Lets talk first about Changes To The Employee Retention Credit :
Our team here what do these guys doing everybody in this room is assisting teach individuals about ERC and uh constantly offer a beautiful breakfast and have individuals actually learn about the program we need to head to the space where we are able to display a few of the checks that we are getting for companies and I want to see that what is this this is uh numerous 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 imply you know if you just start to look at some 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 simply I imply 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 verified 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’re able 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 till they actually receive the money they don’t pay bottom line Wonder trust anything till this letter is verified the check is on the method they deposit it into their savings account and they can really rely on Wonder trust that the process has actually been completed and how many you think you have actually processed considering that you began this we have to do with 35 000 of these for
about six billion dollars wow so plainly they understand what they’re doing which’s what you require you require experts 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 Terrific here you’re at my YouTube channel we’re discussing something really important today the employee retention credit which most of you have actually never ever become aware of I definitely had not become aware of it until very recently and discovered a lot about it because this is most likely the lowest cost of capital for any small business anywhere
anytime if you have workers between 5 and five hundred so I have actually got the expert with me this is Josh Fox he’s the founder and CEO of bottom line Concepts they’re the largest processor of these ERC credits this is a 170 page program so it’s difficult this isn’t like PPP we simply phone your bank manager and say give 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 ended up being yes the Ambassador and paid representative for this I love this program it’s going away very soon you got to find out all about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply begin there so during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act used companies 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody 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 cash cash payroll tax refund okay go on sorry I simply need to make sure we got that point I suggest that’s a huge difference a loan versus money money I like cash cash that’s what we’re talking about 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 stunning hard check in the mail where you get real cash from the IRS 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 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 individuals on the cap table not for investors it’s for staff members right you needed to have actually owned a business however it’s based upon you having W-2 employees in America not 10.99. 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 have to be on payroll for the first six months of 2021 on the W-2 correct so there were 6 quarters the program was open well walk us through the 6 quarters so you had quarters 2 three and 4 of 2020 and you had quarters one 2 and three of 2021. fine so that’s how it’s determined you have to be on the W-2 throughout that period now let’s talk my preferred part money just how much can you return per staff member that was on a W-2 in those six quarters so the computation in 2020 to be specific Kevin is 50 of the staff member’s wage to a maximum of 5 thousand dollars per staff member for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the worker’s income to a maximum of seven thousand per quarter how did that occur um they just changed the rules in.
2021 versus since the chaos 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 as much as five thousand Max and then what happens 21 000 Max in 2021 oh that’s how you develop 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 because that’s a great deal of money it is now there’s a caution here the PPP money would have to be reduced from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would minimize the 26 000 so what we’re seeing on average Kevin is if you took PPP cash somewhere around ten thousand dollars an individual so let’s state hypothetically you owned a restaurant in New York 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 big undoubtedly now the big concern is why does nobody understand about this because look when I first found out about this when I first met Josh you know I have actually got great deals of investments in lots of business I’m a significant advocate for entrepreneurship in America and make numerous numerous 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 very easy to do we had our CEOs call the banks they got their loans which were well deserved and we used them wisely to stay alive during the pandemic so when I became aware of this I said nah it can’t be true however when I dug around I even contacted us to my politician buddies Governor Senators they didn’t understand about it I indicate that’s how you understand that’s how misinformation is that there’s no info out there then a bunch 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 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 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 process that’s all um and here there was chaos due to the fact that remember in the original cares act you might refrain from doing both programs so if you had actually done PPP you could not do ERC in the original program and when they changed 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 government never made it clear to anyone about how to.
do this does your CFO know how to do this not truly he or she’s never done it before 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 accounting professional no your accounting professional’s never done this prior to unless you have an account that entered into this company and bottom line my company Kevin has actually been in business given that 2009 and we have actually 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 big business clients have worked with bottom line to recover other federal government programs we’ve done sales tax and use tax joblessness tax work opportunity tax credits research and development tax credits unclaimed home property tax all of these other federal government programs.
The staff member retention tax credit is a broad based refundable tax credit created to motivate.
employers to keep staff members on their payroll. The credit is 50% of as much as $10,000 in salaries paid by an.
Because of COVID-19 or whose gross receipts, employer whose service is completely or partly suspended.
decline by more than 50%.
1. The credit is readily available to all employers no matter size consisting of tax exempt organizations. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) small.
organizations who take Small company Loans.
2. To certify, the employer needs to satisfy one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s organization is fully 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 equivalent quarter in 2019. As soon as the.
company’s gross receipts go above 80% of an equivalent quarter in 2019 they no longer qualify.
after the end of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the qualifying salaries paid up to $10,000 in overall.
It is effective for salaries paid after March 13th and prior to December 31, 2020.
The definition of certifying salaries varies by whether an employer had, usually, basically than.
100 workers in 2019.
Business that focus on ERC filing support typically offer competence and assistance to help organizations navigate the complex process of claiming the credit. They can provide numerous services, including:.
How is the employee retention credit calculated? Changes To The Employee Retention Credit
Eligibility Evaluation: These companies will evaluate your company’s eligibility for the ERC based on aspects such as your industry, revenue, and operations. If you satisfy the requirements for the credit and determine the optimum credit amount you can claim, they can help figure out.
Documents and Computation: ERC filing services will assist in gathering the needed paperwork, such as payroll records and monetary declarations, to support your claim. They will likewise assist calculate the credit quantity based on eligible incomes and other certifying expenditures.
Retroactive Claim Review: If you are qualified to claim the ERC for previous quarters, these business can review your previous payroll records and financials to identify possible chances for retroactive credits. They can assist you amend prior income tax return to declare these refunds.
Filing Assistance: Business specializing in ERC filings will prepare and submit the required types and documents on your behalf. This consists of completing Form 941 or any other necessary tax forms.
Compliance and Updates: ERC policies and assistance have evolved with time. These companies stay upgraded with the most recent changes and ensure that your filings abide by the most current standards. They can also provide continuous assistance if the IRS demands additional info or conducts an audit related to your ERC claim.
It is essential to research and vet any company using ERC filing help to guarantee their reliability and know-how. Try to find established companies with experience in tax and payroll services, or think about reaching out to trusted accounting firms or tax professionals who use ERC submitting assistance.
Keep in mind that while these companies can offer valuable help, it’s constantly a good concept to have a basic understanding of the ERC requirements and process 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. federal government as part of COVID-19 relief steps. The objective of the ERC is to motivate organizations to keep and pay their workers during the pandemic, even if their operations have actually been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to eligible companies, including for-profit services, tax-exempt companies, and specific governmental entities. To certify, companies must meet one of two criteria:.
Business operations were fully or partially suspended due to a government order related to COVID-19.
Business experienced a substantial decline in gross receipts. As pointed out previously, for 2021, a substantial decline is specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the instantly 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 portion (up to 70%) of qualified wages paid to staff members, including specific health insurance costs. The optimum credit per staff member is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, businesses that received an Income Protection Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 allows organizations to declare the ERC even if they received a PPP loan. The same incomes can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and enhanced, allowing qualified employers to claim the credit for qualified earnings paid as far back as March 13, 2020. This retroactive provision supplies an opportunity for companies to modify prior-year tax returns and receive refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their employment tax returns, normally Type 941. If the credit exceeds the amount of work taxes owed, the excess can be refunded to the employer.
It is essential to keep in mind that the ERC provisions and eligibility requirements have actually developed with time. The very best strategy is to consult with a tax expert or visit the official internal revenue service website for the most updated and in-depth details regarding the ERC, consisting of any recent legal changes or updates.
To qualify for the ERC, an organization needs to satisfy one of the following requirements:.
The business operations were completely or partially suspended due to a federal government order related to COVID-19.
Business experienced a significant decrease in gross invoices. For 2021, a substantial decrease is specified as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a substantial 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 immediately preceding quarter.
The ERC is readily available to companies of all sizes, consisting of tax-exempt organizations, however there are some exceptions. Federal government entities and businesses that got a PPP loan might have constraints on declaring the credit.
The process for declaring the ERC includes completing the essential kinds and including the credit on your work income tax return (normally Kind 941). The exact time it requires to process the credit can differ based upon several factors, including the intricacy of your organization and the workload of the internal revenue service. It’s advised to speak with a tax expert for guidance particular to your scenario.
There are a number of companies that can assist with the procedure of claiming the ERC. These include accounting firms, tax advisory services, and payroll service providers. Some well-known companies that offer assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research and get in touch with these companies straight to ask about their services and costs.
Please keep in mind that the info provided here is based upon general knowledge and might not show the most recent updates or modifications to the ERC. It is very important to speak with a tax expert or go to the official internal revenue service site for the most precise and up-to-date information concerning eligibility, claiming treatments, and readily available assistance.
Less than 100. If the company had 100 or less staff members typically in 2019, then the credit is based.
on earnings paid to all workers whether they really worked or not. Simply put, even if the.
staff members worked full time and made money for full time work, the company still gets the credit.
Greater than 100. The credit is if the employer had more than 100 staff members on average in 2019.
allowed just for incomes paid to employees who did not work throughout the calendar quarter.
In both cases, “wages” consists of not just money payments but also a part of the expense of employer.
supplied healthcare. Changes To The Employee Retention Credit
Companies can be immediately reimbursed for the credit by minimizing the quantity of payroll taxes they.