Lets talk first about California Employee Retention Credit :
Our group here what do these people doing everyone in this space is assisting teach people about ERC and uh always offer a gorgeous breakfast and have people actually find out about the program we ought to head to the room where we have the ability to display a few of the checks that we are getting for business and I ‘d like to see that what is this this is uh numerous millions of dollars literally Kevin hundreds of countless dollars so these are duplicate copies of the letters that go to customers confirming that the check is on the method I suggest you understand if you just start to 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 indicate it’s simply I suggest think about the number of actual customers 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 confirmed 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 understand the check is gone for sure which’s when they pay so they don’t pay anything up until they actually get the money they don’t pay bottom line Wonder trust anything till this letter is validated the check is on the way they transfer it into their checking account and they can genuinely rely on Wonder trust that the process has actually been finished and the number of you think you have actually processed considering that you started this we have to do with 35 000 of these for
about 6 billion dollars wow so clearly they know what they’re doing which’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 Fantastic here you’re at my YouTube channel we’re discussing something truly important today the worker retention credit which the majority of you have never become aware of I certainly hadn’t heard of it till very recently and discovered a lot about it due to the fact that this is probably the most affordable expense of capital for any small company anywhere
anytime if you have employees between five 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 biggest processor of these ERC credits this is a 170 page program so it’s challenging this isn’t like PPP we just contact your bank manager and state give me a loan it does not 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 become yes the Ambassador and paid representative for this I enjoy this program it’s disappearing soon you got to learn everything about it let’s talk employee retention credit Josh Fox what is an ERC let’s just begin there so throughout the Trump Administration when President Trump was enacted they developed the cares Act and the cares act offered services 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 two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the money money payroll tax refund alright go on sorry I just have to make sure we got that point I imply that’s a big difference a loan versus cash cash I like cash cash that’s what we’re discussing 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 tough check in the mail where you get real money from the internal revenue service 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 worker retention credit that individual had to be a worker 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 staff members right you needed to have owned a service but 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 correct so there were six quarters the program was open well walk us through the six quarters so you had quarters 2 3 and 4 of 2020 and you had quarters one two and three of 2021. alright so that’s how it’s measured you have to be on the W-2 during that duration now let’s talk my preferred part money just how much can you get back per worker that was on a W-2 in those six quarters so the calculation in 2020 to be precise Kevin is 50 of the staff member’s salary to an optimum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the staff member’s wage to a maximum of seven thousand per quarter how did that happen um they just changed the rules in.
2021 versus since 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 approximately five thousand Max and after that what happens 21 000 Max in 2021 oh that’s how you create twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty 6 thousand dollars per staff member that is because that’s a lot of cash it is now there’s a caveat here the PPP cash 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 on average Kevin is if you took PPP cash somewhere around ten thousand dollars an individual so let’s state hypothetically you owned a restaurant in New york city City where I’m from and you had a hundred employees and you took PPP money you would still get a million dollar in the mail from the internal revenue service so it’s substantial obviously now the big question is why does nobody learn about this because appearance when I initially heard about this when I first satisfied Josh you understand I’ve got lots of financial investments in lots of business I’m a significant advocate for entrepreneurship in America and make numerous lots of investments in entrepreneurs of which lots of suffered through the pandemic when I first found out about this I called BS I don’t believe it due to the fact that 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 deserved and we used them sensibly to survive 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 political leader good friends Governor Senators they didn’t know about it I suggest 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 talking about the banks Kevin due to the fact that in the PPP loan process the federal government made it really clear that if you desired 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 just procedure procedure that’s all um and here there was chaos because 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 changed 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 federal government never ever made it clear to anyone about how to.
do this does your CFO understand how to do this not actually he or she’s never ever done it before 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 company your accounting professional no your accounting professional’s never done this prior to 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 have actually been dealing with the federal government and the state government to recuperate money for Fortune 500 Fortune 1000 companies so a great deal of our huge huge corporate customers have actually worked with bottom line to recuperate other government programs we have actually done sales tax and utilize tax joblessness tax work chance tax credits research and development tax credits unclaimed home property tax all of these other government programs.
The staff member retention tax credit is a broad based refundable tax credit designed to motivate.
employers to keep staff members on their payroll. The credit is 50% of as much as $10,000 in incomes paid by an.
company whose service is totally or partly suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
Availability.
1. The credit is available to all companies despite size including tax exempt companies. There are.
just two exceptions: (1) state and city governments and their instrumentalities and (2) little.
businesses who take Small company Loans.
2. To certify, the employer needs to satisfy one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s service is completely or partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross receipts are below 50% of the similar quarter in 2019. As soon as the.
employer’s gross receipts exceed 80% of an equivalent quarter in 2019 they no longer certify.
after completion of that quarter.
Computation of the Credit.
The quantity of the credit is 50% of the certifying salaries paid up to $10,000 in total.
It is effective for wages paid after March 13th and before December 31, 2020.
The definition of qualifying earnings varies by whether a company had, usually, more or less than.
100 workers in 2019.
Companies that focus on ERC filing assistance typically provide expertise and assistance to help services navigate the complicated procedure of claiming the credit. They can offer numerous services, consisting of:.
How is the employee retention credit calculated? California Employee Retention Credit
Eligibility Assessment: These business will examine your service’s eligibility for the ERC based upon elements such as your market, profits, and operations. They can help determine if you meet the requirements for the credit and determine the maximum credit amount you can claim.
Paperwork and Computation: ERC filing services will assist in gathering the required documentation, such as payroll records and monetary declarations, to support your claim. They will likewise assist calculate the credit amount based on qualified earnings and other certifying costs.
Retroactive Claim Review: If you are eligible to declare the ERC for prior quarters, these companies can examine your past payroll records and financials to recognize possible chances for retroactive credits. They can help you change prior tax returns to declare these refunds.
Filing Help: Business focusing on ERC filings will prepare and send the needed forms and documentation on your behalf. This consists of finishing Type 941 or any other necessary tax forms.
Compliance and Updates: ERC regulations and guidance have actually progressed in time. These business stay upgraded with the most recent modifications and make sure that your filings adhere to the most present standards. If the IRS requests additional details or carries out an audit related to your ERC claim, they can also supply ongoing support.
It’s important to research study and vet any company offering ERC filing support to guarantee their credibility and knowledge. Look for recognized companies with experience in tax and payroll services, or think about reaching out to trusted accounting companies or tax professionals who offer ERC submitting support.
Bear in mind that while these business can supply important assistance, it’s always a great idea to have a basic understanding of the ERC requirements and process yourself. This will assist you make notified choices and guarantee accurate filings.
The Employee 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 motivate organizations to maintain 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 available to qualified companies, consisting of for-profit companies, tax-exempt organizations, and specific governmental entities. To qualify, companies should satisfy one of two requirements:.
Business operations were completely or partly suspended due to a federal government order related to COVID-19.
The business experienced a substantial decline in gross invoices. As pointed out previously, for 2021, a significant decrease is defined as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decline in gross invoices compared to the immediately preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit quantity amounts to a percentage (as much as 70%) of qualified incomes paid to workers, including particular health insurance expenditures. 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, companies that got an Income Defense Program (PPP) loan were not eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 allows companies to claim the ERC even if they received a PPP loan. The same earnings can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and boosted, allowing eligible employers to claim the credit for qualified incomes paid as far back as March 13, 2020. This retroactive arrangement provides an opportunity for businesses to modify prior-year income tax return and get refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their employment income tax return, typically Type 941. If the credit goes beyond the quantity of employment taxes owed, the excess can be refunded to the company.
It is essential to note that the ERC arrangements and eligibility requirements have actually developed with time. The best course of action is to talk to a tax expert or go to the main IRS site for the most updated and detailed info relating to the ERC, including any current legislative changes or updates.
To receive the ERC, a business should fulfill among the following requirements:.
The business operations were totally or partly suspended due to a government order related to COVID-19.
Business experienced a considerable decrease in gross invoices. 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 considerable decline is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
The ERC is readily available to organizations of all sizes, including tax-exempt companies, however there are some exceptions. Government entities and companies that got a PPP loan might have constraints on declaring the credit.
The procedure for claiming the ERC involves finishing the necessary kinds and consisting of the credit on your work tax return (typically Type 941). The exact time it takes to process the credit can differ based upon a number of aspects, including the complexity of your service and the work of the internal revenue service. It’s suggested to seek advice from a tax professional for assistance specific to your situation.
There are a number of companies that can assist with the process of declaring the ERC. Some well-known business that offer support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the information supplied here is based on general knowledge and might not show the most current updates or changes to the ERC. It is essential to speak with a tax professional or go to the official IRS website for the most updated and precise details concerning eligibility, claiming procedures, and readily available help.
Less than 100. If the company had 100 or fewer staff members usually in 2019, then the credit is based.
on earnings paid to all workers whether they in fact worked or not. In other words, even if the.
workers worked full-time and earned money for full-time work, the company still gets the credit.
Greater than 100. The credit is if the company had more than 100 workers on average in 2019.
enabled just for earnings paid to staff members who did not work throughout the calendar quarter.
In both cases, “wages” consists of not simply cash payments however likewise a portion of the expense of employer.
provided healthcare. California Employee Retention Credit
Payment.
Companies can be immediately compensated for the credit by decreasing the amount of payroll taxes they.