Lets talk first about Tax Act Employee Retention Credit :
Our team here what do these men doing everybody in this space is assisting teach people about ERC and uh constantly provide a stunning breakfast and have people actually learn more about the program we ought to head to the room where we are able to display a few of the checks that we are getting for business and I want to see that what is this this is uh hundreds of millions of dollars literally Kevin hundreds of millions of dollars so these are duplicate copies of the letters that go to clients validating that the check is on the method I imply you know if you just start to 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 mean it’s simply I mean think of how many real clients that went through the program yeah this is the very end this is the celebration 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 customer so that’s how you’re able to track it you know when you
get this you understand the check is chosen sure and that’s when they pay so they do not pay anything up until they really receive the money they don’t 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 really trust Wonder trust that the procedure has actually been completed and how many you think you have actually 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 and that’s what you require you need specialists 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 Wonderful here you’re at my YouTube channel we’re speaking about something really important today the employee retention credit which the majority of you have actually never ever heard of I certainly had not become aware of it up until really recently and found out 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 staff members between 5 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 simply call up your bank supervisor and state provide me a loan it does not 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’ve ended up being yes the Ambassador and paid spokesperson for this I love this program it’s disappearing very soon you got to learn 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 three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everyone 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 cash money payroll tax refund okay go on sorry I just need to ensure we got that point I mean that’s a big distinction a loan versus money money I like cash cash that’s what we’re talking about alright 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 tough check in the mail where you get real cash from the IRS all right so let’s speak about how it works because it sounds 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 Presumption this money is not for the owner not for individuals on the cap table not for shareholders it’s for workers right you had to have owned an organization but it’s based on you having W-2 staff members in America not 10.99. so as long as you had W-2 employees and you paid federal payroll taxes that’s why you would be eligible so you need to be on payroll in 2020 on the W-2 and you need to be on payroll for the first 6 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 two 3 and four of 2020 and you had quarters one 2 and three of 2021. okay so that’s how it’s determined you need to be on the W-2 during that duration now let’s talk my preferred part money 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 an optimum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the worker’s wage to an optimum of 7 thousand per quarter how did that take place um they just changed the rules in.
2021 versus since the chaos 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 approximately five thousand Max and then what occurs 21 000 Max in 2021 oh that’s how you come up with 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 great deal of money it is now there’s a caution here the PPP cash would need to be minimized from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would reduce 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 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 cash you would still get a million dollar in the mail from the internal revenue service so it’s substantial undoubtedly now the huge concern is why does nobody understand about this since look when I initially heard about this when I initially met Josh you know I have actually got great deals of investments in great deals of companies I’m a significant supporter 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 do not believe it since I utilize 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 been worthy of and we used them wisely to stay alive throughout the pandemic so when I became aware of this I said nah it can’t hold true however when I dug around I even contacted us to my politician good friends Governor Senators they didn’t know about it I imply that’s how you understand that’s how false information is that there’s no details out there then a bunch 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 know about the worker retention credit you understand what’s interesting you’re speaking about the banks Kevin due to the fact that in the PPP loan process 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 nation and they would process process in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply procedure process that’s all um and here there was turmoil due to the fact that keep in mind 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 refraining from doing ERC due to the fact that it’s not alone so you’re getting a tax refund so the government never ever made it clear to anybody about how to.
do this does your CFO understand how to do this not actually she or he’s never ever done it previously 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 before unless you have an account that entered into this company and bottom line my company Kevin has actually been in business because 2009 and we have actually been dealing with the federal government and the state federal government to recuperate cash for Fortune 500 Fortune 1000 business so a great deal of our huge big business customers have dealt with bottom line to recuperate other government programs we’ve done sales tax and use 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 encourage.
companies to keep employees on their payroll. The credit is 50% of as much as $10,000 in wages paid by an.
employer whose company is totally or partially suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is offered to all employers no matter size including tax exempt organizations. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) small.
businesses who take Small company Loans.
2. To certify, the employer has to satisfy one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s business is completely or partially suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross invoices are below 50% of the equivalent quarter in 2019. As soon as the.
company’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 salaries paid up to $10,000 in overall.
It is effective for incomes paid after March 13th and prior to December 31, 2020.
The definition of qualifying earnings differs by whether a company had, on average, basically than.
100 staff members in 2019.
Business that focus on ERC filing help usually provide proficiency and support to help companies browse the complex procedure of claiming the credit. They can use various services, consisting of:.
How is the employee retention credit calculated? Tax Act Employee Retention Credit
Eligibility Assessment: These companies will examine your business’s eligibility for the ERC based on aspects such as your industry, profits, and operations. They can assist identify if you meet the requirements for the credit and recognize the maximum credit quantity you can claim.
Paperwork and Computation: ERC filing services will assist in collecting the required documentation, such as payroll records and monetary declarations, to support your claim. They will likewise assist compute the credit quantity based on eligible earnings and other qualifying costs.
Retroactive Claim Review: If you are qualified to declare the ERC for prior quarters, these companies can examine your previous payroll records and financials to recognize prospective chances for retroactive credits. They can assist you amend previous tax returns to declare these refunds.
Filing Support: Business specializing in ERC filings will prepare and send the essential types and paperwork in your place. This consists of completing Kind 941 or any other required tax forms.
Compliance and Updates: ERC policies and guidance have actually evolved over time. These companies remain updated with the current modifications and guarantee that your filings abide by the most existing guidelines. If the Internal revenue service requests extra information or performs an audit related to your ERC claim, they can also supply ongoing assistance.
It is necessary to research and vet any business providing ERC filing support to ensure their reliability and know-how. Search for recognized companies with experience in tax and payroll services, or consider connecting to trusted accounting companies or tax specialists who offer ERC filing assistance.
Remember that while these companies can offer valuable help, it’s always a great concept to have a fundamental understanding of the ERC requirements and process yourself. This will help you make notified decisions and guarantee precise filings.
The Worker Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief steps. The goal of the ERC is to encourage businesses to retain and pay their workers throughout the pandemic, even if their operations have actually been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to eligible companies, including for-profit services, tax-exempt organizations, and specific governmental entities. To certify, companies must fulfill one of two criteria:.
Business operations were totally or partly suspended due to a government order related to COVID-19.
The business experienced a significant decrease in gross invoices. As pointed out previously, for 2021, a substantial decrease is specified 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% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decline in gross receipts 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 is equal to a percentage (approximately 70%) of certified wages paid to employees, including certain health insurance costs. The maximum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, organizations 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 received a PPP loan. Nevertheless, the exact same earnings can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively expanded and improved, allowing eligible companies to declare the credit for certified salaries paid as far back as March 13, 2020. This retroactive provision offers an opportunity for companies to modify prior-year income tax return and get refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their employment income tax return, usually Type 941. The excess can be reimbursed to the company if the credit surpasses the amount of employment taxes owed.
It is very important to keep in mind that the ERC arrangements and eligibility requirements have developed over time. The best strategy is to talk to a tax professional or visit the main internal revenue service website for the most updated and detailed details concerning the ERC, including any recent legal changes or updates.
To qualify for the ERC, a company should satisfy among the following criteria:.
The business operations were totally or partly suspended due to a federal government order related to COVID-19.
The business experienced a substantial decrease in gross invoices. For 2021, a considerable decline is defined as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decline in gross invoices compared to the very same quarter in 2019, or a 20% decrease in gross invoices compared to the immediately preceding quarter.
The ERC is offered to services of all sizes, consisting of tax-exempt companies, but there are some exceptions. For instance, government entities and businesses that got a PPP loan may have restrictions on declaring the credit.
The process for claiming the ERC involves completing the essential forms and including the credit on your employment tax return (usually Kind 941). The exact time it takes to process the credit can vary based on a number of elements, consisting of the complexity of your business and the workload of the IRS. It’s suggested to consult with a tax expert for guidance specific to your circumstance.
There are several 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 use help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research and contact these companies directly to inquire about their fees and services.
Please keep in mind that the info supplied here is based upon general understanding and might not show the most current updates or modifications to the ERC. It’s important to consult with a tax expert or visit the main IRS site for the most updated and precise details concerning eligibility, declaring procedures, and offered assistance.
Less than 100. If the employer had 100 or fewer employees typically in 2019, then the credit is based.
on earnings paid to all workers whether they really worked or not. To put it simply, even if the.
staff members worked full-time and got paid for full time work, the company still gets the credit.
Greater than 100. If the employer had more than 100 staff members on average in 2019, then the credit is.
allowed only for incomes paid to workers who did not work throughout the calendar quarter.
In both cases, “wages” consists of not simply money payments but also a portion of the cost of employer.
supplied health care. Tax Act Employee Retention Credit
Employers can be right away compensated for the credit by lowering the quantity of payroll taxes they.