Lets talk first about Employee Retention Credit Economic Security Act :
Our team here what do these people doing everybody in this room is helping teach individuals about ERC and uh always supply a beautiful breakfast and have individuals actually learn more 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 business and I want to see that what is this this is uh hundreds of millions of dollars actually Kevin hundreds of countless dollars so these are duplicate copies of the letters that go to customers validating that the check is on the method I indicate 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 imply it’s just I suggest think of how many real clients that went through the program yeah this is the very end this is the celebration 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 consumer so that’s how you have the ability to track it you understand when you
get this you understand the check is chosen sure and that’s when they pay so they don’t pay anything up until they really get the cash they do not pay bottom line Wonder trust anything up until this letter is confirmed the check is on the way they transfer it into their savings account and they can genuinely rely on Wonder trust that the procedure has been completed and the number of you believe you’ve 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 and that’s what you need you need 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 Wonderful here you’re at my YouTube channel we’re talking about something really essential today the employee retention credit which most of you have never ever heard of I certainly hadn’t become aware of it until really recently and found out a lot about it due to the fact that 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 have actually got the specialist with me this is Josh Fox he’s the founder 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 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 all of us about it and how to get it and why I have actually ended up being yes the Ambassador and paid spokesperson for this I love this program it’s disappearing soon you got to discover everything about it let’s talk employee retention credit Josh Fox what is an ERC let’s just 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 big distinction right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the money cash payroll tax refund alright go on sorry I just need to make certain we got that point I mean that’s a huge difference a loan versus money cash I like cash money 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 original cares Act is the ERC and yes Kevin it is a gorgeous difficult check in the mail where you get actual money from the internal revenue service 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 person needed to be a worker 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 owned a company however it’s based upon you having W-2 workers in America not 10.99. As long as you had W-2 workers 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 6 months of 2021 on the W-2 appropriate so there were 6 quarters the program was open well walk us through the six quarters so you had quarters 2 3 and four of 2020 and you had quarters one two and three of 2021. fine so that’s how it’s determined you need to be on the W-2 during that duration now let’s talk my favorite part money how much can you return per worker that was on a W-2 in those 6 quarters so the estimation in 2020 to be specific Kevin is 50 of the worker’s wage to an optimum of 5 thousand dollars per staff member for the year of 2020 and in 2021 the numbers escalated to 70 of the worker’s salary to an optimum of seven thousand per quarter how did that occur um they just altered the rules in.
2021 versus since 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 five 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 5 thousand in twenty twenty that’s twenty 6 thousand dollars per employee that is since that’s a great deal of money it is now there’s a caution here the PPP money would have to be lowered 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 10 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 staff members 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 question is why does nobody learn about this since appearance when I initially became aware of this when I initially fulfilled Josh you know I have actually got great deals of financial investments in great deals of companies I’m a significant supporter for entrepreneurship in America and make many many investments in business owners of which numerous suffered through the pandemic when I first found out about this I called BS I do not believe 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 which were well should have and we utilized them sensibly to survive during the pandemic so when I became aware of this I said nah it can’t hold true however when I dug around I even called to my politician good friends Guv Senators they didn’t understand about it I suggest that’s how you understand that’s how false information is that there’s no details out there then a bunch of people informed me well you can’t get it due to the fact that you took the PPP likewise not true so let’s ask Josh why does no one know about the staff member retention credit you know what’s intriguing you’re discussing the banks Kevin because 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 procedure process that’s all um and here there was chaos due to the fact that keep in mind 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 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 in the past do the banks do it nope the banks don’t do it the payroll business yeah some of them are doing it as a payroll business your accounting professional no your accounting professional’s never ever done this prior to unless you have an account that entered into this service and bottom line my company Kevin has been in business given that 2009 and we have actually been working with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 companies so a lot of our huge big business clients have worked with bottom line to recuperate other federal government programs we’ve done sales tax and use tax joblessness tax work opportunity tax credits research and development tax credits unclaimed property real estate tax all of these other federal government programs.
The worker retention tax credit is a broad based refundable tax credit designed to motivate.
employers to keep workers 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 invoices, employer whose business is fully or partially suspended.
decrease by more than 50%.
Accessibility.
1. The credit is available to all companies regardless of size including tax exempt organizations. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
services who take Small company Loans.
2. To certify, the employer needs to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s organization is fully or partially suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the comparable quarter in 2019. When the.
employer’s gross receipts go above 80% of a comparable quarter in 2019 they no longer qualify.
after the end of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the qualifying wages paid up to $10,000 in overall.
It is effective for salaries paid after March 13th and prior to December 31, 2020.
The meaning of certifying wages varies by whether an employer had, on average, basically than.
100 employees in 2019.
Business that specialize in ERC filing help generally supply expertise and assistance to help businesses browse the complex procedure of declaring the credit. They can use various services, including:.
How is the employee retention credit calculated? Employee Retention Credit Economic Security Act
Eligibility Evaluation: These business will examine your organization’s eligibility for the ERC based upon elements such as your industry, income, and operations. They can assist determine if you meet the requirements for the credit and identify the optimum credit amount you can claim.
Documents and Estimation: ERC filing services will assist in collecting the required documentation, such as payroll records and monetary statements, to support your claim. They will also help determine the credit quantity based on qualified wages and other certifying expenses.
Retroactive Claim Review: If you are eligible to declare the ERC for previous quarters, these business can evaluate your past payroll records and financials to determine possible chances for retroactive credits. They can assist you modify previous tax returns to declare these refunds.
Filing Support: Companies concentrating on ERC filings will prepare and send the needed types and documentation on your behalf. This includes completing Kind 941 or any other required tax forms.
Compliance and Updates: ERC policies and assistance have developed over time. These business remain updated with the most recent modifications and guarantee that your filings adhere to the most existing guidelines. They can likewise provide ongoing assistance if the IRS demands extra details or carries out an audit related to your ERC claim.
It is essential to research and vet any company providing ERC filing help to guarantee their reliability and know-how. Search for established companies with experience in tax and payroll services, or consider reaching out to trusted accounting companies or tax specialists who offer ERC submitting support.
Bear in mind that while these business can provide valuable assistance, it’s constantly an excellent idea to have a standard understanding of the ERC requirements and procedure yourself. This will assist you make notified decisions and ensure precise filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief measures. The goal of the ERC is to motivate organizations to keep and pay their employees during the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to eligible employers, consisting of for-profit services, tax-exempt companies, and certain governmental entities. To qualify, companies must satisfy one of two requirements:.
Business operations were totally or partly suspended due to a government order related to COVID-19.
The business experienced a substantial decrease in gross receipts. As pointed out earlier, for 2021, a significant decline is defined as a 20% decline in gross invoices 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.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit amount amounts to a percentage (approximately 70%) of certified incomes paid to staff members, including 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, businesses that received a Paycheck Defense Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 allows companies to declare the ERC even if they got a PPP loan. The very same wages can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and improved, enabling qualified companies to claim the credit for qualified incomes paid as far back as March 13, 2020. This retroactive arrangement provides an opportunity for services to amend prior-year tax returns and get refunds.
Claiming the Credit: Companies can declare the ERC by reporting it on their employment income tax return, generally Type 941. If the credit exceeds the amount of work taxes owed, the excess can be reimbursed to the employer.
It is very important to note that the ERC provisions and eligibility requirements have evolved gradually. The best course of action is to consult with a tax expert or visit the main IRS site for the most updated and comprehensive info concerning the ERC, including any recent legal modifications or updates.
To receive the ERC, a service should satisfy among the following criteria:.
The business operations were fully or partially suspended due to a government order related to COVID-19.
The business experienced a significant decrease in gross invoices. For 2021, a significant decrease 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 invoices compared to the exact same quarter in 2019, or a 20% decline in gross receipts compared to the instantly preceding quarter.
The ERC is available to businesses of all sizes, including tax-exempt organizations, but there are some exceptions. Government entities and businesses that received a PPP loan might have restrictions on declaring the credit.
The process for claiming the ERC includes finishing the required forms and including the credit on your work income tax return (usually Type 941). The exact time it takes to process the credit can vary based upon a number of factors, including the complexity of your organization and the workload of the IRS. It’s recommended to speak with a tax professional for guidance particular to your circumstance.
There are several companies that can assist with the process of claiming the ERC. These consist of accounting companies, tax advisory services, and payroll provider. Some popular companies that use support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research and call these companies straight to ask about their costs and services.
Please note that the information supplied here is based upon general knowledge and may not show the most recent updates or modifications to the ERC. It is essential to speak with a tax professional or visit the official IRS site for the most precise and updated information regarding eligibility, claiming procedures, and readily available assistance.
Less than 100. If the employer had 100 or fewer workers usually in 2019, then the credit is based.
on wages paid to all employees whether they really worked or not. In other words, even if the.
employees worked full time and got paid for full time work, the company still gets the credit.
Greater than 100. If the company had more than 100 employees typically in 2019, then the credit is.
enabled just for salaries paid to staff members who did not work throughout the calendar quarter.
In both cases, “wages” includes not simply money payments but likewise a portion of the expense of company.
provided health care. Employee Retention Credit Economic Security Act
Payment.
Employers can be right away repaid for the credit by minimizing the amount of payroll taxes they.