Lets talk first about California Treatment Of Employee Retention Credit :
Our team here what do these guys doing everyone in this space is assisting teach people about ERC and uh always offer a stunning breakfast and have individuals actually find out about the program we should head to the room where we have the ability to show a few of the checks that we are getting for business and I wish to see that what is this this is uh hundreds of millions of dollars actually Kevin hundreds of countless dollars so these are replicate copies of the letters that go to customers verifying that the check is on the method I indicate you understand if you simply start to look at some of these here I indicate this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s simply I suggest think about how many actual clients 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 validated and the check is on the mail in the mail from the internal revenue service heading to the client so that’s how you have the ability to track it you understand when you
get this you know the check is chosen sure which’s when they pay so they don’t pay anything up until they actually receive the cash they do not pay bottom line Wonder trust anything till this letter is validated the check is on the way they deposit it into their bank account and they can genuinely rely on Wonder trust that the procedure has actually been ended up and how many you think you’ve processed because you started this we have to do with 35 000 of these for
about six billion dollars wow so clearly they understand what they’re doing and that’s what you need you require professionals 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 crucial today the staff member retention credit which most of you have never ever heard of I definitely hadn’t become aware of it till really recently and learned a lot about it due to the fact that this is probably the most affordable cost of capital for any small company anywhere
anytime if you have employees between five and five hundred so I’ve got the specialist with me this is Josh Fox he’s the creator and CEO of bottom line Concepts they’re the biggest processor of these ERC credits this is a 170 page program so it’s hard this isn’t like PPP we just contact your bank supervisor and say 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 spokesperson for this I love this program it’s going away very soon you got to find out all about it let’s talk worker retention credit Josh Fox what is an ERC let’s just begin there so during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act offered companies 3 opportunities 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 exactly so the ERC is a refund that’s.
fix the cash cash payroll tax refund alright go on sorry I simply need to make sure we got that point I suggest that’s a big distinction a loan versus money money I like money money 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 original cares Act is the ERC and yes Kevin it is a beautiful hard check in the mail where you get real money from the internal revenue service all right so let’s talk about how it works due to the fact that it sounds like to me if it’s a if it’s employee retention credit that person 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 investors it’s for workers right you had to have actually owned an organization but it’s based upon you having W-2 workers 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 first 6 months of 2021 on the W-2 appropriate so there were 6 quarters the program was open well stroll us through the six quarters so you had quarters two three and 4 of 2020 and you had quarters one 2 and 3 of 2021. okay so that’s how it’s determined you need to be on the W-2 throughout that duration now let’s talk my preferred part cash just how much can you return per employee that was on a W-2 in those six quarters so the estimation in 2020 to be precise Kevin is 50 of the worker’s income to a maximum of 5 thousand dollars per staff member for the year of 2020 and in 2021 the numbers increased to 70 of the employee’s wage to a maximum of 7 thousand per quarter how did that occur um they just 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 happens 21 000 Max in 2021 oh that’s how you develop twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty 6 thousand dollars per employee that is because that’s a lot of money it is now there’s a caution 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 reduce the 26 000 so what we’re seeing typically Kevin is if you took PPP cash somewhere around ten thousand dollars a person 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 huge clearly now the huge concern is why does nobody know about this due to the fact that appearance when I initially heard about this when I first met Josh you know I have actually got great deals of investments in great deals of business I’m a significant supporter for entrepreneurship in America and make numerous many financial investments in business owners of which lots of suffered through the pandemic when I initially heard about this I called BS I do not believe it due to the fact that I use 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 should have and we used them sensibly to stay alive throughout the pandemic so when I became aware of this I said nah it can’t be true but when I dug around I even contacted us to my politician friends Guv Senators they didn’t understand about it I suggest that’s how you understand that’s how false information is that there’s no details out there then a bunch of people told me well you can’t get it because you took the PPP likewise not true so let’s ask Josh why does no one know about the worker retention credit you know what’s interesting you’re speaking about the banks Kevin because in the PPP loan process 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 huge 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 process process that’s all um and here there was chaos due to the fact that remember in the initial cares act you might not do both programs so if you had done PPP you could not do 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 understand how to do this not actually she or he’s never ever done it before 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 accounting professional no your accountant’s never 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 have actually been dealing with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 business 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 use tax unemployment 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 developed to motivate.
employers to keep employees on their payroll. The credit is 50% of approximately $10,000 in incomes paid by an.
Because of COVID-19 or whose gross invoices, employer whose company is fully or partly suspended.
decrease by more than 50%.
1. The credit is readily available to all companies regardless of size consisting of tax exempt organizations. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
services who take Small Business Loans.
2. To qualify, 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 federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross receipts are below 50% of the equivalent quarter in 2019. When the.
company’s gross receipts exceed 80% of a similar quarter in 2019 they no longer certify.
after the end of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the certifying incomes paid up to $10,000 in total.
It is effective for wages paid after March 13th and prior to December 31, 2020.
The definition of certifying incomes varies by whether an employer had, on average, basically than.
100 employees in 2019.
Companies that specialize in ERC filing help usually supply proficiency and support to assist companies navigate the complex process of claiming the credit. They can use various services, consisting of:.
How is the employee retention credit calculated? California Treatment Of Employee Retention Credit
Eligibility Evaluation: These companies will assess your company’s eligibility for the ERC based upon elements such as your industry, earnings, and operations. They can help identify if you meet the requirements for the credit and recognize the optimum credit quantity you can claim.
Paperwork and Computation: ERC filing services will assist in collecting the necessary paperwork, such as payroll records and financial statements, to support your claim. They will also assist compute the credit quantity based on eligible salaries and other certifying expenses.
Retroactive Claim Review: If you are qualified to claim the ERC for previous quarters, these business can evaluate your past payroll records and financials to identify prospective opportunities for retroactive credits. They can assist you modify previous tax returns to claim these refunds.
Filing Help: Companies specializing in ERC filings will prepare and submit the necessary types and documents in your place. This consists of finishing Form 941 or any other necessary tax forms.
Compliance and Updates: ERC regulations and guidance have progressed gradually. These business stay upgraded with the latest modifications and guarantee that your filings comply with the most existing standards. If the IRS requests additional information or carries out an audit related to your ERC claim, they can also provide continuous assistance.
It’s important to research and vet any business offering ERC filing support to ensure their reliability and competence. Try to find recognized companies with experience in tax and payroll services, or consider reaching out to trusted accounting firms or tax specialists who offer ERC filing assistance.
Remember that while these business can supply valuable support, it’s constantly a good concept to have a basic understanding of the ERC requirements and process yourself. This will help you make notified decisions and guarantee accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief procedures. The goal of the ERC is to encourage businesses to keep and pay their workers throughout the pandemic, even if their operations have actually been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to qualified companies, including for-profit services, tax-exempt companies, and specific governmental entities. To certify, employers need to fulfill one of two requirements:.
The business operations were completely or partly suspended due to a government order related to COVID-19.
Business experienced a substantial decline in gross receipts. As mentioned previously, for 2021, a substantial decrease is defined as a 20% decrease in gross receipts 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 very same quarter in 2019, or a 20% decline in gross invoices compared to the immediately preceding quarter.
Credit Amount: 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 (as much as 70%) of certified salaries paid to staff members, consisting of specific health plan expenditures. 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, companies that got an Income Security Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 allows companies to declare the ERC even if they received a PPP loan. However, the very same wages can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and improved, enabling qualified employers to declare the credit for qualified earnings paid as far back as March 13, 2020. This retroactive provision supplies an opportunity for companies to amend prior-year income tax return and receive refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their work tax returns, generally Type 941. The excess can be refunded to the employer if the credit exceeds the amount of employment taxes owed.
It is necessary to keep in mind that the ERC arrangements and eligibility requirements have actually evolved in time. The best strategy is to speak with a tax professional or go to the official IRS site for the most updated and detailed info regarding the ERC, consisting of any current legal changes or updates.
To qualify for the ERC, a business needs to satisfy one of the following requirements:.
Business operations were fully or partially suspended due to a government order related to COVID-19.
Business experienced a considerable decrease in gross receipts. For 2021, a substantial decrease is defined as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decline in gross receipts 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 services of all sizes, including tax-exempt companies, but there are some exceptions. For example, federal government entities and organizations that received a PPP loan may have constraints on declaring the credit.
The procedure for declaring the ERC includes completing the required kinds and consisting of the credit on your employment income tax return (typically Form 941). The exact time it takes to process the credit can differ based upon numerous elements, including the intricacy of your business and the work of the IRS. It’s recommended to speak with a tax professional for guidance specific to your situation.
There are several companies that can aid with the process of declaring the ERC. These include accounting firms, tax advisory services, and payroll service providers. Some widely known companies that offer help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research study and call these business straight to inquire about their charges and services.
Please note that the info provided here is based on basic understanding and may not reflect the most current updates or changes to the ERC. It is very important to consult with a tax expert or go to the official internal revenue service site for the most precise and updated details regarding eligibility, claiming procedures, and offered assistance.
Less than 100. The credit is based if the employer had 100 or less employees on average in 2019.
on earnings paid to all staff members whether they in fact worked or not. Simply put, even if the.
staff members worked full time and made money for full-time work, the employer still gets the credit.
Greater than 100. The credit is if the employer had more than 100 staff members on average in 2019.
permitted only for salaries paid to employees who did not work during the calendar quarter.
In both cases, “incomes” includes not just cash payments but likewise a portion of the cost of company.
supplied health care. California Treatment Of Employee Retention Credit
Companies can be immediately reimbursed for the credit by minimizing the quantity of payroll taxes they.