Lets talk first about Employee Retention Credit 1St Quarter 2020 :
Our team here what do these guys doing everybody in this space is assisting teach individuals about ERC and uh constantly supply a beautiful breakfast and have people actually learn more about the program we ought to head to the space where we are able to display some of the checks that we are getting for companies and I ‘d like to see that what is this this is uh hundreds of countless dollars actually Kevin hundreds of countless dollars so these are duplicate copies of the letters that go to clients validating that the check is on the way I indicate you understand if you just start to look at some of these here I imply this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I mean it’s just I suggest consider 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 confirmed the numbers are confirmed 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 understand when you
receive this you understand the check is opted for sure and that’s when they pay so they do not pay anything up until they in fact get the cash 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 checking account and they can truly rely on Wonder trust that the process has actually been finished and the number of you think you’ve processed because you started this we have to do with 35 000 of these for
about six billion dollars wow so plainly they know 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 among these that’s what matters all right Mr Fantastic here you’re at my YouTube channel we’re discussing something truly crucial today the employee retention credit which most of you have actually never ever heard of I certainly had not become aware of it up until very just recently and learned a lot about it because this is most likely the lowest cost of capital for any small business anywhere
anytime if you have employees between 5 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 challenging this isn’t like PPP we simply contact your bank supervisor and say provide 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’ve become yes the Ambassador and paid representative for this I enjoy this program it’s going away soon you got to find out all about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply start there so throughout the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act provided businesses 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody 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 all right go on sorry I simply have to make certain we got that point I mean that’s a big difference a loan versus money money I like cash money that’s what we’re speaking about 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 lovely difficult 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 worker retention credit that individual needed to be a worker so I’m going to make the Assumption this money 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 a business but it’s based upon you having W-2 employees 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 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 stroll us through the six quarters so you had quarters 2 three and 4 of 2020 and you had quarters one 2 and three of 2021. okay so that’s how it’s determined you have to be on the W-2 during that period now let’s talk my favorite part cash just how much can you return per employee that was on a W-2 in those 6 quarters so the computation in 2020 to be exact Kevin is 50 of the employee’s wage to an optimum of 5 thousand dollars per staff member for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s wage to a maximum of seven thousand per quarter how did that take place um they simply altered the rules in.
2021 versus because the mayhem of the pandemic so they wished 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 approximately five thousand Max and then what takes place 21 000 Max in 2021 oh that’s how you come up with twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty 6 thousand dollars per employee that is since that’s a lot of money it is now there’s a caution here the PPP money would need to be minimized from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would lower the 26 000 so what we’re seeing usually Kevin is if you took PPP money somewhere around 10 thousand dollars a person 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 money you would still get a million dollar in the mail from the internal revenue service so it’s big clearly now the big concern is why does nobody learn about this due to the fact that look when I first heard about this when I initially satisfied Josh you know I’ve got lots of financial investments in great deals of business I’m a significant supporter for entrepreneurship in America and make numerous many financial investments in entrepreneurs of which numerous suffered through the pandemic when I initially became aware of this I called BS I do not believe it because I utilize 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 been worthy of and we utilized them carefully to survive throughout the pandemic so when I heard about this I said nah it can’t be true but when I dug around I even contacted us to my politician pals Guv Senators they didn’t learn about it I suggest that’s how you know that’s how false information is that there’s no information out there then a bunch of individuals told me well you can’t get it since you took the PPP also not true so let’s ask Josh why does nobody learn about the employee retention credit you know what’s interesting you’re speaking 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 process procedure that’s all um and here there was turmoil due to the fact that keep in mind in the initial cares act you might refrain from doing both programs so if you had done PPP you could refrain from doing ERC in the initial program and when they changed the law in 2021 the banks were not doing ERC since 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 know how to do this not really he or she’s never done it before do the banks do it nope the banks don’t 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 ever done this before unless you have an account that entered into this organization and bottom line my firm Kevin has stayed in business considering that 2009 and we have actually been dealing with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 companies so a great deal of our big big corporate clients have worked with bottom line to recover other federal government programs we have actually done sales tax and use tax unemployment tax work opportunity tax credits research and development tax credits unclaimed home real estate tax all of these other government programs.
The staff member retention tax credit is a broad based refundable tax credit designed to encourage.
companies to keep employees on their payroll. The credit is 50% of up to $10,000 in earnings paid by an.
Because of COVID-19 or whose gross receipts, employer whose service is fully or partly suspended.
decrease by more than 50%.
1. The credit is available to all companies regardless of size consisting of tax exempt organizations. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
businesses who take Small Business Loans.
2. To qualify, the employer has to meet one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s organization is totally or partially suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are listed below 50% of the similar quarter in 2019. Once the.
company’s gross receipts go above 80% of a comparable 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 certifying wages paid up to $10,000 in overall.
It works for earnings paid after March 13th and prior to December 31, 2020.
The meaning of qualifying wages varies by whether an employer had, usually, basically than.
100 employees in 2019.
Business that focus on ERC filing help generally supply knowledge and support to help businesses browse the complex process of declaring the credit. They can provide numerous services, including:.
How is the employee retention credit calculated? Employee Retention Credit 1St Quarter 2020
Eligibility Assessment: These business will assess your organization’s eligibility for the ERC based on aspects such as your market, earnings, and operations. They can assist determine if you satisfy the requirements for the credit and recognize the maximum credit quantity you can claim.
Documents and Calculation: ERC filing services will help in gathering the required documents, such as payroll records and monetary statements, to support your claim. They will likewise assist compute the credit amount based upon qualified incomes and other qualifying expenses.
Retroactive Claim Review: If you are eligible to claim the ERC for prior quarters, these business can examine your previous payroll records and financials to recognize potential chances for retroactive credits. They can help you amend previous income tax return to declare these refunds.
Filing Help: Business focusing on ERC filings will prepare and submit the required forms and documentation in your place. This consists of finishing Form 941 or any other necessary tax return.
Compliance and Updates: ERC regulations and assistance have developed in time. These business remain updated with the current changes and guarantee that your filings adhere to the most existing standards. They can also provide ongoing assistance if the internal revenue service demands additional details or carries out an audit related to your ERC claim.
It is very important to research and vet any business offering ERC filing support to guarantee their reliability and competence. Look for established companies with experience in tax and payroll services, or think about connecting to relied on accounting companies or tax professionals who provide ERC submitting assistance.
Remember that while these companies can supply valuable help, it’s constantly a great idea to have a standard understanding of the ERC requirements and process yourself. This will help you make notified decisions and guarantee accurate filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief measures. The goal of the ERC is to encourage companies to maintain and pay their workers during the pandemic, even if their operations have actually been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to eligible employers, including for-profit organizations, tax-exempt companies, and particular governmental entities. To certify, employers must meet one of two requirements:.
The business operations were totally or partially 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 significant decline is specified as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
Credit Amount: 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 certified earnings paid to workers, consisting of specific health insurance costs. The maximum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, services that got a Paycheck Protection Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 allows companies to declare the ERC even if they received a PPP loan. 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 improved, permitting qualified companies to claim the credit for certified incomes paid as far back as March 13, 2020. This retroactive provision offers a chance for services to amend prior-year income tax return and get refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their work income tax return, generally Form 941. If the credit surpasses the quantity of work taxes owed, the excess can be refunded to the company.
It is necessary to note that the ERC arrangements and eligibility requirements have evolved with time. The very best strategy is to seek advice from a tax expert or go to the main internal revenue service site for the most detailed and current info relating to the ERC, including any current legislative modifications or updates.
To get approved for the ERC, a service should satisfy one of the following criteria:.
The business operations were fully or partially suspended due to a federal government order related to COVID-19.
The business experienced a substantial decline in gross receipts. For 2021, a substantial decline is specified as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019, or a 20% decrease in gross invoices compared to the immediately preceding quarter.
The ERC is readily available to organizations of all sizes, including tax-exempt companies, however there are some exceptions. Federal government entities and businesses that received a PPP loan may have constraints on declaring the credit.
The process for declaring the ERC involves finishing the required kinds and including the credit on your work income tax return (typically Type 941). The exact time it takes to process the credit can differ based on several aspects, including the intricacy of your company and the workload of the IRS. It’s advised to seek advice from a tax professional for guidance particular to your situation.
There are a number of companies that can assist with the procedure of declaring the ERC. Some well-known business that provide support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the information offered here is based upon general knowledge and may not show the most current updates or changes to the ERC. It is necessary to seek advice from a tax expert or visit the main internal revenue service website for the most precise and up-to-date info concerning eligibility, declaring procedures, and available help.
Less than 100. The credit is based if the employer had 100 or fewer staff members on average in 2019.
on salaries paid to all workers whether they actually 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. The credit is if the employer had more than 100 workers on average in 2019.
permitted only for incomes paid to workers who did not work throughout the calendar quarter.
In both cases, “salaries” includes not just money payments however also a portion of the cost of employer.
provided healthcare. Employee Retention Credit 1St Quarter 2020
Companies can be immediately reimbursed for the credit by minimizing the amount of payroll taxes they.