Lets talk first about Employee Retention Credit On Form 1120S :
Our team here what do these guys doing everyone in this room is helping teach people about ERC and uh always supply a lovely breakfast and have people actually find out about the program we must head to the room where we are able to show a few of the checks that we are getting for companies and I ‘d like to see that what is this this is uh hundreds of millions of dollars actually Kevin hundreds of countless dollars so these are replicate copies of the letters that go to clients verifying that the check is on the method I suggest you understand if you just begin to look at a few of these here I suggest this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s simply 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 validated and the check is on the mail in the mail from the internal revenue service heading to the client so that’s how you have the ability to track it you know when you
get this you understand the check is chosen sure and that’s when they pay so they do not pay anything up until they really receive the cash they do not pay bottom line Wonder trust anything till this letter is confirmed the check is on the method they transfer it into their bank account and they can truly trust Wonder trust that the process has actually been ended up and how many you think you’ve processed considering that you began this we’re about 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 require specialists 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 talking about something actually essential today the worker retention credit which the majority of you have never ever become aware of I definitely hadn’t heard of it until extremely recently and learned a lot about it because this is most likely the most affordable cost of capital for any small business anywhere
anytime if you have employees in between 5 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 challenging this isn’t like PPP we just contact your bank manager and state give me a loan it does not 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 ended up being yes the Ambassador and paid representative for this I like this program it’s going away very soon you got to learn all about it let’s talk worker retention credit Josh Fox what is an ERC let’s just start there so throughout the Trump Administration when President Trump was enacted they developed the cares Act and the cares act used services three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everybody 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 need to make certain we got that point I indicate that’s a big distinction a loan versus cash cash I like cash cash that’s what we’re talking 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 beautiful hard check in the mail where you get real cash from the IRS all right so let’s talk about how it works because it sounds like to me if it’s a if it’s staff member 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 shareholders it’s for staff members right you needed to have owned a company but it’s based upon you having W-2 employees in America not 10.99. so 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 need to be on payroll for the very first 6 months of 2021 on the W-2 right so there were 6 quarters the program was open well walk us through the 6 quarters so you had quarters two three and 4 of 2020 and you had quarters one 2 and 3 of 2021. okay so that’s how it’s measured you have to be on the W-2 throughout that duration now let’s talk my preferred part cash how much can you return per employee that was on a W-2 in those six quarters so the computation in 2020 to be specific Kevin is 50 of the worker’s salary to a maximum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers escalated to 70 of the employee’s salary to a maximum of 7 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 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 approximately five thousand Max and then what occurs 21 000 Max in 2021 oh that’s how you create twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per employee that is because that’s a lot of cash it is now there’s a caution here the PPP cash would have to be lowered from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would reduce the 26 000 so what we’re seeing usually Kevin is if you took PPP money somewhere around 10 thousand dollars an individual so let’s say 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 IRS so it’s big obviously now the huge concern is why does nobody understand about this due to the fact that appearance when I first found out about this when I first met Josh you understand I have actually got lots of investments in great deals of business I’m a significant supporter for entrepreneurship in America and make numerous numerous investments in business owners of which numerous suffered through the pandemic when I first became aware of this I called BS I do not believe it since I use the PPP we went through the cash center Banks to get it it was really easy to do we had our CEOs call the banks they got their loans and that were well should have and we used them carefully to stay alive throughout the pandemic so when I became aware of this I stated nah it can’t hold true but when I dug around I even contacted us to my politician friends Guv Senators they didn’t know about it I suggest that’s how you know that’s how misinformation is that there’s no information out there then a bunch of individuals told 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 fascinating you’re talking about the banks Kevin due to the fact that in the PPP loan process 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 process in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply procedure procedure that’s all um and here there was mayhem because keep in mind in the original cares act you could refrain from doing both programs so if you had actually done PPP you might refrain from doing ERC in the original program and when they changed the law in 2021 the banks were not 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 anyone about how to.
do this does your CFO know how to do this not actually she or he’s never done it previously do the banks do it nope the banks don’t do it the payroll business yeah a few of them are doing it as a payroll business your accountant no your accounting professional’s never ever 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 have actually been dealing with the federal government and the state government to recover money for Fortune 500 Fortune 1000 business so a great deal of our big huge corporate customers have actually dealt with bottom line to recover other government programs we’ve done sales tax and utilize tax joblessness tax work opportunity tax credits research and development tax credits unclaimed property property tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit developed to motivate.
companies to keep staff members on their payroll. The credit is 50% of as much as $10,000 in wages paid by an.
Because of COVID-19 or whose gross invoices, company whose business 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.
just two exceptions: (1) state and city governments and their instrumentalities and (2) little.
organizations who take Small Business Loans.
2. To certify, the employer has to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s service is fully or partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross invoices are below 50% of the comparable quarter in 2019. Once the.
employer’s gross receipts exceed 80% of an equivalent quarter in 2019 they no longer certify.
after completion of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the certifying incomes paid up to $10,000 in total.
It is effective for incomes paid after March 13th and before December 31, 2020.
The meaning of certifying wages varies by whether an employer had, typically, basically than.
100 staff members in 2019.
Companies that focus on ERC filing assistance generally offer know-how and support to assist services browse the complex process of declaring the credit. They can use various services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit On Form 1120S
Eligibility Evaluation: These business will examine your company’s eligibility for the ERC based on factors such as your market, income, and operations. They can assist determine if you meet the requirements for the credit and recognize the maximum credit quantity you can declare.
Documentation and Calculation: ERC filing services will assist in gathering the necessary documentation, such as payroll records and monetary declarations, to support your claim. They will also assist calculate the credit amount based upon eligible salaries and other certifying expenses.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for previous quarters, these companies can evaluate your past payroll records and financials to identify potential chances for retroactive credits. They can assist you modify previous tax returns to declare these refunds.
Filing Help: Business specializing in ERC filings will prepare and send the necessary forms and documents on your behalf. This consists of completing Type 941 or any other necessary tax forms.
Compliance and Updates: ERC policies and assistance have progressed gradually. These companies remain updated with the most recent modifications and guarantee that your filings comply with the most current guidelines. They can likewise provide continuous assistance if the IRS demands additional information or conducts an audit related to your ERC claim.
It’s important to research study and veterinarian any business offering ERC filing assistance to guarantee their credibility and expertise. Look for recognized firms with experience in tax and payroll services, or think about connecting to relied on accounting firms or tax specialists who provide ERC submitting assistance.
Remember that while these companies can supply valuable assistance, it’s always a great concept to have a basic understanding of the ERC requirements and process yourself. This will assist you make informed choices and guarantee 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 procedures. The objective of the ERC is to motivate companies to maintain and pay their workers during 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 companies, tax-exempt companies, and certain governmental entities. To certify, companies should satisfy one of two criteria:.
The business operations were fully or partly suspended due to a government order related to COVID-19.
The business experienced a substantial decline in gross invoices. As mentioned earlier, for 2021, a significant decline is specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decline is specified as a 20% decline in gross invoices compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the right away preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount amounts to a percentage (approximately 70%) of qualified salaries paid to employees, consisting of specific health plan expenses. The maximum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, organizations that received an Income Security Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 permits businesses to claim the ERC even if they received a PPP loan. Nevertheless, the very same salaries can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively broadened and enhanced, enabling eligible companies to declare the credit for certified wages paid as far back as March 13, 2020. This retroactive arrangement offers an opportunity for services to change prior-year tax returns and get refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their work income tax return, typically Kind 941. The excess can be reimbursed to the company if the credit exceeds the quantity of employment taxes owed.
It is essential to note that the ERC arrangements and eligibility criteria have progressed with time. The best course of action is to speak with a tax professional or go to the official internal revenue service website for the most detailed and current info concerning the ERC, consisting of any current legal modifications or updates.
To qualify for the ERC, an organization must satisfy one of the following requirements:.
The business operations were totally or partially suspended due to a government order related to COVID-19.
The business experienced a substantial decrease in gross receipts. For 2021, a significant decline is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
The ERC is available to organizations of all sizes, including tax-exempt companies, however there are some exceptions. For example, federal government entities and services that got a PPP loan might have restrictions on claiming the credit.
The procedure for declaring the ERC includes completing the required types and including the credit on your employment income tax return (typically Type 941). The exact time it requires to process the credit can vary based on several elements, including the complexity of your organization and the work of the internal revenue service. It’s suggested to consult with a tax professional for assistance specific to your circumstance.
There are numerous companies that can help with the procedure of declaring the ERC. Some widely known companies that use assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the info provided here is based upon basic knowledge and might not reflect the most current updates or changes to the ERC. It is necessary to talk to a tax expert or check out the main IRS website for the most accurate and up-to-date details concerning eligibility, declaring procedures, and readily available assistance.
Less than 100. If the employer had 100 or less employees on average in 2019, then the credit is based.
on salaries paid to all workers whether they in fact worked or not. In other words, even if the.
employees worked full time and earned money for full-time work, the employer still gets the credit.
Greater than 100. If the company had more than 100 staff members typically in 2019, then the credit is.
allowed just for earnings paid to staff members who did not work during the calendar quarter.
In both cases, “wages” includes not just cash payments however also a part of the cost of company.
supplied health care. Employee Retention Credit On Form 1120S
Employers can be immediately repaid for the credit by reducing the amount of payroll taxes they.