Lets talk first about Care Act 2022 Employee Retention Credit :
Our team here what do these people doing everybody in this room is helping teach people about ERC and uh constantly offer a lovely breakfast and have people really learn about the program we must head to the room where we have the ability to display a few of the checks that we are getting for companies and I wish to see that what is this this is uh hundreds of countless dollars actually Kevin numerous countless dollars so these are replicate copies of the letters that go to clients verifying that the check is on the way I indicate you understand if you simply start to look at a few of these here I imply this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s just I imply consider how many real customers that went through the program yeah this is the very end this is the party 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 client so that’s how you have the ability to track it you understand when you
receive this you understand the check is chosen sure which’s when they pay so they do not pay anything until they actually receive the money they do not 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 really trust Wonder trust that the process has been completed and how many you think you’ve processed given that you started this we’re about 35 000 of these for
about 6 billion dollars wow so clearly they understand what they’re doing and that’s what you need 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 talking about something truly crucial today the staff member retention credit which most of you have never become aware of I certainly had not heard of it till really recently and learned 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 between 5 and five hundred so I have actually 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 not easy this isn’t like PPP we simply phone your bank manager and say offer me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to tell us all about it and how to get it and why I’ve ended up being yes the Ambassador and paid spokesperson for this I like this program it’s disappearing soon you got to discover all about it let’s talk staff member 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 services three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everybody it makes a big difference right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
fix the money money payroll tax refund alright go on sorry I just need to ensure we got that point I indicate that’s a big distinction a loan versus cash money I like money cash that’s what we’re speaking about 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 original cares Act is the ERC and yes Kevin it is a lovely hard check in the mail where you get actual money from the IRS all right so let’s speak about how it works because it seems like to me if it’s a if it’s staff member 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 needed to have actually owned a service but it’s based on you having W-2 workers in America not 10.99. As long as you had W-2 workers 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 six months of 2021 on the W-2 correct 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 two and 3 of 2021. fine so that’s how it’s determined you have to be on the W-2 throughout 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 specific Kevin is 50 of the staff member’s salary to an optimum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers increased to 70 of the employee’s salary to a maximum of seven thousand per quarter how did that occur um they just changed the rules in.
2021 versus because the turmoil 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 after that what occurs 21 000 Max in 2021 oh that’s how you create twenty 6 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 caution here the PPP money would need to be lowered from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would lower 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 state hypothetically you owned a dining establishment in New york city 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 clearly now the huge concern is why does nobody understand about this due to the fact that look when I first found out about this when I initially satisfied Josh you know I’ve got lots of investments in lots of companies I’m a major supporter for entrepreneurship in America and make numerous lots of financial investments in business owners of which many suffered through the pandemic when I first became aware of this I called BS I don’t think it due to the fact that I use 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 should have and we utilized them carefully to stay alive during the pandemic so when I heard about this I said nah it can’t hold true but when I dug around I even contacted us to my politician good friends Governor Senators they didn’t learn about it I mean that’s how you know that’s how false information is that there’s no information out there then a lot of people told me well you can’t get it due to the fact that you took the PPP also not true so let’s ask Josh why does no one know about the staff member retention credit you understand what’s interesting you’re talking about the banks Kevin due to the fact that 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 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 just process procedure that’s all um and here there was mayhem because remember in the initial cares act you could refrain from doing both programs so if you had actually done PPP you might not do ERC in the initial 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 made it clear to anybody about how to.
do this does your CFO know how to do this not actually he or she’s never ever done it before do the banks do it nope the banks do not do it the payroll business yeah a few of them are doing it as a payroll business your accountant no your accountant’s never done this prior to unless you have an account that entered into this service and bottom line my firm Kevin has actually been in business since 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 clients have dealt with bottom line to recuperate other government programs we’ve done sales tax and use tax joblessness tax work chance tax credits research and development tax credits unclaimed home property tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit created to encourage.
employers to keep staff members on their payroll. The credit is 50% of approximately $10,000 in wages paid by an.
employer whose company is completely or partially suspended because of COVID-19 or whose gross invoices.
decrease by more than 50%.
1. The credit is available to all employers despite size consisting of tax exempt companies. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) small.
services who take Small company Loans.
2. To qualify, the employer needs to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s organization is completely or partly suspended by government order due to COVID-19.
during the calendar quarter or.
o the company’s gross invoices are listed below 50% of the comparable quarter in 2019. Once the.
employer’s gross invoices exceed 80% of a similar quarter in 2019 they no longer certify.
after completion of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the certifying earnings paid up to $10,000 in total.
It works for salaries paid after March 13th and before December 31, 2020.
The definition of qualifying salaries varies by whether an employer had, on average, basically than.
100 staff members in 2019.
Business that concentrate on ERC filing support typically offer proficiency and support to help companies navigate the complex process of claiming the credit. They can offer different services, including:.
How is the employee retention credit calculated? Care Act 2022 Employee Retention Credit
Eligibility Evaluation: These business will assess your business’s eligibility for the ERC based upon elements such as your industry, earnings, and operations. If you satisfy the requirements for the credit and recognize the maximum credit quantity you can declare, they can assist determine.
Paperwork and Calculation: ERC filing services will assist in gathering the necessary paperwork, such as payroll records and monetary statements, to support your claim. They will also help calculate the credit quantity based upon eligible earnings and other certifying costs.
Retroactive Claim Review: If you are qualified to declare the ERC for prior quarters, these companies can review your past payroll records and financials to identify possible chances for retroactive credits. They can assist you change prior income tax return to declare these refunds.
Filing Help: Companies concentrating on ERC filings will prepare and submit the necessary types and paperwork in your place. This consists of finishing Type 941 or any other necessary tax return.
Compliance and Updates: ERC guidelines and assistance have actually progressed gradually. These companies stay updated with the latest modifications and make sure that your filings adhere to the most current standards. If the IRS demands additional info or carries out an audit associated to your ERC claim, they can likewise supply continuous assistance.
It is essential to research study and vet any business providing ERC filing assistance to ensure their credibility and knowledge. Search for recognized companies with experience in tax and payroll services, or consider reaching out to relied on accounting firms or tax experts who offer ERC filing support.
Bear in mind that while these business can offer important assistance, it’s constantly a great concept to have a basic understanding of the ERC requirements and procedure yourself. This will assist you make informed choices 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 steps. The objective of the ERC is to encourage services to maintain and pay their employees throughout the pandemic, even if their operations have actually been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to qualified companies, consisting of for-profit organizations, tax-exempt companies, and specific governmental entities. To certify, employers need to satisfy one of two requirements:.
The business operations were totally or partly suspended due to a government order related to COVID-19.
The business experienced a substantial decrease in gross receipts. As mentioned 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 considerable decline 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 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 quantity amounts to a percentage (approximately 70%) of certified incomes paid to employees, including particular 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: Initially, businesses that received an Income Defense Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 enables companies to claim the ERC even if they got a PPP loan. The same salaries can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and enhanced, allowing qualified employers to declare the credit for certified wages paid as far back as March 13, 2020. This retroactive arrangement supplies an opportunity for services to change prior-year income tax return and receive refunds.
Declaring the Credit: Employers can declare the ERC by reporting it on their employment tax returns, usually Form 941. The excess can be reimbursed to the employer if the credit exceeds the amount of work taxes owed.
It’s important to note that the ERC provisions and eligibility criteria have progressed in time. The best strategy is to talk to a tax professional or check out the main internal revenue service site for the most in-depth and current info relating to the ERC, including any current legislative changes or updates.
To receive the ERC, a company needs to meet among the following requirements:.
Business operations were totally or partly suspended due to a federal government order related to COVID-19.
Business experienced a substantial decline in gross receipts. For 2021, a significant decline is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a significant decline is defined 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 right away preceding quarter.
The ERC is available to services of all sizes, consisting of tax-exempt organizations, but there are some exceptions. Federal government entities and services that received a PPP loan may have restrictions on claiming the credit.
The procedure for claiming the ERC involves finishing the required kinds and including the credit on your work income tax return (generally Form 941). The exact time it requires to process the credit can vary based on several factors, consisting of the intricacy of your business and the workload of the internal revenue service. It’s advised to speak with a tax expert for guidance particular to your circumstance.
There are numerous companies that can aid with the procedure of declaring the ERC. These include accounting companies, tax advisory services, and payroll service providers. Some well-known companies that use help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research study and call these business straight to inquire about their services and costs.
Please note that the info supplied here is based on basic understanding and may not show the most current updates or modifications to the ERC. It is essential to consult with a tax professional or visit the official internal revenue service website for the most precise and current details regarding eligibility, declaring treatments, and offered help.
Less than 100. The credit is based if the company had 100 or fewer workers on average in 2019.
on salaries paid to all staff members whether they actually worked or not. To put it simply, even if the.
staff members worked full-time and earned money for full-time work, the employer still gets the credit.
Greater than 100. If the employer had more than 100 staff members on average in 2019, then the credit is.
permitted just for salaries paid to employees who did not work throughout the calendar quarter.
In both cases, “salaries” includes not simply cash payments but also a part of the cost of company.
provided health care. Care Act 2022 Employee Retention Credit
Employers can be instantly reimbursed for the credit by minimizing the quantity of payroll taxes they.