Lets talk first about Cares Act Employee Retention Credit Qualified Wages :
Our team here what do these men doing everybody in this space is assisting teach people about ERC and uh always provide a lovely breakfast and have people actually discover the program we should head to the room where we are able to display some of the checks that we are getting for companies and I want 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 suggest you know if you simply start to take a 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 imply it’s just I mean think of the number of real 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 validated and the check is on the mail in the mail from the IRS heading to the customer so that’s how you have the ability to track it you know when you
get this you understand the check is opted for sure which’s when they pay so they do not pay anything until they in fact receive the money they do not pay bottom line Wonder trust anything until this letter is confirmed the check is on the method they transfer it into their checking account and they can really trust Wonder trust that the procedure has actually been completed and how many you believe you have actually processed given that you began this we have to do with 35 000 of these for
about six billion dollars wow so clearly they know what they’re doing and that’s what you require you require 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 speaking about something really essential today the employee retention credit which most of you have never ever heard of I definitely had not become aware of it till very just 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 workers in between 5 and five hundred so I’ve got the expert 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 difficult this isn’t like PPP we just phone 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 inform all of us about it and how to get it and why I’ve become yes the Ambassador and paid representative for this I enjoy this program it’s disappearing soon you got to learn all about it let’s talk worker retention credit Josh Fox what is an ERC let’s just begin there so throughout the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act used companies 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 huge difference right there 2 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 okay go on sorry I just need to make sure we got that point I imply that’s a huge distinction a loan versus money cash I like cash money that’s what we’re discussing fine 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 stunning hard check in the mail where you get real cash 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 worker retention credit that person had to be an employee 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 an organization but it’s based upon you having W-2 staff members in America not 10.99. so 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 need to be on payroll for the very first 6 months of 2021 on the W-2 correct so there were six quarters the program was open well walk us through the 6 quarters so you had quarters two 3 and four of 2020 and you had quarters one two and 3 of 2021. okay so that’s how it’s measured you need to be on the W-2 throughout that period now let’s talk my preferred part money how much can you return per staff member that was on a W-2 in those six quarters so the estimation in 2020 to be specific Kevin is 50 of the worker’s salary to an optimum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers escalated to 70 of the staff member’s wage to a maximum of 7 thousand per quarter how did that take place um they just altered the rules in.
2021 versus since the turmoil of the pandemic so they wanted 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 takes place 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 lot of money 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 usually 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 workers and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s substantial obviously now the big concern is why does nobody learn about this due to the fact that appearance when I first became aware of this when I initially fulfilled Josh you understand I have actually got lots of financial investments in lots of business I’m a significant supporter for entrepreneurship in America and make many lots of financial investments in entrepreneurs of which numerous suffered through the pandemic when I first became aware of this I called BS I do not believe it because I utilize the PPP we went through the cash center Banks to get it it was very easy to do we had our CEOs call the banks they got their loans and that were well been worthy of and we used them sensibly to stay alive throughout the pandemic so when I found out about this I stated nah it can’t hold true however when I dug around I even called to my politician pals Guv Senators they didn’t learn about it I suggest that’s how you understand that’s how false information is that there’s no info out there then a lot of people informed 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 staff member retention credit you understand what’s fascinating you’re talking about the banks Kevin since in the PPP loan process the federal government made it extremely clear that if you wanted a PPP loan you would call Wells Fargo Citibank Bank of America any of the huge banks in our country 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 turmoil due to the fact that keep in mind in the initial cares act you could refrain from doing both programs so if you had actually done PPP you could not do ERC in the initial program and when they changed the law in 2021 the banks were not 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 understand how to do this not actually he or she’s never done it in the past 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 ever done this before unless you have an account that went into this company and bottom line my firm Kevin has stayed in business because 2009 and we’ve been dealing with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 companies so a lot of our big huge corporate clients have actually dealt with bottom line to recover other federal government programs we’ve done sales tax and utilize tax unemployment tax work chance tax credits research and development tax credits unclaimed property real estate tax all of these other federal 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 as much as $10,000 in salaries paid by an.
Since of COVID-19 or whose gross receipts, employer whose business is completely or partly suspended.
decline by more than 50%.
1. The credit is available to all employers despite size consisting of tax exempt organizations. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
businesses who take Small Business Loans.
2. To qualify, the employer has to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s organization is totally or partly suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross receipts are listed below 50% of the similar quarter in 2019. Once 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 qualifying salaries paid up to $10,000 in total.
It works for wages paid after March 13th and before December 31, 2020.
The meaning of certifying wages varies by whether a company had, typically, more or less than.
100 workers in 2019.
Companies that concentrate on ERC filing assistance generally supply knowledge and support to assist companies browse the intricate process of claiming the credit. They can use different services, consisting of:.
How is the employee retention credit calculated? Cares Act Employee Retention Credit Qualified Wages
Eligibility Assessment: These companies will examine your service’s eligibility for the ERC based upon elements such as your industry, profits, and operations. If you satisfy the requirements for the credit and identify the maximum credit quantity you can declare, they can assist determine.
Documentation and Calculation: ERC filing services will help in gathering the required documentation, such as payroll records and financial declarations, to support your claim. They will likewise help compute the credit quantity based on qualified earnings and other qualifying expenditures.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for prior quarters, these companies can evaluate your past payroll records and financials to identify possible opportunities for retroactive credits. They can help you modify previous income tax return to claim these refunds.
Filing Assistance: Business concentrating on ERC filings will prepare and send the needed forms and paperwork in your place. This consists of finishing Kind 941 or any other necessary tax forms.
Compliance and Updates: ERC policies and guidance have evolved over time. These companies remain upgraded with the latest changes and make sure that your filings comply with the most present guidelines. If the Internal revenue service demands additional info or performs an audit associated to your ERC claim, they can also provide continuous assistance.
It is necessary to research and vet any company offering ERC filing help to ensure their trustworthiness and expertise. Try to find recognized companies with experience in tax and payroll services, or consider reaching out to trusted accounting companies or tax specialists who offer ERC filing support.
Keep in mind that while these business can offer important help, it’s constantly an excellent concept to have a basic understanding of the ERC requirements and procedure yourself. This will assist you make informed decisions and ensure precise 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 services to maintain and pay their workers throughout the pandemic, even if their operations have actually been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to qualified employers, consisting of for-profit businesses, tax-exempt companies, and certain governmental entities. To qualify, companies need to satisfy one of two requirements:.
Business operations were fully or partly suspended due to a government order related to COVID-19.
Business experienced a significant decline in gross invoices. As discussed previously, for 2021, a significant decrease is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a significant decline is defined 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 instantly preceding quarter.
Credit Quantity: 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 (as much as 70%) of certified incomes paid to employees, including certain health insurance expenses. 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, businesses that received a Paycheck Security Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 enables organizations to declare the ERC even if they got a PPP loan. The exact 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 improved, permitting qualified employers to claim the credit for certified incomes paid as far back as March 13, 2020. This retroactive arrangement offers an opportunity for services to amend 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, normally Form 941. If the credit surpasses the quantity of employment taxes owed, the excess can be reimbursed to the company.
It is necessary to keep in mind that the ERC provisions and eligibility criteria have evolved over time. The best strategy is to consult with a tax expert or visit the main internal revenue service website for the most current and in-depth information concerning the ERC, including any recent legislative changes or updates.
To receive the ERC, an organization needs to satisfy one of the following requirements:.
The business operations were totally or partly suspended due to a federal government order related to COVID-19.
Business experienced a significant decline in gross receipts. For 2021, a considerable decline is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a substantial 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 right away preceding quarter.
The ERC is available to businesses of all sizes, including tax-exempt companies, but there are some exceptions. Federal government entities and organizations that got a PPP loan might have restrictions on declaring the credit.
The process for claiming the ERC involves completing the needed types and including the credit on your employment tax return (typically Type 941). The exact time it takes to process the credit can vary based on several elements, including the intricacy of your organization and the work of the IRS. It’s advised to speak with a tax professional for assistance specific to your circumstance.
There are numerous companies that can assist with the procedure of declaring the ERC. Some popular companies that offer help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the information provided here is based on general understanding and may not show the most recent updates or changes to the ERC. It is necessary to speak with a tax professional or check out the official IRS website for the most current and accurate details relating to eligibility, claiming procedures, and offered help.
Less than 100. The credit is based if the employer had 100 or fewer employees on average in 2019.
on wages paid to all workers whether they in fact worked or not. Simply put, even if the.
employees 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 typically in 2019, then the credit is.
enabled just for earnings paid to staff members who did not work during the calendar quarter.
In both cases, “salaries” includes not simply money payments however likewise a portion of the expense of company.
offered health care. Cares Act Employee Retention Credit Qualified Wages
Employers can be instantly repaid for the credit by reducing the quantity of payroll taxes they.