for business and I wish to see that what is this this is uh hundreds of countless dollars actually Kevin hundreds of countless dollars so these are duplicate copies of the letters that go to clients verifying that the check is on the way I suggest you know if you simply start to look at a few 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 mean think of the number of actual clients 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 verified and the check is on the mail in the mail from the IRS heading to the consumer so that’s how you have the ability to track it you know when you
get this you know the check is opted for sure which’s when they pay so they don’t pay anything up until they in fact get the money they don’t pay bottom line Wonder trust anything until this letter is validated the check is on the way they transfer it into their checking account and they can genuinely trust Wonder trust that the process has been finished and how many you believe you have actually processed since you started this we’re about 35 000 of these for
about six billion dollars wow so plainly they know what they’re doing which’s what you require 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 talking about something truly crucial today the employee retention credit which most of you have actually never heard of I definitely hadn’t become aware of it until extremely recently and discovered a lot about it since this is most likely the most affordable cost of capital for any small company anywhere
anytime if you have workers in between five and five hundred so I’ve 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 just phone your bank supervisor and say give me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to inform 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 disappearing very soon you got to learn all 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 provided businesses 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everyone 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 money cash payroll tax refund fine go on sorry I simply need to make certain we got that point I mean that’s a huge distinction a loan versus money money I like money cash 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 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 internal revenue service all right so let’s speak about how it works because it sounds like to me if it’s a if it’s staff member retention credit that person needed to be a worker so I’m going to make the Assumption this cash is not for the owner not for individuals on the cap table not for shareholders it’s for staff members right you needed to have actually owned a company however it’s based upon you having W-2 workers in America not 10.99. As long as you had W-2 staff members 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 stroll us through the 6 quarters so you had quarters 2 three and 4 of 2020 and you had quarters one 2 and three of 2021. alright so that’s how it’s measured you need to be on the W-2 during that duration now let’s talk my preferred part cash how much can you return per staff member that was on a W-2 in those six quarters so the calculation in 2020 to be specific Kevin is 50 of the staff member’s wage to a maximum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers increased to 70 of the staff member’s salary to a maximum of seven thousand per quarter how did that take place um they just changed the rules in.
2021 versus due to the fact that the turmoil 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 up to 5 thousand Max and then what takes place 21 000 Max in 2021 oh that’s how you create 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 lot of money it is now there’s a caveat here the PPP money would need to be minimized from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would decrease the 26 000 so what we’re seeing usually Kevin is if you took PPP cash somewhere around ten thousand dollars an individual so let’s say hypothetically you owned a restaurant in New york city City where I’m from and you had a hundred workers 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 huge concern is why does no one know about this because look when I first heard about this when I first met Josh you know I have actually got great deals of financial 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 lots of suffered through the pandemic when I initially became aware of this I called BS I do not think it due to the fact that 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 which were well been worthy of and we used them sensibly to stay alive during the pandemic so when I heard about this I said nah it can’t hold true but when I dug around I even called to my politician pals Governor Senators they didn’t know about it I indicate that’s how you know that’s how false information is that there’s no details out there then a lot of individuals informed me well you can’t get it because you took the PPP likewise not true so let’s ask Josh why does no one understand about the worker retention credit you know what’s fascinating you’re speaking about the banks Kevin because in the PPP loan process the federal government made it very 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 process in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply procedure procedure that’s all um and here there was mayhem due to the fact that keep in mind in the original cares act you could not do 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 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 a few of them are doing it as a payroll company 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 been in business given that 2009 and we’ve been dealing with the federal government and the state government to recover money for Fortune 500 Fortune 1000 business so a lot of our big huge business customers have worked with bottom line to recover other federal government programs we have actually done sales tax and use tax unemployment tax work opportunity tax credits research and development tax credits unclaimed property property tax all of these other government programs.
The worker retention tax credit is a broad based refundable tax credit designed to motivate.
employers to keep employees on their payroll. The credit is 50% of as much as $10,000 in incomes paid by an.
Since of COVID-19 or whose gross invoices, company whose business is completely or partly suspended.
decrease by more than 50%.
1. The credit is available to all employers regardless of size including tax exempt companies. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) little.
services who take Small Business Loans.
2. To qualify, the employer needs to fulfill one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s business is fully or partly suspended by government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross invoices are listed below 50% of the similar quarter in 2019. Once the.
company’s gross receipts exceed 80% of a similar quarter in 2019 they no longer qualify.
after completion of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the certifying salaries paid up to $10,000 in total.
It works for earnings paid after March 13th and prior to December 31, 2020.
The meaning of certifying incomes varies by whether a company had, usually, more or less than.
100 employees in 2019.
Companies that concentrate on ERC filing support usually provide knowledge and assistance to assist businesses browse the complex procedure of declaring the credit. They can offer different services, including:.
How is the employee retention credit calculated? Partial Suspension Employee Retention Credit
Eligibility Evaluation: These business will examine your company’s eligibility for the ERC based upon aspects such as your industry, income, and operations. If you meet the requirements for the credit and identify the optimum credit amount you can claim, they can help figure out.
Documentation and Calculation: ERC filing services will assist in gathering the required documentation, such as payroll records and monetary declarations, to support your claim. They will also assist determine the credit quantity based upon eligible wages and other certifying expenses.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for prior quarters, these business can examine your previous payroll records and financials to recognize potential chances for retroactive credits. They can help you amend previous income tax return to claim these refunds.
Filing Support: Companies specializing in ERC filings will prepare and send the essential forms and documentation on your behalf. This consists of finishing Kind 941 or any other required tax forms.
Compliance and Updates: ERC policies and assistance have developed gradually. These business stay upgraded with the current changes and guarantee that your filings adhere to the most existing guidelines. If the IRS requests extra info or performs an audit associated to your ERC claim, they can also offer ongoing support.
It is necessary to research and vet any company using ERC filing support to ensure their credibility and knowledge. Try to find established firms with experience in tax and payroll services, or consider connecting to relied on accounting companies or tax specialists who use ERC submitting assistance.
Keep in mind that while these companies can provide important support, it’s always an excellent concept to have a basic understanding of the ERC requirements and procedure yourself. This will assist you make notified choices and make sure accurate filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief measures. The objective of the ERC is to motivate services to retain 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 offered to qualified employers, consisting of for-profit companies, tax-exempt companies, and particular governmental entities. To certify, companies must fulfill one of two criteria:.
Business operations were completely or partially suspended due to a government order related to COVID-19.
The business experienced a substantial decrease in gross invoices. As mentioned earlier, 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 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 receipts compared to the immediately preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity is equal to a percentage (as much as 70%) of certified salaries paid to employees, consisting of specific health insurance costs. The optimum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, businesses that got a Paycheck Defense Program (PPP) loan were not eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 enables businesses to declare the ERC even if they got a PPP loan. However, the very same wages can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and boosted, allowing qualified employers to declare the credit for qualified incomes paid as far back as March 13, 2020. This retroactive provision offers a chance for businesses to amend prior-year tax returns and get refunds.
Claiming the Credit: Companies can declare the ERC by reporting it on their employment tax returns, generally Form 941. If the credit goes beyond the amount of employment taxes owed, the excess can be reimbursed to the employer.
It’s important to note that the ERC provisions and eligibility requirements have developed in time. The very best course of action is to consult with a tax professional or go to the main IRS website for the most up-to-date and in-depth information regarding the ERC, including any recent legislative modifications or updates.
To receive the ERC, an organization must fulfill one of the following criteria:.
The business operations were totally or partially suspended due to a federal government order related to COVID-19.
Business experienced a substantial decrease in gross receipts. For 2021, a significant decline is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the immediately 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 organizations that got a PPP loan might have constraints on claiming the credit.
The procedure for declaring the ERC includes completing the necessary types and including the credit on your employment tax return (normally Type 941). The exact time it takes to process the credit can vary based upon a number of factors, consisting of the intricacy of your organization and the workload of the IRS. It’s advised to seek advice from a tax expert for assistance particular to your circumstance.
There are a number of companies that can assist with the procedure of declaring the ERC. These include accounting companies, tax advisory services, and payroll provider. Some well-known business that use support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research study and call these business straight to ask about their charges and services.
Please keep in mind that the details supplied here is based on basic understanding and might not reflect the most recent updates or modifications to the ERC. It is very important to speak with a tax expert or check out the main IRS website for the most current and precise information regarding eligibility, declaring treatments, and available assistance.
Less than 100. The credit is based if the company had 100 or less employees on average in 2019.
on wages paid to all workers whether they actually worked or not. Simply put, even if the.
staff members worked full time and made money for full time work, the company still gets the credit.
Greater than 100. If the company had more than 100 employees usually in 2019, then the credit is.
enabled only for incomes paid to employees who did not work throughout the calendar quarter.
In both cases, “incomes” consists of not simply money payments but likewise a portion of the cost of company.
provided health care. Partial Suspension Employee Retention Credit
Companies can be right away compensated for the credit by lowering the amount of payroll taxes they.