Lets talk first about Tax Treatment Of Employee Retention Credit :
Our team here what do these men doing everyone in this space is assisting teach individuals about ERC and uh always supply a beautiful breakfast and have people actually find out about the program we should head to the room where we have the ability to display a few of the checks that we are getting for companies and I ‘d like to see that what is this this is uh numerous millions of dollars literally Kevin numerous countless dollars so these are replicate copies of the letters that go to clients validating that the check is on the method I suggest you know if you just start to take a look at some of these here I mean this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I imply it’s just I indicate 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 confirmed 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 understand when you
get this you know the check is opted for sure which’s when they pay so they don’t pay anything till they really get the cash they do not pay bottom line Wonder trust anything until this letter is verified the check is on the way they deposit it into their bank account and they can genuinely trust Wonder trust that the process has been ended up and how many you believe you have actually processed because you started this we have to do with 35 000 of these for
about 6 billion dollars wow so plainly they understand what they’re doing and that’s what you require you need experts 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 truly crucial today the employee retention credit which most of you have never heard of I certainly hadn’t become aware of it till really just recently and found out a lot about it due to the fact that this is most likely the lowest cost of capital for any small business anywhere
anytime if you have workers in between 5 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 difficult this isn’t like PPP we just phone your bank supervisor and state 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 have actually ended up being yes the Ambassador and paid representative for this I love this program it’s disappearing very soon you got to discover everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just start there so throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act offered organizations three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everybody 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.
fix the cash cash payroll tax refund okay go on sorry I simply need to make sure we got that point I imply that’s a huge distinction a loan versus cash money I like cash cash that’s what we’re talking about 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 original cares Act is the ERC and yes Kevin it is a beautiful difficult check in the mail where you get actual cash from the IRS all right so let’s talk about how it works since it seems like to me if it’s a if it’s worker retention credit that individual needed to be an employee so I’m going to make the Presumption this cash is not for the owner not for people on the cap table not for shareholders it’s for employees right you needed to have owned a company but it’s based upon you having W-2 employees in America not 10.99. As long as you had W-2 employees 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 very first 6 months of 2021 on the W-2 proper so there were 6 quarters the program was open well stroll us through the six quarters so you had quarters 2 three and 4 of 2020 and you had quarters one 2 and 3 of 2021. fine so that’s how it’s determined you need to be on the W-2 throughout that period now let’s talk my preferred part money how much can you get back per staff member that was on a W-2 in those 6 quarters so the computation in 2020 to be specific Kevin is 50 of the worker’s salary to a maximum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the worker’s income to a maximum of 7 thousand per quarter how did that take place um they simply altered the rules in.
2021 versus due to the fact that the mayhem 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 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 staff member that is because that’s a great deal of money it is now there’s a caveat here the PPP money would have to be decreased from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would reduce the 26 000 so what we’re seeing typically Kevin is if you took PPP cash someplace around ten thousand dollars a person so let’s state hypothetically you owned a dining establishment in New york city City where I’m from and you had a hundred staff members and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s substantial clearly now the huge question is why does nobody learn about this since appearance when I initially became aware of this when I first satisfied Josh you understand I’ve got lots of investments in great deals of companies I’m a significant supporter for entrepreneurship in America and make numerous lots of investments in business owners of which many suffered through the pandemic when I initially became aware of this I called BS I don’t think 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 and that were well should have and we utilized them wisely to stay alive throughout the pandemic so when I heard about this I said nah it can’t be true however when I dug around I even contacted us to my politician friends Governor Senators they didn’t learn about it I mean that’s how you understand that’s how misinformation is that there’s no information out there then a lot of individuals informed me well you can’t get it because you took the PPP also not real so let’s ask Josh why does nobody understand about the worker retention credit you know what’s fascinating you’re discussing the banks Kevin due to the fact that in the PPP loan process the federal government made it extremely clear that if you wanted 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 simply process procedure that’s all um and here there was turmoil because remember in the original cares act you might refrain from doing both programs so if you had done PPP you might refrain from doing ERC in the initial program and when they changed the law in 2021 the banks were refraining from doing ERC because it’s not alone so you’re getting a tax refund so the federal government never made it clear to anyone about how to.
do this does your CFO know how to do this not truly she or he’s never ever done it previously 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 company your accounting professional no your accounting professional’s never ever done this before unless you have an account that went into this business and bottom line my firm Kevin has been in business because 2009 and we’ve been dealing with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 business so a great deal of our huge huge corporate clients have dealt with bottom line to recuperate other government programs we have actually done sales tax and utilize tax joblessness tax work opportunity tax credits research and development tax credits unclaimed home property tax all of these other federal government programs.
The worker retention tax credit is a broad based refundable tax credit developed to motivate.
employers to keep workers on their payroll. The credit is 50% of approximately $10,000 in wages paid by an.
employer whose company is completely or partly suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is available to all employers despite size consisting of tax exempt companies. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
organizations who take Small company Loans.
2. To certify, the company needs to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s business is fully or partly suspended by government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross receipts are below 50% of the comparable quarter in 2019. As soon as the.
employer’s gross receipts go above 80% of a similar quarter in 2019 they no longer qualify.
after completion of that quarter.
Computation of the Credit.
The quantity of the credit is 50% of the qualifying wages paid up to $10,000 in total.
It works for wages paid after March 13th and prior to December 31, 2020.
The definition of qualifying wages varies by whether a company had, on average, more or less than.
100 employees in 2019.
Companies that specialize in ERC filing support usually supply competence and support to help services browse the complicated process of claiming the credit. They can use different services, consisting of:.
How is the employee retention credit calculated? Tax Treatment Of Employee Retention Credit
Eligibility Assessment: These companies will examine your business’s eligibility for the ERC based upon factors such as your industry, income, and operations. They can assist figure out if you satisfy the requirements for the credit and determine the optimum credit amount you can claim.
Documentation and Estimation: ERC filing services will help in gathering the required documentation, such as payroll records and financial declarations, to support your claim. They will also assist compute the credit amount based on qualified salaries and other qualifying expenses.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for prior quarters, these business can examine your previous payroll records and financials to identify potential opportunities for retroactive credits. They can assist you amend previous income tax return to claim these refunds.
Filing Assistance: Business concentrating on ERC filings will prepare and send the necessary forms and documentation in your place. This includes finishing Kind 941 or any other necessary tax return.
Compliance and Updates: ERC regulations and guidance have developed gradually. These companies stay updated with the latest modifications and make sure that your filings abide by the most existing guidelines. If the Internal revenue service demands extra details or conducts an audit associated to your ERC claim, they can also supply continuous support.
It is necessary to research study and vet any business using ERC filing help to ensure their credibility and knowledge. Search for established firms with experience in tax and payroll services, or consider connecting to trusted accounting firms or tax specialists who offer ERC submitting support.
Bear in mind that while these business can offer valuable help, it’s always an excellent concept to have a fundamental understanding of the ERC requirements and process yourself. This will assist you make notified decisions and guarantee accurate filings.
The Staff Member 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 motivate businesses to retain and pay their workers throughout the pandemic, even if their operations have been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to eligible companies, consisting of for-profit companies, tax-exempt organizations, and certain governmental entities. To qualify, employers must meet one of two criteria:.
Business operations were completely or partially suspended due to a federal government order related to COVID-19.
The business experienced a significant decrease in gross invoices. As pointed out 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 substantial decrease is defined 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 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 percentage (up to 70%) of qualified salaries paid to workers, including specific health plan costs. The maximum credit per worker 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. Legislation passed in late 2020 and extended in 2021 permits companies to declare the ERC even if they received a PPP loan. Nevertheless, the same salaries can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively broadened and boosted, enabling eligible employers to declare the credit for qualified salaries paid as far back as March 13, 2020. This retroactive provision provides a chance for businesses to amend prior-year tax returns and receive refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their work tax returns, usually Form 941. The excess can be refunded to the employer if the credit exceeds the quantity of employment taxes owed.
It is necessary to note that the ERC provisions and eligibility requirements have progressed over time. The best strategy is to speak with a tax expert or visit the official internal revenue service website for the most detailed and up-to-date information relating to the ERC, consisting of any recent legislative modifications or updates.
To get approved for the ERC, an organization should 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 decline in gross invoices. For 2021, a substantial decrease is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decline in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
The ERC is offered to organizations of all sizes, consisting of tax-exempt organizations, but there are some exceptions. For instance, federal government entities and businesses that received a PPP loan may have constraints on claiming the credit.
The procedure for claiming the ERC involves completing the required forms and consisting of the credit on your employment tax return (usually Type 941). The exact time it takes to process the credit can vary based on several elements, including the intricacy of your service and the workload of the IRS. It’s advised to talk to a tax expert for assistance specific to your circumstance.
There are several business that can help with the process of claiming the ERC. These include accounting firms, tax advisory services, and payroll service providers. Some popular business that provide support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research study and contact these business straight to inquire about their services and costs.
Please keep in mind that the info offered here is based on general understanding and may not reflect the most recent updates or changes to the ERC. It is very important to speak with a tax professional or check out the main internal revenue service site for the most up-to-date and precise information regarding eligibility, declaring procedures, and readily available help.
Less than 100. The credit is based if the company had 100 or fewer workers on average in 2019.
on earnings paid to all staff members 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 employer still gets the credit.
Greater than 100. The credit is if the company had more than 100 staff members on average in 2019.
allowed just for wages paid to staff members who did not work throughout the calendar quarter.
In both cases, “earnings” consists of not just money payments but also a portion of the cost of employer.
supplied health care. Tax Treatment Of Employee Retention Credit
Employers can be instantly repaid for the credit by reducing the quantity of payroll taxes they.