Lets talk first about Cares Act Employee Retention Credit :
Our group here what do these men doing everyone in this space is assisting teach people about ERC and uh always provide a beautiful breakfast and have people really learn about the program we ought to head to the room where we are able to display some of the checks that we are getting for business and I ‘d like to see that what is this this is uh numerous millions of dollars actually Kevin numerous countless dollars so these are replicate copies of the letters that go to clients validating that the check is on the way I mean you understand if you simply start to look at a few of these here I suggest this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s just I imply think about the number of actual clients 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 confirmed and the check is on the mail in the mail from the IRS heading to the client so that’s how you’re able to track it you know when you
get this you know the check is gone for sure and that’s when they pay so they don’t pay anything until they really receive the cash they don’t pay bottom line Wonder trust anything till this letter is verified the check is on the way they transfer it into their checking account and they can really rely on Wonder trust that the process has actually been completed and the number of you believe you have actually processed because you started this we’re about 35 000 of these for
about 6 billion dollars wow so clearly they know what they’re doing which’s what you require 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 speaking about something actually crucial today the worker retention credit which the majority of you have never become aware of I certainly had not become aware of it up until extremely just recently and learned a lot about it due to the fact that this is most likely the lowest cost of capital for any small company anywhere
anytime if you have staff members 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 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 just call your bank supervisor and state provide 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 ended up being 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 employee retention credit Josh Fox what is an ERC let’s just begin there so during the Trump Administration when President Trump was enacted they created the cares Act and the cares act offered businesses three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everyone it makes a big distinction right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
fix the money cash payroll tax refund okay go on sorry I simply need to ensure we got that point I indicate 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 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 IRS all right so let’s speak about how it works since it sounds 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 Presumption this money is not for the owner not for individuals on the cap table not for investors it’s for workers right you needed to have owned a service however it’s based upon you having W-2 workers in America not 10.99. so as long as you had W-2 workers and you paid federal payroll taxes that’s why you would be qualified so you need 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 walk 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. all right so that’s how it’s measured you have to be on the W-2 during that duration now let’s talk my favorite part cash 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 wage to an optimum of 5 thousand dollars per staff member for the year of 2020 and in 2021 the numbers increased to 70 of the staff member’s income to an optimum of 7 thousand per quarter how did that take place um they just altered the rules in.
2021 versus since the chaos 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 5 thousand Max and after that what takes place 21 000 Max in 2021 oh that’s how you come up with 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 since that’s a lot of money it is now there’s a caveat 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 minimize the 26 000 so what we’re seeing usually Kevin is if you took PPP cash somewhere around 10 thousand dollars a person so let’s state hypothetically you owned a restaurant in New york city City where I’m from and you had a hundred employees and you took PPP money you would still get a million dollar in the mail from the IRS so it’s big certainly now the huge concern is why does no one understand about this due to the fact that look when I first heard about this when I initially met Josh you know I’ve got lots of financial investments in lots of companies I’m a significant supporter for entrepreneurship in America and make many numerous financial investments in entrepreneurs of which many suffered through the pandemic when I initially found out about this I called BS I don’t believe it because 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 used them wisely to survive throughout the pandemic so when I heard about this I stated nah it can’t hold true but when I dug around I even contacted us to my politician buddies Governor Senators they didn’t know about it I indicate 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 due to the fact that you took the PPP also not real so let’s ask Josh why does no one know about the worker retention credit you understand what’s intriguing you’re talking about the banks Kevin due to the fact that in the PPP loan procedure the federal government made it extremely 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 simply procedure process that’s all um and here there was turmoil since remember in the original cares act you might not do both programs so if you had actually done PPP you might refrain from doing ERC in the initial 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 federal government never made it clear to any person 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 don’t do it the payroll business yeah a few of them are doing it as a payroll company your accountant no your accounting professional’s never done this before unless you have an account that entered into this company and bottom line my company Kevin has actually been in business because 2009 and we’ve been working with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 companies so a lot of our huge big corporate customers have worked with bottom line to recover other government programs we’ve done sales tax and use tax unemployment tax work chance tax credits research and development tax credits unclaimed home property tax all of these other government programs.
The worker retention tax credit is a broad based refundable tax credit designed to motivate.
companies to keep staff members on their payroll. The credit is 50% of approximately $10,000 in earnings paid by an.
Since of COVID-19 or whose gross invoices, employer whose organization is completely or partly suspended.
decline by more than 50%.
1. The credit is readily available to all employers regardless of size consisting of tax exempt organizations. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) little.
organizations 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 company is completely or partially suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross invoices are below 50% of the similar quarter in 2019. As soon as the.
company’s gross receipts go above 80% of a similar quarter in 2019 they no longer qualify.
after the end of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the qualifying wages paid up to $10,000 in overall.
It is effective for incomes paid after March 13th and prior to December 31, 2020.
The meaning of certifying earnings differs by whether an employer had, typically, basically than.
100 staff members in 2019.
Business that specialize in ERC filing support generally offer expertise and assistance to help services browse the intricate process of claiming the credit. They can use numerous services, including:.
How is the employee retention credit calculated? Cares Act Employee Retention Credit
Eligibility Assessment: These companies will examine your service’s eligibility for the ERC based upon aspects such as your market, income, and operations. They can help identify if you meet the requirements for the credit and determine the maximum credit amount you can declare.
Paperwork and Calculation: ERC filing services will assist in gathering the necessary documents, such as payroll records and monetary declarations, to support your claim. They will also help compute the credit quantity based on qualified earnings and other qualifying expenditures.
Retroactive Claim Review: If you are eligible to declare the ERC for prior quarters, these business can review your previous payroll records and financials to identify prospective opportunities for retroactive credits. They can help you modify prior tax returns to declare these refunds.
Filing Support: Companies specializing in ERC filings will prepare and send the essential types and documents in your place. This consists of completing Kind 941 or any other necessary tax return.
Compliance and Updates: ERC regulations and guidance have actually evolved gradually. These companies remain updated with the most recent modifications and make sure that your filings adhere to the most present guidelines. They can likewise supply ongoing support if the IRS demands extra information or carries out an audit related to your ERC claim.
It is necessary to research and veterinarian any business offering ERC filing support to guarantee their credibility and proficiency. Look for recognized companies with experience in tax and payroll services, or consider reaching out to trusted accounting firms or tax experts who provide ERC submitting support.
Keep in mind that while these business can offer valuable help, it’s constantly a great idea to have a standard understanding of the ERC requirements and procedure yourself. This will help you make notified decisions and make sure accurate 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 objective of the ERC is to encourage services to keep and pay their employees during the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to eligible companies, including for-profit businesses, tax-exempt organizations, and certain governmental entities. To certify, employers must fulfill one of two criteria:.
Business operations were fully or partly suspended due to a federal government order related to COVID-19.
Business experienced a significant decline in gross invoices. As mentioned previously, for 2021, a substantial decline is specified as a 20% decrease 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 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 quantity is equal to a percentage (up to 70%) of certified earnings paid to staff members, consisting of certain health plan costs. The optimum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, services that received an Income Defense Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 allows companies to claim the ERC even if they got a PPP loan. However, the same earnings can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively broadened and boosted, allowing eligible companies to claim the credit for certified salaries paid as far back as March 13, 2020. This retroactive provision offers a chance for services to modify prior-year income tax return and receive refunds.
Claiming 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 quantity of employment taxes owed.
It is very important to keep in mind that the ERC provisions and eligibility requirements have actually progressed over time. The best course of action is to speak with a tax expert or visit the official internal revenue service website for the most in-depth and up-to-date details regarding the ERC, consisting of any current legal modifications or updates.
To receive the ERC, an organization must fulfill among the following requirements:.
The business operations were fully or partly suspended due to a government order related to COVID-19.
The business experienced a substantial decrease in gross invoices. For 2021, a substantial decrease is specified as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross receipts 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. For example, government entities and businesses that got a PPP loan may have constraints on claiming the credit.
The process for declaring the ERC involves finishing the needed kinds and consisting of the credit on your work income tax return (typically Kind 941). The exact time it requires to process the credit can vary based upon numerous elements, consisting of the intricacy of your company and the work of the IRS. It’s advised to consult with a tax expert for assistance specific to your scenario.
There are several business that can help with the procedure of claiming the ERC. Some well-known business that offer support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the info offered here is based upon general understanding and may not reflect the most recent updates or changes to the ERC. It is necessary to talk to a tax professional or check out the main IRS site for the most updated and precise info concerning eligibility, declaring treatments, and offered support.
Less than 100. If the employer had 100 or fewer employees typically in 2019, then the credit is based.
on incomes paid to all staff members whether they really worked or not. In other words, even if the.
employees worked full-time and made money 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.
enabled just for earnings paid to employees who did not work throughout the calendar quarter.
In both cases, “wages” includes not just cash payments but likewise a part of the cost of employer.
supplied healthcare. Cares Act Employee Retention Credit
Companies can be right away reimbursed for the credit by reducing the quantity of payroll taxes they.