Lets talk first about Employee Retention Credit Balance Sheet :
Our group here what do these men doing everybody in this space is assisting teach people about ERC and uh constantly provide a stunning breakfast and have people really learn about the program we need to head to the room where we are able to show some of the checks that we are getting for business and I want to see that what is this this is uh numerous millions of dollars actually Kevin hundreds of countless dollars so these are duplicate copies of the letters that go to clients confirming that the check is on the way I suggest you know if you just start 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 indicate it’s simply I indicate consider the number of real customers 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 customer so that’s how you have the ability to track it you know when you
get this you know the check is opted for sure which’s when they pay so they don’t pay anything until they actually get the money they do not pay bottom line Wonder trust anything until this letter is confirmed the check is on the way they deposit it into their savings account and they can really rely on Wonder trust that the procedure has actually been completed and the number of you believe you have actually processed because you began this we have to do with 35 000 of these for
about 6 billion dollars wow so clearly they understand what they’re doing which’s what you need you need 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 Fantastic here you’re at my YouTube channel we’re speaking about something actually crucial today the staff member retention credit which most of you have never ever heard of I certainly hadn’t become aware of it until extremely just recently and found out a lot about it due to the fact that this is most likely the lowest expense of capital for any small company anywhere
anytime if you have staff members between five and five hundred so I have actually got the specialist with me this is Josh Fox he’s the creator and CEO of bottom line Ideas they’re the largest processor of these ERC credits this is a 170 page program so it’s challenging this isn’t like PPP we just call 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 all of us about it and how to get it and why I’ve become yes the Ambassador and paid spokesperson for this I like this program it’s going away soon you got to discover everything about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply start there so during the Trump Administration when President Trump was enacted they created the cares Act and the cares act used businesses 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone it makes a big difference right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the money cash payroll tax refund alright go on sorry I simply have to ensure we got that point I mean that’s a huge difference a loan versus money cash I like cash cash that’s what we’re discussing okay 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 difficult check in the mail where you get real cash from the internal revenue service all right so let’s discuss how it works because it seems like to me if it’s a if it’s employee retention credit that individual needed to be a staff member so I’m going to make the Assumption this cash is not for the owner not for people on the cap table not for shareholders it’s for employees right you had to have actually owned an organization however it’s based on 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 first six 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 3 and four of 2020 and you had quarters one 2 and 3 of 2021. fine so that’s how it’s determined you have to be on the W-2 throughout that duration now let’s talk my favorite part money just how much can you get back per worker that was on a W-2 in those 6 quarters so the calculation in 2020 to be exact Kevin is 50 of the employee’s income to an optimum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the worker’s income to an optimum of seven thousand per quarter how did that take place um they just changed the rules in.
2021 versus because the turmoil 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 up to 5 thousand Max and then what occurs 21 000 Max in 2021 oh that’s how you come up with twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per worker that is because that’s a lot of cash it is now there’s a caveat here the PPP money would have to be minimized from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would minimize the 26 000 so what we’re seeing on average Kevin is if you took PPP cash somewhere 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 workers and you took PPP money you would still get a million dollar in the mail from the IRS so it’s substantial undoubtedly now the huge concern is why does no one understand about this due to the fact that appearance when I first became aware of this when I initially fulfilled Josh you understand I have actually got lots of investments in great deals of companies I’m a significant advocate for entrepreneurship in America and make numerous lots of financial investments in business owners of which many suffered through the pandemic when I first heard about this I called BS I don’t believe it because I utilize the PPP we went through the money 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 used them sensibly to stay alive during the pandemic so when I became aware of this I said nah it can’t hold true but when I dug around I even called to my political leader pals Governor Senators they didn’t understand about it I mean that’s how you know that’s how false information is that there’s no information out there then a lot of people told me well you can’t get it since you took the PPP likewise not real 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 since 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 nation and they would process process in Canada a pre-pp loan there’s no loans in Canada by the way it’s just process process that’s all um and here there was mayhem since remember in the initial cares act you could not do both programs so if you had actually done PPP you could refrain from doing ERC in the initial program and when they altered the law in 2021 the banks were not doing ERC because 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 know how to do this not really she or he’s never ever done it previously do the banks do it nope the banks do not do it the payroll companies yeah a few 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 business and bottom line my company Kevin has actually stayed in business since 2009 and we have actually been dealing with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 business so a great deal of our big big 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 home property tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit developed to encourage.
employers to keep workers on their payroll. The credit is 50% of approximately $10,000 in salaries paid by an.
Due to the fact that of COVID-19 or whose gross receipts, employer whose service is totally or partially suspended.
decrease by more than 50%.
Schedule.
1. The credit is offered to all employers regardless of size including tax exempt companies. There are.
just two exceptions: (1) state and city governments and their instrumentalities and (2) small.
services who take Small Business Loans.
2. To certify, the employer needs to satisfy one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s company is totally or partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the similar 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.
Calculation of the Credit.
The quantity of the credit is 50% of the certifying wages paid up to $10,000 in overall.
It is effective for earnings paid after March 13th and before December 31, 2020.
The definition of certifying earnings differs by whether an employer had, usually, more or less than.
100 staff members in 2019.
Business that concentrate on ERC filing help normally provide competence and assistance to assist organizations navigate the complicated process of claiming the credit. They can provide numerous services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Balance Sheet
Eligibility Evaluation: These companies will assess your organization’s eligibility for the ERC based upon factors such as your market, profits, and operations. If you meet the requirements for the credit and determine the optimum credit quantity you can claim, they can assist figure out.
Documents and Computation: ERC filing services will help in gathering the required documentation, such as payroll records and financial statements, to support your claim. They will also help determine the credit quantity based upon eligible wages and other certifying expenditures.
Retroactive Claim Review: If you are qualified to claim the ERC for prior quarters, these business can review your previous payroll records and financials to identify possible chances for retroactive credits. They can help you change prior income tax return to claim these refunds.
Filing Help: Business focusing on ERC filings will prepare and send the needed types and documentation on your behalf. This includes completing Form 941 or any other required tax forms.
Compliance and Updates: ERC guidelines and assistance have actually evolved over time. These business stay upgraded with the current modifications and guarantee that your filings abide by the most current guidelines. They can likewise offer continuous assistance 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 providing ERC filing assistance to guarantee their reliability and know-how. Try to find recognized firms with experience in tax and payroll services, or consider connecting to relied on accounting companies or tax experts who offer ERC filing assistance.
Bear in mind that while these business can supply valuable assistance, it’s always a great concept to have a basic understanding of the ERC requirements and procedure yourself. This will help you make informed choices and guarantee accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief procedures. The goal of the ERC is to encourage companies to keep and pay their staff members throughout the pandemic, even if their operations have been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to eligible employers, consisting of for-profit businesses, tax-exempt organizations, and specific governmental entities. To certify, employers must meet one of two criteria:.
The business operations were totally or partly suspended due to a government order related to COVID-19.
The business experienced a significant decline in gross invoices. As pointed out earlier, for 2021, a significant decrease is specified as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly 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 (approximately 70%) of certified earnings paid to staff members, including particular 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: Initially, services that received an Income Security Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 enables businesses to claim the ERC even if they received a PPP loan. The very same incomes can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively broadened and improved, enabling eligible companies to declare the credit for certified wages paid as far back as March 13, 2020. This retroactive arrangement provides a chance for businesses to amend prior-year income tax return and get refunds.
Declaring the Credit: Employers can declare the ERC by reporting it on their employment tax returns, normally Type 941. If the credit goes beyond the amount of work taxes owed, the excess can be reimbursed to the company.
It’s important to keep in mind that the ERC arrangements and eligibility requirements have evolved over time. The best strategy is to talk to a tax professional or go to the main IRS website for the most detailed and updated information regarding the ERC, including any current legal modifications or updates.
To get approved for the ERC, an organization should meet one of the following requirements:.
Business operations were totally or partially suspended due to a government order related to COVID-19.
Business experienced a substantial decline in gross invoices. For 2021, a considerable decrease is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decrease is specified as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decrease in gross receipts compared to the right away preceding quarter.
The ERC is offered to businesses of all sizes, including tax-exempt organizations, however there are some exceptions. Government entities and organizations that received a PPP loan may have limitations on declaring the credit.
The process for claiming the ERC includes finishing the necessary kinds and consisting of the credit on your work income tax return (typically Form 941). The exact time it requires to process the credit can vary based upon a number of factors, consisting of the complexity of your organization and the work of the internal revenue service. It’s recommended to speak with a tax expert for guidance specific to your circumstance.
There are a number of companies that can assist with the process of declaring the ERC. Some well-known business that use help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the information supplied here is based upon basic knowledge and might not show the most recent updates or changes to the ERC. It is very important to talk to a tax professional or go to the official IRS website for the most accurate and current details regarding eligibility, declaring treatments, and readily available assistance.
Less than 100. If the employer had 100 or fewer staff members typically in 2019, then the credit is based.
on salaries paid to all workers whether they actually worked or not. To put it simply, even if the.
staff members worked full-time and earned money for full-time work, the employer still gets the credit.
Greater than 100. If the employer had more than 100 employees on average in 2019, then the credit is.
allowed only for salaries paid to staff members who did not work during the calendar quarter.
In both cases, “wages” consists of not just money payments however likewise a part of the expense of employer.
supplied healthcare. Employee Retention Credit Balance Sheet
Payment.
Companies can be instantly repaid for the credit by decreasing the amount of payroll taxes they.