Lets talk first about Cares Act Employee Retention Credit Eligibility :
Our group here what do these men doing everybody in this space is assisting teach individuals about ERC and uh constantly offer a stunning breakfast and have people truly discover the program we ought to head to the room where we have the ability to show some of the checks that we are getting for companies and I ‘d like to see that what is this this is uh hundreds of countless dollars actually Kevin numerous millions of dollars so these are duplicate copies of the letters that go to clients confirming that the check is on the method I suggest you understand if you just start to look at some 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 simply I suggest think of how many actual customers 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 validated and the check is on the mail in the mail from the internal revenue service heading to the consumer so that’s how you have the ability to track it you know when you
get this you know the check is chosen sure and that’s when they pay so they do not pay anything up until they really get the money 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 bank account and they can truly trust Wonder trust that the process has actually been completed and how many you believe you have actually processed since you started this we’re about 35 000 of these for
about six billion dollars wow so plainly they understand what they’re doing and that’s what you require 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 talking about something truly important today the employee retention credit which most of you have never become aware of I definitely hadn’t heard of it up until extremely just recently and discovered a lot about it because this is most likely the most affordable expense of capital for any small business anywhere
anytime if you have staff members between five and five hundred so I have actually got the specialist with me this is Josh Fox he’s the creator and CEO of bottom line Principles 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 just contact your bank supervisor and say provide me a loan it doesn’t 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 have actually become yes the Ambassador and paid representative for this I like this program it’s disappearing soon you got to find out 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 businesses three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everyone it makes a huge difference right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the money cash payroll tax refund fine go on sorry I simply have to ensure we got that point I indicate that’s a big difference 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 initial cares Act is the ERC and yes Kevin it is a lovely hard check in the mail where you get real money from the IRS all right so let’s speak 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 staff member so I’m going to make the Presumption this money is not for the owner not for people on the cap table not for investors it’s for staff members right you had to have owned an organization but it’s based on you having W-2 employees 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 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 right so there were six quarters the program was open well stroll us through the 6 quarters so you had quarters two 3 and 4 of 2020 and you had quarters one two and three of 2021. fine so that’s how it’s measured you need to be on the W-2 during that period now let’s talk my favorite part money just how much can you return per staff member that was on a W-2 in those 6 quarters so the computation in 2020 to be precise Kevin is 50 of the staff member’s salary to a maximum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s salary to an optimum of seven thousand per quarter how did that occur um they simply changed the rules in.
2021 versus due to the fact that the chaos of the pandemic so they wished to even get more to keep those employees 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 develop twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per employee that is because that’s a great deal of cash it is now there’s a caution here the PPP money would have to be decreased from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would decrease the 26 000 so what we’re seeing usually Kevin is if you took PPP cash somewhere around ten thousand dollars an individual so let’s state hypothetically you owned a dining establishment in New york city City where I’m from and you had a hundred workers 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 big question is why does no one know about this since appearance when I first found out about this when I first fulfilled Josh you understand I have actually got lots of investments in lots of companies I’m a significant supporter for entrepreneurship in America and make numerous lots of financial investments in business owners of which lots of suffered through the pandemic when I initially became aware of this I called BS I do not think it since I use the PPP we went through the money 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 deserved and we used them wisely to survive throughout the pandemic so when I found out about this I said nah it can’t be true however when I dug around I even contacted us to my politician pals Governor Senators they didn’t learn about it I suggest that’s how you know that’s how misinformation is that there’s no details out there then a bunch of individuals 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 nobody know about the worker 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 desired a PPP loan you would call Wells Fargo Citibank Bank of America any of the huge 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 simply process process that’s all um and here there was turmoil since keep in mind in the initial cares act you could refrain from doing both programs so if you had done PPP you could refrain from doing ERC in the initial program and when they changed the law in 2021 the banks were not doing ERC since it’s not alone so you’re getting a tax refund so the government never made it clear to any person about how to.
do this does your CFO understand how to do this not really he or she’s never done it previously do the banks do it nope the banks do not do it the payroll companies yeah some of them are doing it as a payroll company your accountant no your accounting professional’s never ever done this prior to unless you have an account that entered into this business and bottom line my company Kevin has been in business considering that 2009 and we’ve been dealing with the federal government and the state government to recover money for Fortune 500 Fortune 1000 business so a lot of our big huge corporate clients have dealt with bottom line to recover other government programs we’ve done sales tax and use tax joblessness tax work chance tax credits research and development tax credits unclaimed property property tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit created to motivate.
employers to keep workers on their payroll. The credit is 50% of approximately $10,000 in wages paid by an.
Because of COVID-19 or whose gross receipts, company whose service is completely or partially suspended.
decline by more than 50%.
1. The credit is readily available to all employers despite size including tax exempt companies. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
services who take Small Business Loans.
2. To certify, the employer needs to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s company is fully or partly suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross receipts are listed below 50% of the similar quarter in 2019. When the.
employer’s gross invoices go above 80% of a comparable quarter in 2019 they no longer qualify.
after the end of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the certifying wages paid up to $10,000 in overall.
It is effective for earnings paid after March 13th and before December 31, 2020.
The meaning of certifying incomes differs by whether a company had, on average, basically than.
100 staff members in 2019.
Companies that focus on ERC filing help typically provide competence and assistance to assist organizations browse the intricate procedure of declaring the credit. They can offer numerous services, including:.
How is the employee retention credit calculated? Cares Act Employee Retention Credit Eligibility
Eligibility Evaluation: These companies will assess your company’s eligibility for the ERC based upon factors such as your industry, profits, and operations. If you fulfill the requirements for the credit and identify the maximum credit quantity you can claim, they can assist identify.
Paperwork and Estimation: ERC filing services will assist in collecting the essential documents, such as payroll records and monetary statements, to support your claim. They will also help determine the credit quantity based on eligible incomes and other qualifying expenditures.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for previous quarters, these business can review your previous payroll records and financials to identify prospective opportunities for retroactive credits. They can help you amend prior income tax return to claim these refunds.
Filing Support: Business concentrating on ERC filings will prepare and send the essential forms and documents on your behalf. This consists of finishing Kind 941 or any other required tax return.
Compliance and Updates: ERC policies and guidance have actually developed with time. These business remain upgraded with the latest modifications and ensure that your filings adhere to the most present standards. If the Internal revenue service requests extra details or carries out an audit related to your ERC claim, they can also offer continuous support.
It’s important to research study and vet any business offering ERC filing support to ensure their credibility and competence. Look for established companies with experience in tax and payroll services, or think about reaching out to relied on accounting firms or tax professionals who provide ERC submitting assistance.
Remember that while these business can supply valuable help, it’s always an excellent idea to have a fundamental understanding of the ERC requirements and procedure yourself. This will assist you make informed decisions and guarantee accurate filings.
The Worker 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 motivate businesses to maintain and pay their employees throughout the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to eligible companies, including for-profit organizations, tax-exempt organizations, and certain governmental entities. To qualify, companies should fulfill one of two criteria:.
Business operations were completely or partly suspended due to a federal government order related to COVID-19.
The business experienced a considerable decrease in gross receipts. As discussed previously, for 2021, a considerable decrease is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross invoices compared to the immediately 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 portion (approximately 70%) of certified salaries paid to employees, including specific health insurance expenditures. The optimum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, organizations that got a Paycheck Security Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 permits businesses to declare the ERC even if they received a PPP loan. Nevertheless, the same incomes can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively expanded and enhanced, allowing qualified companies to declare the credit for qualified earnings paid as far back as March 13, 2020. This retroactive arrangement offers an opportunity for businesses to modify prior-year tax returns and get refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their employment income tax return, normally Type 941. The excess can be reimbursed to the employer if the credit exceeds the quantity of work taxes owed.
It’s important to note that the ERC provisions and eligibility criteria have progressed with time. The best strategy is to seek advice from a tax professional or go to the main IRS website for the most detailed and updated info regarding the ERC, including any recent legislative changes or updates.
To get approved for the ERC, a service needs to satisfy among the following criteria:.
Business operations were fully or partly suspended due to a federal government order related to COVID-19.
The business experienced a significant decrease in gross invoices. For 2021, a considerable decrease is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decrease in gross invoices compared to the right away preceding quarter.
The ERC is available to services of all sizes, including tax-exempt organizations, however there are some exceptions. For instance, federal government entities and companies that got a PPP loan might have restrictions on declaring the credit.
The process for declaring the ERC includes finishing the necessary types and consisting of the credit on your work income tax return (normally Kind 941). The exact time it takes to process the credit can differ based upon numerous aspects, consisting of the intricacy of your organization and the work of the IRS. It’s advised to speak with a tax expert for assistance particular to your circumstance.
There are a number of business that can help with the process of claiming the ERC. Some popular business that provide assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the info provided here is based on general understanding and might not show the most recent updates or modifications to the ERC. It’s important to speak with a tax professional or go to the official internal revenue service site for the most accurate and up-to-date details concerning eligibility, claiming procedures, and readily available support.
Less than 100. The credit is based if the employer had 100 or fewer employees on average in 2019.
on salaries paid to all staff members whether they really worked or not. Simply put, even if the.
workers worked full-time and got paid for full-time work, the employer still gets the credit.
Greater than 100. The credit is if the company had more than 100 employees on average in 2019.
allowed just for earnings paid to staff members who did not work during the calendar quarter.
In both cases, “incomes” includes not just money payments however also a portion of the expense of company.
provided healthcare. Cares Act Employee Retention Credit Eligibility
Employers can be right away repaid for the credit by reducing the amount of payroll taxes they.