Lets talk first about Employee Retention Credit Bookkeeping :
Our team here what do these guys doing everyone in this room is helping teach individuals about ERC and uh always supply a gorgeous breakfast and have people actually learn more about the program we ought to head to the room where we are able to show a few of the checks that we are getting for business and I wish to see that what is this this is uh numerous countless dollars actually Kevin hundreds of countless dollars so these are replicate copies of the letters that go to customers confirming that the check is on the method I indicate you understand if you just 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 just I suggest consider 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 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’re able to track it you know when you
get this you understand the check is chosen sure which’s when they pay so they don’t pay anything till 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 really rely on Wonder trust that the procedure has actually been ended up and the number of you think you’ve processed since 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 and that’s what you need 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 Fantastic here you’re at my YouTube channel we’re talking about something really essential today the staff member retention credit which most of you have never ever become aware of I certainly hadn’t become aware of it until very recently and learned a lot about it since this is probably the lowest expense of capital for any small business anywhere
anytime if you have workers in between five and five hundred so I’ve got the professional with me this is Josh Fox he’s the creator and CEO of bottom line Concepts they’re the largest processor of these ERC credits this is a 170 page program so it’s hard this isn’t like PPP we just call your bank manager and state provide me a loan it does not 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 like this program it’s going away very soon you got to discover all about it let’s talk worker retention credit Josh Fox what is an ERC let’s just start there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act used services three 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 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the cash cash payroll tax refund fine go on sorry I just need to make sure we got that point I indicate that’s a big difference a loan versus money cash I like cash cash 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 initial cares Act is the ERC and yes Kevin it is a beautiful hard check in the mail where you get actual cash from the IRS all right so let’s discuss how it works since it seems 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 workers right you needed to have owned an organization however it’s based upon 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 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 six months of 2021 on the W-2 right so there were six quarters the program was open well walk us through the 6 quarters so you had quarters two 3 and 4 of 2020 and you had quarters one 2 and 3 of 2021. all right so that’s how it’s measured you need to be on the W-2 throughout that duration now let’s talk my favorite part cash just how much can you get back per staff member that was on a W-2 in those 6 quarters so the calculation in 2020 to be precise Kevin is 50 of the employee’s wage to a maximum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers increased to 70 of the staff member’s wage to an optimum of seven thousand per quarter how did that take place um they simply altered the rules in.
2021 versus since the mayhem of the pandemic so they wanted 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 five 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 5 thousand in twenty twenty that’s twenty six thousand dollars per employee 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 decreased from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would lower 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 say hypothetically you owned a restaurant in New york city 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 huge clearly now the huge concern is why does nobody know about this due to the fact that look when I first found out about this when I initially met Josh you understand I have actually got lots of financial investments in lots of business I’m a significant advocate for entrepreneurship in America and make numerous many financial investments in business owners of which numerous suffered through the pandemic when I initially found out about this I called BS I do not think it due to the fact that 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 and that were well should have and we utilized them sensibly to survive during the pandemic so when I heard about this I stated nah it can’t hold true but when I dug around I even contacted us to my political leader good friends Governor Senators they didn’t understand about it I mean that’s how you know 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 since you took the PPP likewise not real so let’s ask Josh why does nobody learn about the worker retention credit you understand what’s fascinating you’re discussing the banks Kevin due to the fact that in the PPP loan procedure the federal government made it very clear that if you desired a PPP loan you would call Wells Fargo Citibank Bank of America any of the huge banks in our country and they would process procedure 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 mayhem due to the fact that remember in the initial cares act you might not do 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 not doing ERC since it’s not alone so you’re getting a tax refund so the federal government never ever made it clear to any person about how to.
do this does your CFO know how to do this not actually she or he’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 accountant no your accountant’s never done this before unless you have an account that went into this company and bottom line my firm Kevin has stayed in business considering that 2009 and we’ve been working with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 companies so a lot of our big big business clients have dealt with bottom line to recover other government programs we have actually done sales tax and use 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 designed to encourage.
employers to keep workers on their payroll. The credit is 50% of approximately $10,000 in wages paid by an.
Since of COVID-19 or whose gross invoices, company whose business is fully or partially suspended.
decline by more than 50%.
1. The credit is available to all employers despite size consisting of tax exempt organizations. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) small.
businesses who take Small Business Loans.
2. To certify, the employer has to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s service is completely or partially suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross invoices are listed below 50% of the comparable quarter in 2019. Once the.
company’s gross invoices go above 80% of an equivalent quarter in 2019 they no longer certify.
after the end of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the qualifying earnings paid up to $10,000 in overall.
It is effective for earnings paid after March 13th and prior to December 31, 2020.
The definition of qualifying incomes varies by whether an employer had, usually, more or less than.
100 staff members in 2019.
Business that focus on ERC filing assistance generally offer knowledge and assistance to assist companies browse the complex process of claiming the credit. They can use numerous services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Bookkeeping
Eligibility Evaluation: These companies will assess your business’s eligibility for the ERC based on elements such as your market, income, and operations. They can assist determine if you satisfy the requirements for the credit and recognize the maximum credit amount you can claim.
Documents and Computation: ERC filing services will assist in gathering the necessary documentation, such as payroll records and financial statements, to support your claim. They will likewise assist calculate the credit amount based upon qualified salaries and other certifying expenditures.
Retroactive Claim Review: If you are qualified to claim the ERC for previous quarters, these companies can review your past payroll records and financials to identify prospective chances for retroactive credits. They can assist you amend prior income tax return to claim these refunds.
Filing Assistance: Companies focusing on ERC filings will prepare and submit the required kinds and paperwork on your behalf. This includes finishing Type 941 or any other required tax return.
Compliance and Updates: ERC policies and assistance have actually progressed with time. These companies stay updated with the most recent modifications and guarantee that your filings abide by the most existing standards. They can likewise offer continuous assistance if the IRS demands extra info or conducts an audit related to your ERC claim.
It is necessary to research study and vet any company providing ERC filing assistance to ensure their reliability and knowledge. Look for recognized firms with experience in tax and payroll services, or consider reaching out to trusted accounting firms or tax professionals who offer ERC filing assistance.
Keep in mind that while these business can provide important support, it’s constantly an excellent concept to have a basic understanding of the ERC requirements and procedure yourself. This will assist you make notified choices and make sure 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 steps. The goal of the ERC is to encourage companies to retain and pay their workers during the pandemic, even if their operations have actually been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to qualified companies, consisting of for-profit services, tax-exempt companies, and particular governmental entities. To qualify, companies must meet one of two requirements:.
The business operations were fully or partly suspended due to a federal government order related to COVID-19.
The business experienced a considerable decline in gross invoices. As discussed previously, for 2021, a considerable decline is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a substantial decline is specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross receipts compared to the right away preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity amounts to a percentage (approximately 70%) of qualified salaries paid to workers, consisting of particular health plan expenses. 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, companies that got an Income Security Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 enables services to claim the ERC even if they received a PPP loan. The exact same earnings can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively expanded and boosted, permitting eligible employers to declare the credit for certified salaries paid as far back as March 13, 2020. This retroactive provision provides a chance for services to modify prior-year income tax return and get refunds.
Claiming the Credit: Companies can declare the ERC by reporting it on their employment income tax return, typically Type 941. The excess can be reimbursed to the employer if the credit goes beyond the amount of employment taxes owed.
It is essential to keep in mind that the ERC provisions and eligibility requirements have developed over time. The best strategy is to seek advice from a tax professional or check out the main IRS website for the most detailed and up-to-date info relating to the ERC, including any current legal modifications or updates.
To get approved for the ERC, an organization needs to fulfill among the following requirements:.
Business operations were completely or partly suspended due to a federal government order related to COVID-19.
Business experienced a substantial decrease in gross invoices. For 2021, a substantial decrease is defined as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
The ERC is offered to businesses of all sizes, consisting of tax-exempt companies, however there are some exceptions. For example, government entities and companies that received a PPP loan may have constraints on claiming the credit.
The process for declaring the ERC involves finishing the required kinds and consisting of the credit on your work income tax return (normally Type 941). The exact time it takes to process the credit can differ based upon numerous factors, consisting of the intricacy of your business and the work of the internal revenue service. It’s suggested to speak with a tax professional for assistance particular to your scenario.
There are several companies that can help with the process of claiming the ERC. Some popular companies that use assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the information offered here is based upon general understanding and may not show the most current updates or changes to the ERC. It is essential to seek advice from a tax professional or go to the main IRS website for the most updated and accurate information relating to eligibility, declaring treatments, and offered assistance.
Less than 100. The credit is based if the employer had 100 or fewer workers on average in 2019.
on earnings paid to all workers whether they really worked or not. Simply put, even if the.
workers worked full-time and got paid for full-time work, the employer still gets the credit.
Greater than 100. The credit is if the company had more than 100 employees on average in 2019.
enabled only for earnings paid to workers who did not work throughout the calendar quarter.
In both cases, “salaries” consists of not simply cash payments however likewise a part of the cost of company.
offered health care. Employee Retention Credit Bookkeeping
Companies can be right away repaid for the credit by decreasing the amount of payroll taxes they.