Lets talk first about Covid-19 Payroll Tax Deferral And Employee Retention Credit :
Our team here what do these people doing everyone in this space is helping teach people about ERC and uh always offer a lovely breakfast and have individuals truly discover the program we should head to the space where we have the ability 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 millions of dollars literally Kevin hundreds of millions of dollars so these are duplicate copies of the letters that go to clients confirming that the check is on the way I imply you understand if you simply start to take a look at a few of these here I indicate this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s simply I mean consider how many real 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 verified and the check is on the mail in the mail from the IRS heading to the customer so that’s how you’re able to track it you know when you
receive this you understand the check is opted for sure which’s when they pay so they don’t pay anything up until they actually receive the cash they don’t pay bottom line Wonder trust anything up until this letter is confirmed the check is on the way they transfer it into their bank account and they can genuinely rely on Wonder trust that the procedure has been completed and the number of you think you have actually processed given that you began this we’re about 35 000 of these for
about 6 billion dollars wow so clearly 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 one of these that’s what matters all right Mr Wonderful here you’re at my YouTube channel we’re talking about something really important today the employee retention credit which the majority of you have actually never ever become aware of I certainly had not heard of it until very just recently and found out a lot about it due to the fact that this is probably the most affordable expense of capital for any small business anywhere
anytime if you have employees in 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 not easy this isn’t like PPP we simply call your bank manager and say offer me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to tell us all 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 going away very soon you got to learn everything about it let’s talk employee retention credit Josh Fox what is an ERC let’s just start there so throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act provided services three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everyone it makes a huge distinction right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the money cash payroll tax refund alright go on sorry I just have to make sure we got that point I imply that’s a huge distinction a loan versus money money I like cash money that’s what we’re speaking about all right 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 tough check in the mail where you get real cash from the internal revenue service all right so let’s talk about how it works since it seems like to me if it’s a if it’s worker retention credit that person had to be a worker so I’m going to make the Presumption this money is not for the owner not for people on the cap table not for shareholders it’s for staff members right you needed to have actually owned a service but it’s based upon you having W-2 workers 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 qualified so you have to be on payroll in 2020 on the W-2 and you have to be on payroll for the very first 6 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 four of 2020 and you had quarters one two and 3 of 2021. all right 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 cash how much can you get back 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 worker’s wage to an optimum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers increased to 70 of the worker’s salary to a maximum of seven thousand per quarter how did that happen um they just 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 staff members on payroll 100 so if you can get 5 000 per person Max in twenty that was 50 in 2020 as much as 5 thousand Max and then what takes place 21 000 Max in 2021 oh that’s how you develop twenty 6 thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per staff member that is since that’s a great deal of cash it is now there’s a caveat here the PPP money would have to be reduced from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would lower the 26 000 so what we’re seeing on average Kevin is if you took PPP money somewhere around 10 thousand dollars an individual so let’s say hypothetically you owned a dining establishment in New york city City where I’m from and you had a hundred staff members and you took PPP money you would still get a million dollar in the mail from the IRS so it’s substantial clearly now the huge question is why does nobody understand about this since look when I initially found out about this when I first satisfied Josh you understand I’ve got great deals of financial investments in lots of companies I’m a major supporter for entrepreneurship in America and make numerous numerous financial investments in entrepreneurs of which lots of suffered through the pandemic when I first heard about this I called BS I do not think 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 deserved and we utilized them wisely to stay alive during the pandemic so when I heard about this I stated nah it can’t be true however when I dug around I even contacted us to my political leader buddies Governor Senators they didn’t learn about it I suggest that’s how you know that’s how misinformation is that there’s no info out there then a bunch of individuals informed me well you can’t get it because you took the PPP also not real so let’s ask Josh why does nobody know about the staff member retention credit you understand what’s interesting you’re talking about the banks Kevin since in the PPP loan process the federal government made it very clear that if you wanted a PPP loan you would call Wells Fargo Citibank Bank of America any of the big 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 simply procedure process that’s all um and here there was chaos because keep in mind in the original cares act you could refrain from doing both programs so if you had done PPP you might refrain from doing ERC in the initial program and when they changed the law in 2021 the banks were refraining from doing ERC due to the fact that 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 actually she or he’s never done it in the past do the banks do it nope the banks do not do it the payroll business yeah some of them are doing it as a payroll business your accounting professional no your accountant’s never ever done this prior to unless you have an account that went into this organization and bottom line my firm Kevin has been in business considering that 2009 and we have actually been dealing with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 companies so a lot of our huge huge corporate customers have worked with bottom line to recuperate other government programs we have actually done sales tax and utilize tax joblessness tax work chance tax credits research and development tax credits unclaimed property property tax all of these other federal government programs.
The staff member retention tax credit is a broad based refundable tax credit created to encourage.
employers to keep workers on their payroll. The credit is 50% of up to $10,000 in earnings paid by an.
Because of COVID-19 or whose gross invoices, employer whose service is fully or partly suspended.
decline by more than 50%.
1. The credit is offered to all employers no matter size including tax exempt organizations. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
businesses who take Small company Loans.
2. To certify, the employer needs to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s service is completely or partially 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.
company’s gross invoices go above 80% of an equivalent quarter in 2019 they no longer qualify.
after completion of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the qualifying incomes paid up to $10,000 in overall.
It is effective for earnings paid after March 13th and before December 31, 2020.
The meaning of qualifying incomes varies by whether a company had, typically, more or less than.
100 workers in 2019.
Companies that specialize in ERC filing help usually supply competence and support to assist companies navigate the complex process of declaring the credit. They can use numerous services, including:.
How is the employee retention credit calculated? Covid-19 Payroll Tax Deferral And Employee Retention Credit
Eligibility Assessment: These business will assess your business’s eligibility for the ERC based on factors such as your industry, revenue, and operations. They can help figure out if you satisfy the requirements for the credit and recognize the optimum credit amount you can declare.
Documentation and Computation: ERC filing services will help in gathering the required paperwork, such as payroll records and monetary statements, to support your claim. They will also help calculate the credit quantity based upon qualified incomes and other qualifying expenses.
Retroactive Claim Review: If you are qualified to claim the ERC for previous quarters, these companies can review your previous payroll records and financials to identify possible opportunities for retroactive credits. They can assist you modify previous tax returns to claim these refunds.
Filing Help: Companies concentrating on ERC filings will prepare and submit the essential kinds and paperwork on your behalf. This includes finishing Form 941 or any other required tax forms.
Compliance and Updates: ERC guidelines and guidance have actually evolved gradually. These business stay updated with the most recent changes and make sure that your filings abide by the most existing guidelines. They can also supply ongoing support if the internal revenue service demands extra information or carries out an audit related to your ERC claim.
It is necessary to research study and veterinarian any company offering ERC filing support to ensure their credibility and knowledge. Look for established companies with experience in tax and payroll services, or think about connecting to trusted accounting companies or tax professionals who use ERC submitting support.
Bear in mind that while these business can provide valuable help, it’s always a good idea to have a basic understanding of the ERC requirements and process yourself. This will help you make informed choices 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 objective of the ERC is to motivate companies to maintain and pay their employees throughout the pandemic, even if their operations have been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to qualified employers, consisting of for-profit organizations, tax-exempt companies, and particular governmental entities. To qualify, employers must meet one of two requirements:.
Business operations were fully or partially suspended due to a government order related to COVID-19.
The business experienced a considerable decline in gross receipts. As mentioned previously, for 2021, a significant decrease is defined as a 20% decrease in gross invoices compared to the exact 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% decline 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 quantity amounts to a portion (up to 70%) of certified wages paid to staff members, consisting of specific health plan expenditures. The optimum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, companies that received a Paycheck Security Program (PPP) loan were not eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 permits organizations to declare the ERC even if they got a PPP loan. The same salaries can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively broadened and improved, permitting qualified companies to claim the credit for qualified wages paid as far back as March 13, 2020. This retroactive provision provides an opportunity for companies to modify prior-year income tax return and receive refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their employment tax returns, generally Type 941. If the credit exceeds the amount of work taxes owed, the excess can be reimbursed to the employer.
It is essential to keep in mind that the ERC arrangements and eligibility requirements have actually progressed gradually. The very best course of action is to seek advice from a tax professional or check out the main IRS site for the most up-to-date and in-depth info concerning the ERC, including any current legal changes or updates.
To receive the ERC, a company must meet among the following criteria:.
Business operations were fully or partly 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 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% decline in gross invoices compared to the very same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
The ERC is readily available to companies of all sizes, including tax-exempt companies, however there are some exceptions. Federal government entities and businesses that got a PPP loan may have restrictions on declaring the credit.
The process for declaring the ERC includes completing the needed types and consisting of the credit on your work tax return (usually Form 941). The exact time it requires to process the credit can differ based on several elements, including the intricacy of your service and the workload of the IRS. It’s suggested to speak with a tax expert for assistance particular to your circumstance.
There are numerous business that can aid with the procedure of claiming the ERC. These consist of accounting companies, tax advisory services, and payroll service providers. Some widely known business that use assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research study and get in touch with these companies straight to ask about their costs and services.
Please keep in mind that the information supplied here is based upon general understanding and might not show the most current updates or changes to the ERC. It’s important to seek advice from a tax professional or check out the official internal revenue service website for the most accurate and current info regarding eligibility, claiming procedures, and readily available support.
Less than 100. If the employer had 100 or less employees usually in 2019, then the credit is based.
on salaries paid to all employees whether they really worked or not. In other words, even if the.
workers worked full-time and earned money for full time work, the employer still gets the credit.
Greater than 100. The credit is if the company had more than 100 workers on average in 2019.
enabled only for earnings paid to workers who did not work throughout the calendar quarter.
In both cases, “salaries” includes not just cash payments however likewise a portion of the cost of company.
supplied healthcare. Covid-19 Payroll Tax Deferral And Employee Retention Credit
Employers can be instantly compensated for the credit by lowering the amount of payroll taxes they.