Lets talk first about Heals Act Employee Retention Credit :
Our group here what do these men doing everyone in this space is helping teach individuals about ERC and uh always provide a beautiful breakfast and have individuals truly discover 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 wish to see that what is this this is uh numerous millions of dollars literally Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to clients verifying that the check is on the method I imply you understand if you simply start to 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 mean consider how many real customers that went through the program yeah this is the very end this is the party at the end when the check is verified the numbers are validated and the check is on the mail in the mail from the IRS heading to the customer 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 till they in fact receive the cash they do not pay bottom line Wonder trust anything up until this letter is validated the check is on the method they deposit it into their savings account and they can genuinely trust Wonder trust that the process has actually been ended up and the number of you think you’ve processed since you began this we have to do with 35 000 of these for
about six billion dollars wow so plainly they know what they’re doing which’s what you need you require professionals 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 talking about something truly essential today the staff member retention credit which the majority of you have never become aware of I definitely had not become aware of it until extremely recently and discovered a lot about it since this is probably the most affordable expense of capital for any small business anywhere
anytime if you have staff members between 5 and five hundred so I’ve got the expert with me this is Josh Fox he’s the creator and CEO of bottom line Ideas 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 manager and say offer me a loan it does not work there’s not a loan it’s an application and Josh is going to inform us all about it and how to get it and why I’ve become yes the Ambassador and paid spokesperson for this I enjoy this program it’s disappearing very soon you got to discover all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply start there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act offered businesses 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 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the money cash payroll tax refund all right go on sorry I just need to ensure we got that point I suggest that’s a huge distinction a loan versus money money I like cash cash that’s what we’re discussing 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 gorgeous difficult check in the mail where you get real money 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 worker retention credit that person needed to be a worker so I’m going to make the Assumption this cash is not for the owner not for individuals on the cap table not for shareholders it’s for employees right you had to have actually owned a service however it’s based upon you having W-2 employees in America not 10.99. so as long as you had W-2 staff members and you paid federal payroll taxes that’s why you would be eligible so you need 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 appropriate so there were six 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 two and 3 of 2021. all right so that’s how it’s measured you have to be on the W-2 during that duration now let’s talk my preferred part cash just how much can you return per employee that was on a W-2 in those 6 quarters so the calculation in 2020 to be precise Kevin is 50 of the employee’s salary 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 staff member’s income to a maximum of seven thousand per quarter how did that occur um they simply altered the rules in.
2021 versus due to the fact that the turmoil of the pandemic so they wished 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 5 thousand Max and after that what happens 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 staff member that is because that’s a lot of money it is now there’s a caveat 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 two you would decrease the 26 000 so what we’re seeing typically Kevin is if you took PPP money somewhere around ten 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 cash you would still get a million dollar in the mail from the internal revenue service so it’s big obviously now the huge concern is why does no one understand about this due to the fact that appearance when I initially found out about this when I first satisfied Josh you understand I’ve got great deals of financial investments in great deals of business I’m a major supporter for entrepreneurship in America and make numerous lots of financial investments in entrepreneurs of which many suffered through the pandemic when I initially became aware of this I called BS I do not believe it due to the fact that 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 and that were well deserved and we used them carefully 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 contacted us to my political leader friends Guv Senators they didn’t learn about it I indicate that’s how you understand that’s how misinformation is that there’s no info out there then a lot of individuals told me well you can’t get it since you took the PPP likewise not true so let’s ask Josh why does nobody know about the staff member retention credit you understand what’s interesting you’re discussing 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 nation and they would process process 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 turmoil because keep in mind in the original cares act you could not do 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 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 anyone about how to.
do this does your CFO know 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 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 actually been in business considering that 2009 and we’ve been working with the federal government and the state government to recuperate money for Fortune 500 Fortune 1000 companies so a great deal of our huge big corporate clients have worked with bottom line to recover other federal government programs we have actually done sales tax and use tax joblessness tax work opportunity 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 designed to motivate.
employers to keep workers on their payroll. The credit is 50% of approximately $10,000 in salaries paid by an.
Because of COVID-19 or whose gross invoices, employer whose organization is completely or partly suspended.
decline by more than 50%.
1. The credit is offered 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) little.
companies who take Small Business Loans.
2. To qualify, the employer needs to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s organization is fully or partially suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross receipts are below 50% of the equivalent quarter in 2019. Once the.
employer’s gross receipts go above 80% of a similar quarter in 2019 they no longer qualify.
after the end of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the certifying wages paid up to $10,000 in overall.
It is effective for wages paid after March 13th and prior to December 31, 2020.
The definition of qualifying wages differs by whether a company had, on average, more or less than.
100 employees in 2019.
Companies that specialize in ERC filing support normally offer competence and assistance to assist companies browse the complex procedure of declaring the credit. They can provide different services, including:.
How is the employee retention credit calculated? Heals Act Employee Retention Credit
Eligibility Evaluation: These business will assess your company’s eligibility for the ERC based on elements such as your industry, revenue, and operations. If you meet the requirements for the credit and determine the optimum credit amount you can declare, they can assist determine.
Documentation and Computation: ERC filing services will assist in collecting the required paperwork, such as payroll records and monetary declarations, to support your claim. They will also help compute the credit amount based upon eligible salaries and other certifying expenditures.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for previous quarters, these companies can examine your previous payroll records and financials to identify possible chances for retroactive credits. They can help you amend prior tax returns to claim these refunds.
Filing Support: Business specializing in ERC filings will prepare and submit the necessary forms and paperwork on your behalf. This includes completing Type 941 or any other required tax forms.
Compliance and Updates: ERC regulations and guidance have developed gradually. These companies remain updated with the latest changes and make sure that your filings comply with the most existing standards. If the IRS demands extra details or conducts an audit associated to your ERC claim, they can also offer ongoing assistance.
It is necessary to research and vet any company offering ERC filing help to guarantee their reliability and knowledge. Look for recognized companies with experience in tax and payroll services, or think about connecting to trusted accounting firms or tax professionals who provide ERC filing support.
Remember that while these companies can supply important support, it’s always a good idea to have a standard understanding of the ERC requirements and process yourself. This will help you make informed choices and make sure precise 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 motivate companies to retain 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 offered to eligible companies, including for-profit businesses, tax-exempt organizations, and specific 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.
Business experienced a substantial decrease in gross receipts. As mentioned previously, for 2021, a substantial decline is specified as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity is equal to a portion (approximately 70%) of certified incomes paid to staff members, consisting of particular health insurance costs. The maximum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, businesses that received a Paycheck Security Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 allows services to claim the ERC even if they received a PPP loan. The exact same incomes can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively broadened and enhanced, enabling eligible employers to claim the credit for qualified earnings paid as far back as March 13, 2020. This retroactive provision supplies 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, typically Form 941. The excess can be reimbursed to the company if the credit surpasses the amount of work taxes owed.
It’s important to keep in mind that the ERC arrangements and eligibility criteria have developed gradually. The best course of action is to talk to a tax professional or check out the main internal revenue service site for the most detailed and current info relating to the ERC, consisting of any current legal modifications or updates.
To get approved for the ERC, an organization must meet one of the following requirements:.
The business operations were fully or partially suspended due to a federal government order related to COVID-19.
Business experienced a significant decrease in gross invoices. For 2021, a significant decline is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decline in gross invoices compared to the instantly preceding quarter.
The ERC is offered to organizations of all sizes, consisting of tax-exempt organizations, however there are some exceptions. For instance, government entities and services that received a PPP loan might have constraints on claiming the credit.
The procedure for claiming the ERC includes completing the essential kinds and consisting of the credit on your employment tax return (typically Form 941). The exact time it requires to process the credit can vary based on several aspects, consisting of the intricacy of your service and the workload of the IRS. It’s suggested to talk to a tax professional for assistance specific to your situation.
There are numerous companies that can help with the procedure of declaring the ERC. Some widely known companies that offer support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the information supplied here is based upon basic knowledge and might not show the most recent updates or modifications to the ERC. It is essential to consult with a tax professional or check out the official internal revenue service site for the most accurate and current info concerning eligibility, declaring procedures, and available support.
Less than 100. If the company had 100 or fewer employees typically in 2019, then the credit is based.
on earnings paid to all workers whether they actually worked or not. Simply put, even if the.
workers worked full-time and made money for full-time work, the company still gets the credit.
Greater than 100. The credit is if the employer had more than 100 staff members on average in 2019.
allowed only for wages paid to employees who did not work during the calendar quarter.
In both cases, “salaries” includes not just cash payments but likewise a portion of the expense of company.
provided healthcare. Heals Act Employee Retention Credit
Companies can be instantly reimbursed for the credit by minimizing the amount of payroll taxes they.