Lets talk first about Forbes Employee Retention Credit Part 2 :
Our group here what do these guys doing everybody in this space is helping teach individuals about ERC and uh always offer a gorgeous breakfast and have people really learn about the program we need to head to the room where we have the ability to display some of the checks that we are getting for business and I ‘d like to see that what is this this is uh hundreds of millions of dollars literally Kevin numerous millions of dollars so these are replicate copies of the letters that go to clients confirming that the check is on the method I suggest you understand if you simply begin to take a 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 mean it’s simply I mean think of how many actual clients 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 confirmed 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 understand when you
receive this you know the check is gone for sure and that’s when they pay so they don’t pay anything up until they actually receive the money they don’t pay bottom line Wonder trust anything until this letter is verified the check is on the way they deposit it into their bank account and they can really trust Wonder trust that the procedure has actually been ended up and the number of you believe you have actually processed since you started this we have to do with 35 000 of these for
about six billion dollars wow so clearly they know what they’re doing which’s what you need 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 Wonderful here you’re at my YouTube channel we’re discussing something really important today the worker retention credit which most of you have never heard of I certainly had not become aware of it up until very just recently and found out a lot about it since this is probably the most affordable 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 professional with me this is Josh Fox he’s the founder and CEO of bottom line Concepts they’re the biggest processor of these ERC credits this is a 170 page program so it’s hard this isn’t like PPP we simply phone your bank manager and say give 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 representative for this I enjoy this program it’s going away soon you got to find out all about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply start there so throughout the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act offered organizations three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically 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.
fix the money money payroll tax refund alright go on sorry I just have 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 discussing 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 gorgeous hard check in the mail where you get real money from the IRS all right so let’s speak about how it works since it seems like to me if it’s a if it’s employee retention credit that individual had to be a staff member so I’m going to make the Assumption this cash is not for the owner not for individuals on the cap table not for investors it’s for staff members right you had to have actually owned a business but it’s based upon 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 proper so there were six quarters the program was open well stroll us through the six quarters so you had quarters 2 three and 4 of 2020 and you had quarters one two and three of 2021. fine so that’s how it’s measured you have 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 computation in 2020 to be specific Kevin is 50 of the staff member’s salary to an optimum of 5 thousand dollars per staff member for the year of 2020 and in 2021 the numbers increased to 70 of the worker’s income to a maximum of 7 thousand per quarter how did that occur um they simply changed the rules in.
2021 versus because the turmoil of the pandemic so they wanted to even get more to keep those workers 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 happens 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 worker that is because 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 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would minimize the 26 000 so what we’re seeing typically Kevin is if you took PPP cash somewhere around 10 thousand dollars an individual so let’s state hypothetically you owned a dining establishment in New york city City where I’m from and you had a hundred employees and you took PPP money you would still get a million dollar in the mail from the internal revenue service so it’s big undoubtedly now the big question is why does no one understand about this because look when I first found out about this when I initially satisfied Josh you know I’ve got great deals of investments in great deals of business I’m a significant advocate for entrepreneurship in America and make lots of lots of investments in business owners of which numerous suffered through the pandemic when I initially became aware of 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 extremely easy to do we had our CEOs call the banks they got their loans which were well been worthy of and we used them wisely to survive throughout the pandemic so when I became aware of this I stated nah it can’t be true but when I dug around I even called to my politician good friends Governor Senators they didn’t know about it I imply that’s how you know that’s how false information is that there’s no details out there then a lot of people informed me well you can’t get it since you took the PPP likewise not true so let’s ask Josh why does no one know about the staff member retention credit you understand what’s fascinating you’re speaking about the banks Kevin because in the PPP loan procedure the federal government made it really 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 simply process procedure that’s all um and here there was chaos because keep in mind in the initial cares act you could not do both programs so if you had done PPP you might not do ERC in the original program and when they changed the law in 2021 the banks were refraining from doing ERC due to the fact that 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 really 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 company your accounting professional no your accounting professional’s never ever done this before unless you have an account that entered into this business and bottom line my company Kevin has stayed in business given that 2009 and we’ve been working with the federal government and the state federal government to recuperate money for Fortune 500 Fortune 1000 companies so a lot of our big huge business customers have actually dealt with bottom line to recuperate other government programs we have actually done sales tax and use tax joblessness tax work chance tax credits research and development tax credits unclaimed home real estate tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit created to motivate.
companies to keep staff members on their payroll. The credit is 50% of as much as $10,000 in incomes paid by an.
Due to the fact that of COVID-19 or whose gross invoices, company whose organization is totally or partially suspended.
decrease by more than 50%.
Availability.
1. The credit is readily available to all companies no matter size consisting of tax exempt companies. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
companies who take Small company Loans.
2. To qualify, the employer needs to fulfill one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s company 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 equivalent quarter in 2019. When the.
employer’s gross invoices go above 80% of a comparable quarter in 2019 they no longer qualify.
after completion of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the certifying incomes paid up to $10,000 in total.
It works for salaries paid after March 13th and before December 31, 2020.
The definition of qualifying earnings differs by whether a company had, on average, more or less than.
100 employees in 2019.
Companies that focus on ERC filing assistance typically provide knowledge and assistance to assist organizations browse the intricate procedure of claiming the credit. They can offer various services, consisting of:.
How is the employee retention credit calculated? Forbes Employee Retention Credit Part 2
Eligibility Assessment: These companies will assess your organization’s eligibility for the ERC based on elements such as your industry, earnings, and operations. If you meet the requirements for the credit and identify the maximum credit amount you can declare, they can assist determine.
Paperwork and Estimation: ERC filing services will assist in collecting the needed documentation, such as payroll records and monetary declarations, to support your claim. They will also assist determine the credit quantity based upon qualified incomes and other certifying expenditures.
Retroactive Claim Review: If you are eligible to declare the ERC for prior quarters, these business can examine your previous payroll records and financials to identify possible opportunities for retroactive credits. They can help you modify prior income tax return to declare these refunds.
Filing Support: Companies focusing on ERC filings will prepare and submit the necessary types and documents in your place. This includes completing Form 941 or any other required tax forms.
Compliance and Updates: ERC regulations and assistance have progressed with time. These business remain updated with the current changes and make sure that your filings adhere to the most present standards. If the IRS requests extra information or conducts an audit related to your ERC claim, they can likewise offer continuous assistance.
It is necessary to research study and veterinarian any business providing ERC filing assistance to ensure their trustworthiness and expertise. Look for recognized firms with experience in tax and payroll services, or consider reaching out to trusted accounting firms or tax experts who offer ERC filing assistance.
Keep in mind that while these business can supply important help, it’s constantly a great idea to have a standard understanding of the ERC requirements and procedure yourself. This will help you make informed choices and make sure accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief measures. The goal of the ERC is to encourage organizations to keep and pay their employees throughout the pandemic, even if their operations have actually 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 certain governmental entities. To qualify, companies should fulfill one of two criteria:.
Business operations were totally or partially suspended due to a government order related to COVID-19.
The business experienced a significant decrease in gross receipts. As pointed out earlier, for 2021, a substantial decrease 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 defined as a 20% decline in gross invoices compared to the very same quarter in 2019, or a 20% decline in gross receipts compared to the instantly preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit quantity amounts to a portion (approximately 70%) of qualified salaries paid to workers, including specific health insurance expenses. The maximum credit per staff member is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, businesses that got an Income Defense Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 allows organizations to claim the ERC even if they received a PPP loan. The very same wages can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and improved, permitting eligible employers to declare the credit for qualified salaries paid as far back as March 13, 2020. This retroactive arrangement supplies an opportunity for organizations to change prior-year income tax return and get refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their work income tax return, normally Kind 941. The excess can be reimbursed to the employer if the credit goes beyond the amount of work taxes owed.
It’s important to note that the ERC provisions and eligibility requirements have actually progressed gradually. The very best strategy is to consult with a tax professional or go to the official IRS site for the most current and detailed information relating to the ERC, consisting of any current legal changes or updates.
To receive the ERC, a company should meet one of the following requirements:.
The business operations were totally or partly suspended due to a government order related to COVID-19.
Business experienced a significant decrease in gross receipts. For 2021, a substantial decrease is specified as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
The ERC is available to services of all sizes, consisting of tax-exempt companies, however there are some exceptions. Federal government entities and companies that received a PPP loan may have limitations on claiming the credit.
The procedure for claiming the ERC involves finishing the required kinds and consisting of the credit on your employment tax return (usually Kind 941). The exact time it requires to process the credit can vary based on a number of elements, consisting of the complexity of your organization and the work of the IRS. It’s recommended to seek advice from a tax professional for assistance specific to your scenario.
There are a number of business that can assist with the procedure of claiming the ERC. These consist of accounting firms, tax advisory services, and payroll provider. Some popular business that offer assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research and contact these business straight to ask about their costs and services.
Please keep in mind that the details provided here is based on basic understanding and may not show the most current updates or changes to the ERC. It is essential to talk to a tax professional or visit the main IRS site for the most up-to-date and accurate information regarding eligibility, claiming treatments, and readily available help.
Less than 100. If the company had 100 or less workers usually in 2019, then the credit is based.
on earnings paid to all staff members whether they actually worked or not. To put it simply, 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 workers usually in 2019, then the credit is.
permitted just for salaries paid to workers who did not work throughout the calendar quarter.
In both cases, “earnings” consists of not just money payments however likewise a portion of the cost of company.
supplied healthcare. Forbes Employee Retention Credit Part 2
Payment.
Employers can be instantly reimbursed for the credit by minimizing the quantity of payroll taxes they.