Lets talk first about Gaap Treatment Of Employee Retention Credit :
Our team here what do these men doing everyone in this space is helping teach people about ERC and uh always provide a gorgeous breakfast and have people really learn more about the program we ought to head to the room where we have the ability to display a few of the checks that we are getting for business and I ‘d like to see that what is this this is uh numerous countless dollars literally Kevin hundreds of countless dollars so these are replicate copies of the letters that go to customers verifying that the check is on the method I suggest you know 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 imply it’s simply I indicate think about how many actual 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 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 know when you
get this you know the check is chosen sure and that’s when they pay so they don’t pay anything until they really receive the cash they don’t pay bottom line Wonder trust anything till this letter is validated the check is on the way they deposit it into their checking account and they can truly trust Wonder trust that the procedure has been completed and the number of you believe you’ve processed since you began this we’re about 35 000 of these for
about six 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 one of these that’s what matters all right Mr Fantastic here you’re at my YouTube channel we’re speaking about something truly important today the employee retention credit which most of you have actually never become aware of I certainly had not heard of it up until extremely just recently and found out a lot about it because this is probably the most affordable cost of capital for any small business anywhere
anytime if you have workers in between 5 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 Principles they’re the biggest processor of these ERC credits this is a 170 page program so it’s not easy this isn’t like PPP we just contact your bank manager and state offer 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 everything 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 came up with the cares Act and the cares act offered 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 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
remedy the cash money payroll tax refund all right go on sorry I simply have to make sure we got that point I suggest that’s a big difference a loan versus cash cash I like money cash that’s what we’re speaking 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 beautiful hard check in the mail where you get actual money from the IRS all right so let’s discuss how it works because it seems like to me if it’s a if it’s employee retention credit that individual had to be a worker so I’m going to make the Presumption this cash is not for the owner not for people on the cap table not for shareholders it’s for staff members right you had to have owned a service however it’s based on 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 need to be on payroll for the first 6 months of 2021 on the W-2 proper 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 2 and 3 of 2021. okay so that’s how it’s measured you have to be on the W-2 throughout that period now let’s talk my favorite part cash 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 exact Kevin is 50 of the worker’s income to a maximum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s wage to an optimum of seven thousand per quarter how did that happen um they simply altered the rules in.
2021 versus since the chaos of the pandemic so they wished 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 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 5 thousand in twenty twenty that’s twenty 6 thousand dollars per worker that is since that’s a lot of cash it is now there’s a caution here the PPP cash would need to be minimized 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 on average Kevin is if you took PPP money 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 workers and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s substantial clearly now the big concern is why does no one understand about this because appearance when I first heard about this when I first met Josh you know I have actually got lots of investments in lots of companies I’m a significant advocate for entrepreneurship in America and make many numerous 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 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 which were well been worthy of and we utilized 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 good friends Governor Senators they didn’t learn 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 people informed me well you can’t get it since you took the PPP also not real so let’s ask Josh why does no one learn about the worker retention credit you understand what’s fascinating you’re talking about the banks Kevin due to the fact that in the PPP loan procedure the federal government made it really clear that if you wanted a PPP loan you would call Wells Fargo Citibank Bank of America any of the big 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 turmoil due to the fact that keep in mind in the original cares act you might refrain from doing both programs so if you had done PPP you could refrain from doing ERC in the original program and when they changed the law in 2021 the banks were refraining from doing ERC since it’s not alone so you’re getting a tax refund so the government never ever made it clear to anyone about how to.
do this does your CFO understand how to do this not actually she or he’s never ever done it before 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 done this prior to unless you have an account that entered into this organization and bottom line my company Kevin has actually been in business considering that 2009 and we have actually been working with the federal government and the state government to recuperate money for Fortune 500 Fortune 1000 business so a great deal of our big huge business customers have actually worked with bottom line to recuperate other government programs we’ve done sales tax and use tax joblessness tax work opportunity 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 employees on their payroll. The credit is 50% of approximately $10,000 in earnings 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%.
1. The credit is available to all employers regardless of size including tax exempt companies. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) little.
organizations who take Small company Loans.
2. To qualify, the company needs to satisfy one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s business is fully or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross receipts are listed below 50% of the comparable quarter in 2019. As soon as the.
employer’s gross invoices go above 80% of a comparable quarter in 2019 they no longer qualify.
after completion of that quarter.
Computation of the Credit.
The quantity of the credit is 50% of the certifying salaries paid up to $10,000 in total.
It is effective for earnings paid after March 13th and before December 31, 2020.
The definition of qualifying earnings differs by whether an employer had, usually, basically than.
100 workers in 2019.
Business that concentrate on ERC filing assistance generally provide know-how and assistance to assist organizations browse the complex process of claiming the credit. They can use different services, including:.
How is the employee retention credit calculated? Gaap Treatment Of Employee Retention Credit
Eligibility Assessment: These companies will evaluate your service’s eligibility for the ERC based upon elements such as your market, income, and operations. If you fulfill the requirements for the credit and identify the maximum credit quantity you can claim, they can help identify.
Paperwork and Calculation: ERC filing services will help in gathering the needed documentation, such as payroll records and financial statements, to support your claim. They will also assist compute the credit quantity based on qualified earnings and other certifying expenses.
Retroactive Claim Review: If you are eligible to declare the ERC for previous quarters, these companies can review your past payroll records and financials to determine possible opportunities for retroactive credits. They can help you change prior tax returns to claim these refunds.
Filing Assistance: Business focusing on ERC filings will prepare and submit the essential forms and paperwork in your place. This consists of completing Form 941 or any other necessary tax forms.
Compliance and Updates: ERC guidelines and guidance have evolved with time. These companies remain upgraded with the current changes and make sure that your filings abide by the most present standards. They can also offer ongoing support if the internal revenue service demands additional details or conducts an audit related to your ERC claim.
It is essential to research study and vet any business providing ERC filing assistance to guarantee their credibility and know-how. Try to find recognized companies with experience in tax and payroll services, or think about reaching out to relied on accounting firms or tax specialists who use ERC filing support.
Bear in mind that while these companies can offer valuable assistance, it’s always an excellent concept to have a fundamental understanding of the ERC requirements and procedure yourself. This will help 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 measures. The objective of the ERC is to motivate organizations to keep and pay their workers throughout the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to eligible employers, including for-profit businesses, tax-exempt companies, and specific governmental entities. To qualify, employers must satisfy one of two requirements:.
The business operations were totally or partially suspended due to a federal government order related to COVID-19.
Business experienced a significant decrease in gross receipts. As mentioned previously, 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 considerable decrease is specified as a 20% decline in gross invoices compared to the very same quarter in 2019, or a 20% decrease in gross invoices 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 (up to 70%) of certified earnings paid to staff members, including certain health plan expenses. The optimum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, companies that received a Paycheck Protection Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 enables businesses to declare the ERC even if they received a PPP loan. The same earnings can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively expanded and improved, permitting eligible employers to claim the credit for certified earnings paid as far back as March 13, 2020. This retroactive arrangement offers a chance for businesses to change prior-year income tax return and receive refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their work income tax return, typically Type 941. If the credit exceeds the amount of employment taxes owed, the excess can be refunded to the company.
It is very important to note that the ERC arrangements and eligibility requirements have progressed gradually. The very best course of action is to consult with a tax expert or visit the main IRS site for the most detailed and current details concerning the ERC, consisting of any recent legislative modifications or updates.
To receive the ERC, an organization needs to meet among the following criteria:.
Business operations were fully or partly suspended due to a federal government order related to COVID-19.
The business experienced a considerable decrease in gross receipts. For 2021, a significant decline is specified as a 20% decline in gross receipts compared to the very 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 invoices compared to the right away preceding quarter.
The ERC is readily available to services of all sizes, including tax-exempt organizations, however there are some exceptions. Federal government entities and organizations that received a PPP loan may have restrictions on declaring the credit.
The procedure for claiming the ERC involves completing the necessary kinds and consisting of the credit on your employment income tax return (typically Kind 941). The exact time it takes to process the credit can vary based on several elements, consisting of the complexity of your company and the work of the IRS. It’s recommended to speak with a tax expert for guidance specific to your scenario.
There are numerous companies that can assist with the procedure of declaring the ERC. These include accounting firms, tax advisory services, and payroll company. Some popular companies that offer assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research and contact these business straight to ask about their fees and services.
Please keep in mind that the info provided here is based upon general understanding and might not show the most current updates or changes to the ERC. It is necessary to seek advice from a tax professional or check out the official IRS website for the most precise and up-to-date info relating to eligibility, declaring procedures, and offered support.
Less than 100. The credit is based if the employer had 100 or fewer employees on average in 2019.
on wages paid to all staff members 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 company still gets the credit.
Greater than 100. The credit is if the company had more than 100 staff members on average in 2019.
allowed just for wages paid to workers who did not work during the calendar quarter.
In both cases, “wages” consists of not just cash payments but also a part of the cost of company.
supplied health care. Gaap Treatment Of Employee Retention Credit
Employers can be right away repaid for the credit by reducing the quantity of payroll taxes they.