Lets talk first about Cash Basis Taxpayer And Employee Retention Credit :
Our team here what do these men doing everybody in this space is helping teach individuals about ERC and uh always offer a lovely breakfast and have individuals truly learn about the program we need to head to the room where we are able 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 numerous millions of dollars actually Kevin numerous countless dollars so these are duplicate copies of the letters that go to customers verifying that the check is on the way I indicate you know if you simply begin to look at a few of these here I mean this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I mean it’s simply I mean think about the number of real clients that went through the program yeah this is the very end this is the celebration at the end when the check is validated the numbers are verified and the check is on the mail in the mail from the IRS heading to the client so that’s how you have the ability to track it you understand when you
get this you understand the check is chosen sure and that’s when they pay so they do not pay anything until they really get the cash they don’t pay bottom line Wonder trust anything up until this letter is verified the check is on the way they deposit it into their bank account and they can genuinely trust Wonder trust that the process has actually been completed and the number of you believe you have actually processed given that you started this we’re about 35 000 of these for
about 6 billion dollars wow so plainly they understand 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 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 worker retention credit which the majority of you have actually never ever become aware of I definitely had not become aware of it until very recently and found out a lot about it due to the fact that this is most likely the most affordable expense of capital for any small company anywhere
anytime if you have employees in between 5 and five hundred so I have actually got the professional with me this is Josh Fox he’s the creator and CEO of bottom line Concepts they’re the biggest processor of these ERC credits this is a 170 page program so it’s challenging this isn’t like PPP we just phone your bank supervisor and state provide me a loan it doesn’t 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 become yes the Ambassador and paid spokesperson for this I enjoy this program it’s going away very soon you got to learn all 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 developed the cares Act and the cares act provided services 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone it makes a huge 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 cash payroll tax refund okay go on sorry I just have to make certain we got that point I imply that’s a huge difference a loan versus cash money I like money 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 beautiful difficult check in the mail where you get actual cash from the internal revenue service all right so let’s discuss how it works since it sounds like to me if it’s a if it’s worker retention credit that individual needed to be an employee so I’m going to make the Assumption this cash is not for the owner not for people on the cap table not for investors it’s for workers right you needed to have actually owned an organization however it’s based on you having W-2 employees 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 have to be on payroll in 2020 on the W-2 and you need to be on payroll for the first six months of 2021 on the W-2 appropriate so there were six quarters the program was open well walk us through the 6 quarters so you had quarters two three and four of 2020 and you had quarters one two and three of 2021. all right 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 employee that was on a W-2 in those 6 quarters so the calculation in 2020 to be exact Kevin is 50 of the staff member’s wage to an optimum of 5 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 seven thousand per quarter how did that happen um they simply altered the rules in.
2021 versus due to the fact that the mayhem 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 approximately five thousand Max and then 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 5 thousand in twenty twenty that’s twenty six thousand dollars per staff member that is since 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 six thousand dollars so if you took PPP loan one and PPP loan 2 you would reduce the 26 000 so what we’re seeing typically Kevin is if you took PPP money someplace around 10 thousand dollars a person so let’s say hypothetically you owned a dining establishment in New York 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 huge certainly now the big concern is why does no one understand about this since appearance when I first heard about this when I initially met Josh you know I’ve got lots of financial investments in lots of business I’m a major supporter for entrepreneurship in America and make numerous many investments in entrepreneurs of which numerous suffered through the pandemic when I initially found out about this I called BS I don’t think it because 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 which were well deserved and we utilized them wisely to survive throughout the pandemic so when I became aware of this I said nah it can’t be true however when I dug around I even called to my politician good friends Guv Senators they didn’t understand about it I mean that’s how you understand that’s how misinformation is that there’s no details out there then a bunch of people told me well you can’t get it since you took the PPP likewise not true so let’s ask Josh why does no one understand about the staff member retention credit you know what’s interesting you’re speaking about the banks Kevin because in the PPP loan procedure the federal government made it really clear that if you wanted a PPP loan you would call Wells Fargo Citibank Bank of America any of the big banks in our nation 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 remember in the initial cares act you could refrain from doing both programs so if you had done PPP you might not do ERC in the initial program and when they altered 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 ever made it clear to anyone about how to.
do this does your CFO understand how to do this not really she or he’s never ever done it previously do the banks do it nope the banks don’t do it the payroll business yeah some of them are doing it as a payroll business your accounting professional no your accounting professional’s never done this before unless you have an account that entered into this organization and bottom line my company Kevin has actually stayed in business because 2009 and we’ve been dealing with the federal government and the state government to recover money for Fortune 500 Fortune 1000 companies so a great deal of our big huge corporate clients have actually worked with bottom line to recover other federal government programs we have actually done sales tax and utilize tax joblessness tax work chance tax credits research and development tax credits unclaimed home real estate tax all of these other federal government programs.
The employee 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 up to $10,000 in incomes paid by an.
Because of COVID-19 or whose gross receipts, company whose service is totally or partly suspended.
decline by more than 50%.
1. The credit is readily available to all companies regardless of size including tax exempt organizations. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
businesses who take Small Business Loans.
2. To qualify, the company has to meet one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s organization is totally or partially suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are listed below 50% of the equivalent quarter in 2019. When the.
company’s gross invoices go above 80% of a comparable 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 total.
It is effective for wages paid after March 13th and before December 31, 2020.
The meaning of qualifying salaries varies by whether an employer had, on average, more or less than.
100 staff members in 2019.
Business that concentrate on ERC filing assistance normally offer know-how and support to assist organizations browse the complicated procedure of declaring the credit. They can offer numerous services, including:.
How is the employee retention credit calculated? Cash Basis Taxpayer And Employee Retention Credit
Eligibility Evaluation: These business will examine your organization’s eligibility for the ERC based on factors such as your market, profits, and operations. If you satisfy the requirements for the credit and recognize the maximum credit amount you can declare, they can assist figure out.
Paperwork and Estimation: ERC filing services will assist in gathering the needed documents, such as payroll records and financial statements, to support your claim. They will likewise help determine the credit amount based upon eligible wages and other qualifying costs.
Retroactive Claim Review: If you are eligible to declare the ERC for previous quarters, these business can review your past payroll records and financials to determine prospective chances for retroactive credits. They can assist you modify prior tax returns to claim these refunds.
Filing Help: Companies focusing on ERC filings will prepare and submit the needed forms and documentation on your behalf. This includes finishing Kind 941 or any other required tax forms.
Compliance and Updates: ERC regulations and guidance have actually progressed over time. These companies remain upgraded with the latest modifications and guarantee that your filings comply with the most existing guidelines. If the IRS demands extra info or conducts an audit associated to your ERC claim, they can likewise supply continuous assistance.
It is essential to research and veterinarian any company offering ERC filing support to ensure their reliability and proficiency. Search for recognized companies with experience in tax and payroll services, or think about reaching out to relied on accounting companies or tax experts who provide ERC filing support.
Remember that while these business can offer important help, it’s always a good idea to have a standard understanding of the ERC requirements and procedure yourself. This will assist you make informed choices and ensure precise filings.
The Worker Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief measures. The goal of the ERC is to motivate companies to keep and pay their workers during the pandemic, even if their operations have been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to eligible companies, consisting of for-profit companies, tax-exempt organizations, and certain governmental entities. To qualify, companies need to fulfill one of two requirements:.
The business operations were fully or partially suspended due to a federal government order related to COVID-19.
Business experienced a substantial decrease in gross invoices. As pointed out previously, for 2021, a significant decline is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019, or a 20% decrease in gross invoices compared to the immediately preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit amount is equal to a percentage (approximately 70%) of certified earnings paid to workers, including certain health plan 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: Initially, services that got an Income Defense Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 enables organizations to claim the ERC even if they got a PPP loan. The same salaries can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and boosted, allowing eligible companies to claim the credit for certified wages paid as far back as March 13, 2020. This retroactive arrangement supplies a chance for companies to change prior-year tax returns and get refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their employment tax returns, usually Type 941. If the credit exceeds the amount of work taxes owed, the excess can be refunded to the employer.
It is necessary to keep in mind that the ERC arrangements and eligibility criteria have actually evolved over time. The best strategy is to consult with a tax expert or go to the official IRS site for the most in-depth and current information concerning the ERC, consisting of any recent legislative changes or updates.
To get approved for the ERC, a service should satisfy among the following criteria:.
Business operations were totally or partially suspended due to a federal government order related to COVID-19.
Business experienced a significant decrease in gross receipts. For 2021, a considerable decline is defined as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decline 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.
The ERC is offered to services of all sizes, consisting of tax-exempt companies, but there are some exceptions. Government entities and businesses that got a PPP loan might have constraints on declaring the credit.
The process for claiming the ERC involves finishing the needed types and consisting of the credit on your work income tax return (typically Form 941). The exact time it takes to process the credit can vary based on numerous elements, consisting of the intricacy of your organization and the workload of the IRS. It’s advised to seek advice from a tax expert for guidance specific to your situation.
There are numerous business that can aid with the procedure of declaring the ERC. These include accounting firms, tax advisory services, and payroll company. Some popular companies that offer help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research and call these companies straight to inquire about their costs and services.
Please note that the information offered here is based on general understanding and may not show the most current updates or changes to the ERC. It’s important to consult with a tax expert or check out the official IRS website for the most accurate and up-to-date details relating to eligibility, declaring procedures, and offered assistance.
Less than 100. The credit is based if the employer had 100 or fewer workers on average in 2019.
on incomes paid to all workers whether they in fact worked or not. In other words, even if the.
workers worked full time and got paid for full-time work, the employer still gets the credit.
Greater than 100. If the company had more than 100 staff members on average in 2019, then the credit is.
enabled just for wages paid to workers who did not work throughout the calendar quarter.
In both cases, “incomes” consists of not simply cash payments but likewise a part of the cost of employer.
offered health care. Cash Basis Taxpayer And Employee Retention Credit
Companies can be instantly repaid for the credit by minimizing the quantity of payroll taxes they.