Lets talk first about American Rescue Plan And Employee Retention Credit :
Our team here what do these people doing everybody in this space is helping teach individuals about ERC and uh always supply a lovely breakfast and have people actually learn about the program we need to head to the space where we are able to display a few of the checks that we are getting for companies and I want to see that what is this this is uh numerous millions of dollars actually Kevin numerous millions of dollars so these are duplicate copies of the letters that go to clients verifying that the check is on the way I suggest you understand if you simply start to take a look at some of these here I suggest this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s simply I mean think of the number of real customers 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 customer so that’s how you have the ability to track it you understand when you
get this you know the check is gone for sure and that’s when they pay so they don’t pay anything till they actually get the money they don’t pay bottom line Wonder trust anything up until this letter is confirmed the check is on the way they deposit it into their checking account and they can genuinely trust Wonder trust that the procedure has been completed and the number of you believe you have actually processed because you started this we’re about 35 000 of these for
about 6 billion dollars wow so clearly they know what they’re doing and that’s what you require you require professionals 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 Fantastic here you’re at my YouTube channel we’re speaking about something actually crucial today the staff member retention credit which the majority of you have never become aware of I definitely had not become aware of it until really recently and discovered 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 staff members between 5 and five hundred so I’ve got the expert 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 difficult this isn’t like PPP we just call your bank manager and state provide me a loan it doesn’t 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 have actually become yes the Ambassador and paid representative for this I like this program it’s going away very soon you got to discover all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply start there so during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act offered services 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone it makes a huge difference right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
remedy the cash money payroll tax refund alright go on sorry I simply have to make sure we got that point I indicate that’s a big distinction a loan versus cash cash I like money money that’s what we’re speaking 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 lovely difficult check in the mail where you get actual money from the IRS all right so let’s discuss how it works since it sounds like to me if it’s a if it’s employee 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 individuals on the cap table not for investors it’s for workers right you had to have actually owned a service but it’s based on you having W-2 workers in America not 10.99. so 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 6 months of 2021 on the W-2 right so there were 6 quarters the program was open well walk us through the 6 quarters so you had quarters two 3 and four of 2020 and you had quarters one two and three of 2021. alright so that’s how it’s determined you have to be on the W-2 during that duration now let’s talk my preferred part cash how much can you return per worker that was on a W-2 in those 6 quarters so the calculation in 2020 to be exact Kevin is 50 of the employee’s income to an optimum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the employee’s wage to an optimum of seven thousand per quarter how did that occur um they simply altered the rules in.
2021 versus because the mayhem 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 as much as five thousand Max and then what takes place 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 staff member that is since that’s a great deal of cash it is now there’s a caution here the PPP money would need to be decreased from the twenty six 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 somewhere around ten thousand dollars an individual so let’s say hypothetically you owned a restaurant in New York 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 big certainly now the big concern is why does nobody understand about this since appearance when I initially became aware of this when I initially met Josh you know I have actually got great deals of investments in great deals of business I’m a significant advocate for entrepreneurship in America and make numerous many financial investments in entrepreneurs of which many suffered through the pandemic when I initially became aware of this I called BS I don’t think it because I utilize the PPP we went through the money center Banks to get it it was extremely easy to do we had our CEOs call the banks they got their loans and that were well been worthy of and we utilized them sensibly to stay alive during the pandemic so when I became aware of this I stated nah it can’t be true but when I dug around I even called to my politician buddies Governor Senators they didn’t learn about it I imply that’s how you know that’s how false information is that there’s no information out there then a bunch of individuals told me well you can’t get it since you took the PPP also not real so let’s ask Josh why does no one know about the worker retention credit you know what’s fascinating you’re speaking about the banks Kevin since in the PPP loan procedure 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 process that’s all um and here there was mayhem due to the fact that remember in the original cares act you could refrain from doing both programs so if you had actually done PPP you could refrain from doing ERC in the original program and when they altered 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 government never ever made it clear to anyone about how to.
do this does your CFO know how to do this not really he or she’s never ever done it previously do the banks do it nope the banks don’t do it the payroll business yeah some of them are doing it as a payroll business your accounting professional no your accountant’s never ever done this before unless you have an account that went into this company and bottom line my company Kevin has stayed in business considering that 2009 and we’ve been dealing with the federal government and the state government to recover money for Fortune 500 Fortune 1000 companies so a great deal of our huge big business customers have dealt with bottom line to recuperate other government programs we have actually done sales tax and utilize tax unemployment tax work opportunity tax credits research and development tax credits unclaimed property real estate tax all of these other federal government programs.
The staff member retention tax credit is a broad based refundable tax credit developed to encourage.
companies to keep staff members on their payroll. The credit is 50% of up to $10,000 in salaries paid by an.
Because of COVID-19 or whose gross invoices, company whose business is totally or partially suspended.
decrease by more than 50%.
1. The credit is offered to all employers no matter size including tax exempt companies. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) small.
organizations who take Small company Loans.
2. To certify, the company needs to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s service is completely or partially suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the similar quarter in 2019. Once the.
company’s gross receipts exceed 80% of an equivalent quarter in 2019 they no longer qualify.
after the end of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the qualifying earnings paid up to $10,000 in total.
It works for salaries paid after March 13th and before December 31, 2020.
The definition of certifying salaries varies by whether a company had, typically, basically than.
100 workers in 2019.
Business that concentrate on ERC filing support typically supply knowledge and support to help companies navigate the complex process of declaring the credit. They can offer numerous services, consisting of:.
How is the employee retention credit calculated? American Rescue Plan And Employee Retention Credit
Eligibility Assessment: These companies will examine your service’s eligibility for the ERC based on elements such as your market, revenue, and operations. If you satisfy the requirements for the credit and recognize the maximum credit quantity you can claim, they can help figure out.
Paperwork and Computation: ERC filing services will help in collecting the necessary documents, such as payroll records and monetary declarations, to support your claim. They will likewise assist compute the credit amount based on qualified salaries and other qualifying expenses.
Retroactive Claim Review: If you are eligible to declare the ERC for prior quarters, these business can examine your past payroll records and financials to recognize prospective chances for retroactive credits. They can help you amend prior tax returns to declare these refunds.
Filing Help: Business focusing on ERC filings will prepare and send the essential forms and documentation on your behalf. This consists of completing Kind 941 or any other required tax return.
Compliance and Updates: ERC policies and assistance have developed over time. These business stay upgraded with the current modifications and ensure that your filings adhere to the most present standards. If the IRS demands extra info or carries out an audit associated to your ERC claim, they can likewise provide ongoing assistance.
It’s important to research study and vet any company using ERC filing support to guarantee their credibility and knowledge. Search for established firms with experience in tax and payroll services, or consider connecting to trusted accounting firms or tax experts who offer ERC filing support.
Bear in mind that while these business can provide important assistance, it’s constantly a great idea to have a basic understanding of the ERC requirements and procedure yourself. This will help you make informed choices and make sure precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief steps. The goal of the ERC is to motivate companies to maintain and pay their workers during the pandemic, even if their operations have actually been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to eligible companies, consisting of for-profit companies, tax-exempt organizations, and specific governmental entities. To certify, companies must fulfill one of two requirements:.
Business operations were completely or partly suspended due to a government order related to COVID-19.
The business experienced a considerable decrease in gross receipts. As discussed earlier, for 2021, a significant decline 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 defined as a 20% decrease in gross receipts compared to the very 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 percentage (as much as 70%) of certified earnings paid to staff members, including certain health insurance 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: Initially, businesses that got an Income Security Program (PPP) loan were not eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 allows businesses to declare the ERC even if they received a PPP loan. Nevertheless, the very same incomes can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and improved, allowing qualified employers to declare the credit for certified earnings paid as far back as March 13, 2020. This retroactive arrangement provides a chance for companies to change prior-year tax returns and get refunds.
Declaring the Credit: Employers can declare the ERC by reporting it on their employment income tax return, generally Form 941. The excess can be reimbursed to the employer if the credit goes beyond the quantity of work taxes owed.
It is necessary to keep in mind that the ERC arrangements and eligibility criteria have actually developed over time. The best strategy is to seek advice from a tax professional or go to the main internal revenue service site for the most up-to-date and in-depth details regarding the ERC, consisting of any current legal changes or updates.
To receive the ERC, a company should meet one of the following criteria:.
The business operations were totally or partly suspended due to a government order related to COVID-19.
Business experienced a substantial decline in gross receipts. For 2021, a considerable decline is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decrease 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 offered to companies of all sizes, including tax-exempt companies, however there are some exceptions. Government entities and businesses that got a PPP loan might have limitations on claiming the credit.
The procedure for declaring the ERC involves finishing the required forms and consisting of the credit on your employment tax return (generally Type 941). The exact time it requires to process the credit can vary based on several elements, consisting of the complexity of your organization and the workload of the IRS. It’s suggested to talk to a tax expert for assistance specific to your scenario.
There are several companies that can aid with the process of claiming the ERC. These consist of accounting firms, tax advisory services, and payroll company. Some popular business that use assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research and get in touch with these business straight to ask about their charges and services.
Please note that the details supplied here is based on basic knowledge and might not show the most current updates or modifications to the ERC. It is essential to consult with a tax expert or go to the official internal revenue service website for the most current and accurate details concerning eligibility, declaring treatments, and offered help.
Less than 100. The credit is based if the company had 100 or fewer staff members on average in 2019.
on incomes paid to all employees whether they in fact worked or not. Simply put, even if the.
workers worked full time and made money for full-time work, the employer still gets the credit.
Greater than 100. The credit is if the company had more than 100 employees on average in 2019.
enabled only for incomes paid to staff members who did not work throughout the calendar quarter.
In both cases, “salaries” consists of not just money payments however also a portion of the cost of company.
supplied healthcare. American Rescue Plan And Employee Retention Credit
Companies can be right away repaid for the credit by lowering the amount of payroll taxes they.