Lets talk first about Calculating Employee Retention Credit With Ppp :
Our team here what do these people doing everyone in this space is helping teach people about ERC and uh always offer a beautiful breakfast and have individuals truly learn more about the program we must head to the space where we have the ability 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 hundreds of millions of dollars literally Kevin hundreds of countless dollars so these are duplicate copies of the letters that go to customers validating that the check is on the method I suggest you know if you simply start to take a look at a few of these here I suggest this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I imply it’s just I imply think about the number of actual clients that went through the program yeah this is the very end this is the party at the end when the check is validated the numbers are confirmed and the check is on the mail in the mail from the IRS heading to the client so that’s how you have the ability to track it you understand when you
get this you understand the check is gone for sure which’s when they pay so they don’t pay anything until they actually get the cash they don’t pay bottom line Wonder trust anything till this letter is confirmed the check is on the way they deposit it into their checking account and they can genuinely rely on Wonder trust that the procedure has actually been completed and how many you think you’ve processed considering that you began this we’re about 35 000 of these for
about 6 billion dollars wow so plainly they understand what they’re doing and that’s what you need 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 discussing something actually crucial today the employee retention credit which the majority of you have actually never ever heard of I certainly had not heard of it till really just recently and learned a lot about it since this is probably the lowest cost of capital for any small company anywhere
anytime if you have workers between five and five hundred so I’ve got the expert 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 simply call up 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 inform us all about it and how to get it and why I’ve become yes the Ambassador and paid representative for this I like this program it’s going away very soon you got to learn everything about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply begin there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act provided companies three 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 distinction right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the cash money payroll tax refund okay go on sorry I just have to make sure we got that point I suggest that’s a big difference a loan versus money cash I like cash money that’s what we’re discussing okay 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 hard check in the mail where you get real cash from the IRS all right so let’s speak about how it works due to the fact that it sounds like to me if it’s a if it’s staff member retention credit that person had 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 investors 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. 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 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 walk us through the six quarters so you had quarters two 3 and four of 2020 and you had quarters one 2 and 3 of 2021. alright so that’s how it’s measured you have to be on the W-2 throughout that period now let’s talk my favorite 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 staff member’s wage to a maximum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s salary to an optimum of 7 thousand per quarter how did that happen um they simply altered the rules in.
2021 versus because the mayhem 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 after that what happens 21 000 Max in 2021 oh that’s how you come up with twenty six thousand twenty one thousand to twenty twenty one plus five 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 caveat here the PPP money would need to be minimized from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would lower the 26 000 so what we’re seeing on average Kevin is if you took PPP money somewhere around 10 thousand dollars an individual so let’s state hypothetically you owned a restaurant in New York City where I’m from and you had a hundred employees and you took PPP cash you would still get a million dollar in the mail from the IRS so it’s big undoubtedly now the huge question is why does no one know about this since appearance when I first found out about this when I first met Josh you understand I’ve got lots of investments in great deals of business I’m a major supporter for entrepreneurship in America and make many lots of investments in business owners of which numerous suffered through the pandemic when I first found out about this I called BS I don’t 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 utilized them sensibly to stay alive throughout the pandemic so when I heard about this I stated nah it can’t be true but when I dug around I even called to my politician friends Governor Senators they didn’t understand about it I imply that’s how you know that’s how false information is that there’s no info out there then a lot of people told me well you can’t get it due to the fact that you took the PPP likewise not real so let’s ask Josh why does no one learn about the employee retention credit you understand what’s intriguing you’re talking about the banks Kevin because 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 huge 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 process process that’s all um and here there was chaos due to the fact that remember in the original cares act you might refrain from doing both programs so if you had actually done PPP you might not do ERC in the original 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 anyone about how to.
do this does your CFO understand how to do this not truly she or he’s never done it in the past 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 entered into this company and bottom line my company Kevin has actually been in business considering that 2009 and we’ve been working with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 business so a lot of our big big business customers have dealt with bottom line to recuperate other federal government programs we’ve done sales tax and use tax joblessness tax work chance tax credits research and development tax credits unclaimed home real estate tax all of these other government programs.
The staff member retention tax credit is a broad based refundable tax credit designed to motivate.
companies to keep staff members on their payroll. The credit is 50% of approximately $10,000 in earnings paid by an.
employer whose company is fully or partly suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
Availability.
1. The credit is available to all employers despite size consisting of tax exempt organizations. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) little.
companies who take Small company Loans.
2. To qualify, the company has to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s company is totally or partially suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are below 50% of the equivalent quarter in 2019. When the.
employer’s gross invoices exceed 80% of an equivalent quarter in 2019 they no longer certify.
after the end of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the qualifying wages paid up to $10,000 in total.
It works for earnings paid after March 13th and before December 31, 2020.
The definition of qualifying wages varies by whether a company had, on average, more or less than.
100 employees in 2019.
Business that focus on ERC filing assistance normally supply know-how and support to assist services navigate the intricate procedure of claiming the credit. They can provide various services, consisting of:.
How is the employee retention credit calculated? Calculating Employee Retention Credit With Ppp
Eligibility Assessment: These companies will examine your organization’s eligibility for the ERC based on aspects such as your industry, income, and operations. If you meet the requirements for the credit and recognize the maximum credit amount you can declare, they can help identify.
Paperwork and Calculation: ERC filing services will assist in gathering the needed paperwork, such as payroll records and financial declarations, to support your claim. They will likewise help compute the credit quantity based upon eligible wages and other qualifying expenditures.
Retroactive Claim Review: If you are eligible to claim the ERC for previous quarters, these companies can review your previous payroll records and financials to determine prospective opportunities for retroactive credits. They can help you modify prior tax returns to declare these refunds.
Filing Support: Companies specializing in ERC filings will prepare and submit the essential forms and documentation on your behalf. This includes completing Form 941 or any other required tax return.
Compliance and Updates: ERC guidelines and guidance have actually evolved gradually. These companies stay updated with the most recent modifications and guarantee that your filings comply with the most existing guidelines. If the Internal revenue service demands extra information or performs an audit associated to your ERC claim, they can also supply ongoing support.
It is very important to research study and vet any business offering ERC filing support to ensure their credibility and proficiency. Search for established companies with experience in tax and payroll services, or think about connecting to relied on accounting companies or tax experts who use ERC submitting assistance.
Bear in mind that while these business can provide important assistance, it’s always a great concept to have a fundamental understanding of the ERC requirements and procedure yourself. This will assist you make informed choices and guarantee precise filings.
The Worker Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief steps. The goal of the ERC is to motivate organizations to retain and pay their staff members 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 eligible companies, including for-profit companies, tax-exempt companies, and specific governmental entities. To certify, employers must fulfill one of two criteria:.
Business operations were fully or partly suspended due to a government order related to COVID-19.
The business experienced a substantial decline in gross receipts. As discussed earlier, for 2021, a substantial decline is specified as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a substantial 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 right away preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount amounts to a percentage (up to 70%) of certified salaries paid to workers, consisting of certain health insurance expenses. 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, services that received an Income Security Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 enables companies to declare the ERC even if they got a PPP loan. Nevertheless, the same incomes can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively expanded and enhanced, enabling qualified employers to claim the credit for qualified wages paid as far back as March 13, 2020. This retroactive arrangement offers a chance for organizations to modify prior-year tax returns and receive refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their work income tax return, typically Kind 941. If the credit surpasses the amount of employment taxes owed, the excess can be reimbursed to the employer.
It’s important to note that the ERC arrangements and eligibility requirements have actually developed gradually. The very best strategy is to seek advice from a tax expert or visit the official IRS website for the most current and detailed information regarding the ERC, consisting of any recent legal modifications or updates.
To qualify for the ERC, an organization needs to meet one of the following criteria:.
The business operations were completely or partly suspended due to a government order related to COVID-19.
Business experienced a substantial decrease in gross invoices. For 2021, a substantial decline is specified as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decrease in gross receipts compared to the immediately preceding quarter.
The ERC is available to services of all sizes, consisting of tax-exempt companies, however there are some exceptions. Federal government entities and services that received a PPP loan may have restrictions on declaring the credit.
The process for claiming the ERC includes finishing the required types and including the credit on your employment tax return (generally Kind 941). The exact time it requires to process the credit can vary based on a number of elements, consisting of the complexity of your company and the workload of the IRS. It’s advised to seek advice from a tax professional for guidance particular to your scenario.
There are several companies that can help with the procedure of claiming the ERC. These include accounting companies, tax advisory services, and payroll company. Some well-known companies that provide support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research study and get in touch with these companies straight to inquire about their services and charges.
Please keep in mind that the info supplied here is based on general knowledge and may not reflect the most current updates or modifications to the ERC. It is essential to talk to a tax professional or visit the main internal revenue service website for the most accurate and current info regarding eligibility, claiming treatments, and offered help.
Less than 100. If the employer had 100 or less staff members typically in 2019, then the credit is based.
on incomes paid to all staff members whether they actually worked or not. To put it simply, even if the.
employees worked full time and earned money for full time work, the company still gets the credit.
Greater than 100. If the company had more than 100 workers usually in 2019, then the credit is.
permitted only for incomes paid to employees who did not work throughout the calendar quarter.
In both cases, “salaries” includes not simply money payments but likewise a portion of the cost of company.
offered health care. Calculating Employee Retention Credit With Ppp
Payment.
Employers can be immediately repaid for the credit by lowering the amount of payroll taxes they.