Lets talk first about Cares Act 2022 Employee Retention Credit :
Our team here what do these guys doing everybody in this space is helping teach individuals about ERC and uh always supply a stunning breakfast and have individuals actually discover the program we need to head to the room where we are able to show some of the checks that we are getting for business and I want to see that what is this this is uh numerous countless 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 way I mean you understand if you simply begin to look at a few of these here I indicate this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I mean it’s just I imply consider how many 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 internal revenue service heading to the consumer so that’s how you’re able to track it you know when you
get this you understand the check is chosen sure and that’s when they pay so they do not pay anything up until they actually receive the money they do not pay bottom line Wonder trust anything until this letter is verified the check is on the way they transfer it into their bank account and they can genuinely rely on Wonder trust that the procedure has actually been finished and how many you think you’ve processed because you began this we’re about 35 000 of these for
about six billion dollars wow so plainly they know what they’re doing which’s what you require you need specialists 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 discussing something really crucial today the worker retention credit which the majority of you have actually never heard of I certainly hadn’t heard of it until really recently and learned a lot about it since this is probably the most affordable cost of capital for any small business anywhere
anytime if you have workers in between five and five hundred so I’ve got the specialist with me this is Josh Fox he’s the founder and CEO of bottom line Ideas they’re the largest processor of these ERC credits this is a 170 page program so it’s challenging this isn’t like PPP we simply call your bank manager and say give me a loan it does not 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’ve become yes the Ambassador and paid representative for this I like this program it’s going away soon you got to learn everything 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 created the cares Act and the cares act used services 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everybody it makes a huge difference right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the money cash payroll tax refund all right go on sorry I simply need to ensure we got that point I suggest that’s a big distinction a loan versus cash money I like money money that’s what we’re talking 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 initial cares Act is the ERC and yes Kevin it is a gorgeous hard check in the mail where you get actual money from the internal revenue service all right so let’s talk about how it works since it seems like to me if it’s a if it’s staff member retention credit that individual needed to be a worker so I’m going to make the Assumption this money is not for the owner not for individuals on the cap table not for shareholders it’s for workers right you needed to have actually owned a company however it’s based upon you having W-2 staff members 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 six quarters the program was open well stroll us through the 6 quarters so you had quarters two 3 and four of 2020 and you had quarters one 2 and three of 2021. okay so that’s how it’s determined you have to be on the W-2 during that duration now let’s talk my favorite part money how much can you get back per staff member that was on a W-2 in those 6 quarters so the calculation in 2020 to be exact Kevin is 50 of the worker’s income to an optimum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the employee’s salary to a maximum of seven thousand per quarter how did that take place um they simply changed the rules in.
2021 versus due to the fact that the turmoil 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 five thousand Max and then what occurs 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 great deal of money it is now there’s a caution here the PPP cash would have to be reduced 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 usually Kevin is if you took PPP cash someplace 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 staff members 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 big concern is why does no one understand about this due to the fact that look when I initially found out about this when I initially fulfilled Josh you understand I’ve got great deals of investments in lots of companies I’m a major advocate for entrepreneurship in America and make lots of many financial investments in entrepreneurs of which lots of suffered through the pandemic when I initially heard 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 and that were well should have and we used them sensibly to stay alive throughout the pandemic so when I became aware of this I stated nah it can’t hold true however when I dug around I even called to my politician friends Guv Senators they didn’t learn about it I imply that’s how you understand that’s how false information is that there’s no details out there then a lot of individuals 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 learn about the employee retention credit you understand what’s interesting you’re discussing the banks Kevin due to the fact that in the PPP loan process the federal government made it very clear that if you wanted 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 chaos since remember in the initial cares act you might not do both programs so if you had 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 because it’s not alone so you’re getting a tax refund so the government never ever made it clear to anybody about how to.
do this does your CFO know how to do this not really she or he’s never done it previously do the banks do it nope the banks don’t 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 went into this business and bottom line my firm Kevin has been in business because 2009 and we have actually been working with the federal government and the state federal government to recuperate money for Fortune 500 Fortune 1000 companies so a great deal of our huge big corporate customers have actually dealt with bottom line to recover other federal government programs we’ve done sales tax and use tax unemployment tax work opportunity tax credits research and development tax credits unclaimed property property tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit created to encourage.
companies to keep employees on their payroll. The credit is 50% of approximately $10,000 in wages paid by an.
Due to the fact that of COVID-19 or whose gross receipts, company whose company is completely or partially suspended.
decline by more than 50%.
1. The credit is offered to all companies no matter size including 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 certify, the company has to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s service is completely or partly suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross invoices are below 50% of the comparable quarter in 2019. Once the.
company’s gross invoices go above 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 salaries paid up to $10,000 in total.
It is effective for earnings paid after March 13th and before December 31, 2020.
The definition of qualifying wages differs by whether a company had, typically, basically than.
100 staff members in 2019.
Companies that specialize in ERC filing assistance generally provide expertise and assistance to help organizations navigate the complicated procedure of claiming the credit. They can provide different services, including:.
How is the employee retention credit calculated? Cares Act 2022 Employee Retention Credit
Eligibility Assessment: These business will evaluate your company’s eligibility for the ERC based upon aspects such as your market, profits, and operations. They can assist figure out if you meet the requirements for the credit and determine the maximum credit amount you can declare.
Documentation and Computation: ERC filing services will assist in collecting the essential documentation, such as payroll records and financial declarations, to support your claim. They will likewise help calculate the credit amount based on eligible incomes and other certifying costs.
Retroactive Claim Review: If you are qualified to claim the ERC for prior quarters, these business can evaluate your past payroll records and financials to recognize potential opportunities for retroactive credits. They can help you change prior tax returns to declare these refunds.
Filing Assistance: Companies focusing on ERC filings will prepare and submit the essential types and paperwork in your place. This includes completing Type 941 or any other necessary tax forms.
Compliance and Updates: ERC policies and guidance have progressed gradually. These companies stay upgraded with the latest modifications and guarantee that your filings abide by the most current standards. They can likewise provide ongoing assistance if the IRS requests extra info or performs an audit related to your ERC claim.
It’s important to research study and vet any company providing ERC filing support to ensure their trustworthiness and knowledge. Try to find established firms with experience in tax and payroll services, or consider reaching out to relied on accounting companies or tax experts who use ERC submitting support.
Keep in mind that while these companies can offer valuable help, it’s always a good concept to have a basic understanding of the ERC requirements and process yourself. This will assist you make informed decisions and make sure precise filings.
The Worker 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 encourage organizations to keep and pay their workers throughout the pandemic, even if their operations have been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to qualified companies, including for-profit services, tax-exempt organizations, and certain governmental entities. To qualify, companies should fulfill one of two requirements:.
The business operations were fully or partly suspended due to a federal government order related to COVID-19.
The business experienced a substantial decline in gross invoices. As discussed previously, for 2021, a considerable decrease is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decline 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.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount is equal to a percentage (as much as 70%) of certified earnings paid to employees, consisting of particular health insurance costs. The maximum credit per staff member is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, businesses that got a Paycheck Protection Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 allows companies to claim the ERC even if they received a PPP loan. Nevertheless, the very same wages can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and improved, permitting eligible companies to claim the credit for certified wages paid as far back as March 13, 2020. This retroactive provision provides a chance for services to amend prior-year income tax return and get refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their employment income tax return, normally Type 941. If the credit goes beyond the quantity of employment taxes owed, the excess can be refunded to the company.
It’s important to keep in mind that the ERC provisions and eligibility requirements have progressed with time. The best course of action is to seek advice from a tax expert or check out the main internal revenue service site for the most detailed and current info concerning the ERC, including any recent legislative changes or updates.
To get approved for the ERC, a business must meet among the following criteria:.
The business operations were fully or partially suspended due to a government order related to COVID-19.
The business experienced a considerable decline in gross receipts. For 2021, a substantial 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 specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
The ERC is available to companies of all sizes, consisting of tax-exempt organizations, however there are some exceptions. Federal government entities and companies that got a PPP loan may have limitations on claiming the credit.
The procedure for claiming the ERC includes completing the necessary types and including the credit on your employment tax return (generally Form 941). The exact time it requires to process the credit can differ based upon several factors, consisting of the complexity of your business and the workload of the internal revenue service. It’s suggested to seek advice from a tax professional for guidance specific to your situation.
There are a number of companies that can assist with the procedure of declaring the ERC. These include accounting firms, tax advisory services, and payroll company. Some widely known business that provide support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research study and get in touch with these business straight to ask about their charges and services.
Please note that the info supplied here is based upon general understanding and may not reflect the most current updates or changes to the ERC. It’s important to seek advice from a tax expert or visit the main internal revenue service site for the most precise and current info regarding eligibility, claiming treatments, and offered help.
Less than 100. The credit is based if the employer had 100 or fewer staff members on average in 2019.
on earnings paid to all workers whether they in fact worked or not. To put it simply, even if the.
workers worked full-time and got paid for full-time work, the company still gets the credit.
Greater than 100. The credit is if the employer had more than 100 employees on average in 2019.
permitted just for salaries paid to employees who did not work throughout the calendar quarter.
In both cases, “salaries” consists of not just cash payments however also a part of the cost of employer.
offered health care. Cares Act 2022 Employee Retention Credit
Companies can be instantly reimbursed for the credit by minimizing the amount of payroll taxes they.