Lets talk first about Employee Retention Credit Under Cares Act :
Our team here what do these men doing everyone in this room is helping teach people about ERC and uh constantly provide a stunning breakfast and have individuals really learn more about the program we should head to the room where we have the ability to show a few of the checks that we are getting for companies and I want to see that what is this this is uh hundreds of millions of dollars actually Kevin numerous countless dollars so these are duplicate copies of the letters that go to clients validating that the check is on the method I imply you know if you simply start to look at some 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 simply I suggest consider how many real clients 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 internal revenue service heading to the customer so that’s how you have the ability to track it you understand when you
get this you know the check is opted for sure which’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 up until this letter is validated the check is on the method they deposit it into their checking account and they can really rely on Wonder trust that the process has been finished and the number of you think you have actually processed given that you started this we’re about 35 000 of these for
about six billion dollars wow so plainly they understand what they’re doing which’s what you require you need experts 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 Terrific here you’re at my YouTube channel we’re speaking about something actually crucial today the employee retention credit which most of you have actually never ever become aware of I certainly had not heard of it until really just recently and found out a lot about it since this is most likely the most affordable cost of capital for any small business anywhere
anytime if you have employees between 5 and five hundred so I have actually got the expert with me this is Josh Fox he’s the founder and CEO of bottom line Principles they’re the largest processor of these ERC credits this is a 170 page program so it’s difficult this isn’t like PPP we simply contact your bank supervisor and say give 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 become yes the Ambassador and paid spokesperson for this I enjoy this program it’s disappearing soon you got to find out all about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply begin there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act provided services 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everyone it makes a huge difference right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the money money payroll tax refund fine go on sorry I simply have to ensure we got that point I mean that’s a big distinction a loan versus cash money I like money money that’s what we’re talking 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 talk about how it works due to the fact that it seems like to me if it’s a if it’s employee retention credit that person had to be an employee 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 workers right you had to have actually owned an organization however it’s based on you having W-2 staff members 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 walk us through the 6 quarters so you had quarters two three and four of 2020 and you had quarters one two and three of 2021. alright so that’s how it’s measured you need to be on the W-2 throughout that duration now let’s talk my preferred part money how much can you return per staff member that was on a W-2 in those six quarters so the calculation in 2020 to be specific Kevin is 50 of the staff member’s income to an optimum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers escalated to 70 of the employee’s income to an optimum of 7 thousand per quarter how did that happen um they just changed the rules in.
2021 versus due to the fact that the turmoil of the pandemic so they wanted 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 up to five thousand Max and then what occurs 21 000 Max in 2021 oh that’s how you come up with twenty 6 thousand twenty one thousand to twenty twenty one plus five 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 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 on average Kevin is if you took PPP money someplace around ten thousand dollars an individual so let’s say hypothetically you owned a dining establishment in New york city 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 certainly now the big question is why does nobody understand about this since appearance when I initially found out about this when I first satisfied Josh you understand I have actually got great deals of financial investments in lots of business I’m a major advocate for entrepreneurship in America and make lots of numerous financial investments in business owners of which many suffered through the pandemic when I first 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 cash 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 wisely to stay alive throughout the pandemic so when I found out about this I stated nah it can’t be true however when I dug around I even called to my political leader buddies Guv Senators they didn’t understand about it I mean that’s how you understand that’s how false information is that there’s no information out there then a lot of people informed me well you can’t get it because you took the PPP likewise not true so let’s ask Josh why does nobody know about the employee retention credit you understand what’s fascinating 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 huge banks in our nation and they would process procedure 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 chaos since keep in mind in the original cares act you could refrain from doing both programs so if you had done PPP you might not do ERC in the original program and when they altered the law in 2021 the banks were refraining from doing ERC because it’s not alone so you’re getting a tax refund so the federal government never ever made it clear to anybody about how to.
do this does your CFO understand how to do this not really she or he’s never done it previously do the banks do it nope the banks do not do it the payroll business yeah some of them are doing it as a payroll company your accounting professional no your accountant’s never done this before unless you have an account that entered into this organization and bottom line my firm Kevin has actually stayed in business given that 2009 and we’ve 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 huge huge business clients have worked with bottom line to recuperate other government programs we’ve done sales tax and utilize tax joblessness tax work chance 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 encourage.
companies to keep staff members on their payroll. The credit is 50% of up to $10,000 in salaries paid by an.
employer whose company is fully or partly suspended because of COVID-19 or whose gross invoices.
decrease 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.
businesses who take Small Business Loans.
2. To certify, the company has to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s business is completely or partly suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross invoices are below 50% of the similar quarter in 2019. When the.
employer’s gross invoices exceed 80% of an equivalent quarter in 2019 they no longer qualify.
after completion of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the qualifying salaries 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 differs by whether a company had, usually, basically than.
100 employees in 2019.
Companies that specialize in ERC filing support usually provide expertise and support to assist 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 Under Cares Act
Eligibility Assessment: These business will examine your business’s eligibility for the ERC based upon factors such as your market, profits, and operations. If you satisfy the requirements for the credit and determine the maximum credit quantity you can claim, they can help identify.
Documentation and Estimation: ERC filing services will assist in collecting the essential paperwork, such as payroll records and financial declarations, to support your claim. They will likewise help compute the credit amount based on qualified incomes and other certifying expenditures.
Retroactive Claim Review: If you are qualified to claim the ERC for prior quarters, these business can evaluate your past payroll records and financials to recognize prospective chances for retroactive credits. They can help you modify prior income tax return to declare these refunds.
Filing Support: Business concentrating on ERC filings will prepare and send the needed forms and documentation on your behalf. This includes completing Form 941 or any other required tax forms.
Compliance and Updates: ERC regulations and guidance have developed gradually. These business stay upgraded with the latest modifications and ensure that your filings abide by the most existing standards. They can likewise offer ongoing support if the IRS demands additional information or performs an audit related to your ERC claim.
It’s important to research and veterinarian any company using ERC filing support to guarantee their credibility and know-how. Try to find recognized firms with experience in tax and payroll services, or consider reaching out to trusted accounting firms or tax specialists who provide ERC filing assistance.
Remember that while these companies can provide valuable help, it’s always an excellent idea to have a basic understanding of the ERC requirements and process yourself. This will assist you make informed choices and guarantee accurate 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 keep and pay their employees during the pandemic, even if their operations have actually been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to eligible employers, consisting of for-profit companies, tax-exempt companies, and specific governmental entities. To qualify, employers must meet one of two criteria:.
The business operations were totally or partially suspended due to a government order related to COVID-19.
The business experienced a significant decrease in gross invoices. As discussed previously, for 2021, a considerable decline is defined as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decline in gross invoices compared to the very same quarter in 2019, or a 20% decline in gross invoices compared to the instantly 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 (up to 70%) of certified incomes paid to employees, including certain health plan 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 Security Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 permits organizations to claim the ERC even if they received a PPP loan. The exact same incomes can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and improved, enabling eligible employers to claim the credit for qualified wages paid as far back as March 13, 2020. This retroactive provision offers an opportunity for organizations to amend prior-year tax returns and receive refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their work tax returns, normally Form 941. If the credit exceeds the amount of work taxes owed, the excess can be refunded to the employer.
It’s important to keep in mind that the ERC arrangements and eligibility requirements have actually developed over time. The best strategy is to talk to a tax expert or check out the main IRS site for the most up-to-date and detailed information relating to the ERC, including any current legislative modifications or updates.
To qualify for the ERC, a business must fulfill among the following requirements:.
The business operations were fully or partially suspended due to a government order related to COVID-19.
Business experienced a significant decrease in gross invoices. For 2021, a considerable decrease is defined as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decline in gross invoices compared to the very same quarter in 2019, or a 20% decline in gross invoices compared to the right away preceding quarter.
The ERC is available to services of all sizes, including tax-exempt companies, however there are some exceptions. Government entities and organizations that got a PPP loan might have constraints on declaring the credit.
The procedure for claiming the ERC includes completing the essential kinds and including the credit on your work tax return (typically Form 941). The exact time it takes to process the credit can vary based on several aspects, including the complexity of your company and the workload of the internal revenue service. It’s advised to seek advice from a tax professional for assistance particular to your circumstance.
There are numerous business that can help with the process of claiming the ERC. Some well-known companies that offer support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the info supplied here is based on general knowledge and may not reflect the most recent updates or changes to the ERC. It’s important to talk to a tax expert or check out the official internal revenue service website for the most current and precise details regarding eligibility, claiming treatments, and available support.
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 really worked or not. In other words, even if the.
staff members worked full time and made money for full-time work, the employer still gets the credit.
Greater than 100. If the employer had more than 100 staff members usually in 2019, then the credit is.
permitted only for wages paid to employees who did not work throughout the calendar quarter.
In both cases, “earnings” consists of not simply cash payments but likewise a part of the expense of employer.
provided health care. Employee Retention Credit Under Cares Act
Employers can be immediately compensated for the credit by decreasing the quantity of payroll taxes they.