Lets talk first about Payroll Protection Program Vs Employee Retention Credit :
Our group here what do these people doing everyone in this room is assisting teach people about ERC and uh constantly supply a lovely breakfast and have people really find out about the program we should head to the space where we have the ability to show some of the checks that we are getting for companies 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 duplicate copies of the letters that go to customers verifying that the check is on the way I indicate you understand if you simply begin 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 suggest it’s just I mean think about the number of 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 IRS heading to the consumer so that’s how you have the ability to track it you know when you
receive this you understand the check is chosen sure which’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 up until this letter is validated the check is on the way they transfer it into their checking account and they can truly rely on Wonder trust that the process has been finished and the number of you think you have actually processed since you started this we have to do with 35 000 of these for
about 6 billion dollars wow so plainly they know what they’re doing and that’s what you require you need specialists 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 discussing something actually essential today the employee retention credit which the majority of you have never heard of I definitely hadn’t become aware of it until extremely recently and discovered a lot about it due to the fact that this is most likely the most affordable expense of capital for any small business anywhere
anytime if you have staff members between 5 and five hundred so I have actually got the specialist with me this is Josh Fox he’s the founder and CEO of bottom line Concepts they’re the largest processor of these ERC credits this is a 170 page program so it’s not easy this isn’t like PPP we simply call your bank supervisor and state give me a loan it does not work there’s not a loan it’s an application and Josh is going to tell us all about it and how to get it and why I have actually ended up being yes the Ambassador and paid representative for this I enjoy this program it’s disappearing very soon you got to learn everything 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 offered services three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everyone 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.
correct the cash cash payroll tax refund all right go on sorry I just need to ensure we got that point I suggest that’s a big distinction a loan versus money cash I like money cash that’s what we’re speaking about okay 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 difficult check in the mail where you get actual cash from the internal revenue service all right so let’s speak about how it works due to the fact that it seems like to me if it’s a if it’s worker retention credit that individual needed to be a worker so I’m going to make the Presumption this money is not for the owner not for people on the cap table not for shareholders it’s for employees right you had to have owned a company however it’s based upon you having W-2 staff members in America not 10.99. As long as you had W-2 workers 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 very first 6 months of 2021 on the W-2 right so there were six quarters the program was open well stroll 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. alright 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 just how much can you return per staff member that was on a W-2 in those 6 quarters so the estimation in 2020 to be exact Kevin is 50 of the worker’s salary to an optimum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the worker’s wage to an optimum of 7 thousand per quarter how did that take place um they simply altered the rules in.
2021 versus because the mayhem of the pandemic so they wished 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 happens 21 000 Max in 2021 oh that’s how you develop twenty six 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 great deal of cash it is now there’s a caution here the PPP cash would have to be decreased from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would minimize the 26 000 so what we’re seeing on average Kevin is if you took PPP money someplace around 10 thousand dollars an individual so let’s say hypothetically you owned a restaurant in New york city 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 IRS so it’s substantial certainly now the huge concern is why does nobody learn about this because look when I first became aware of this when I initially fulfilled Josh you know I have actually got lots of financial investments in lots of business I’m a major supporter for entrepreneurship in America and make many lots of financial investments in entrepreneurs of which lots of suffered through the pandemic when I initially found out about this I called BS I don’t believe it because I utilize 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 which were well should have and we utilized them sensibly to stay alive throughout the pandemic so when I heard about this I said nah it can’t be true however when I dug around I even called to my politician good friends Governor Senators they didn’t understand about it I indicate that’s how you know that’s how misinformation is that there’s no details 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 worker retention credit you understand what’s interesting you’re discussing the banks Kevin since in the PPP loan procedure the federal government made it extremely 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 simply procedure process that’s all um and here there was turmoil because keep in mind in the initial cares act you might not do both programs so if you had done PPP you could not do ERC in the initial program and when they altered 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 anyone about how to.
do this does your CFO understand how to do this not really she or he’s never done it before do the banks do it nope the banks do not do it the payroll companies yeah some of them are doing it as a payroll company your accounting professional no your accounting professional’s never ever done this prior to unless you have an account that went into this company and bottom line my firm Kevin has been in business because 2009 and we have actually been dealing with the federal government and the state government to recover money for Fortune 500 Fortune 1000 companies so a lot of our huge huge corporate clients have dealt with bottom line to recover other government programs we have actually done sales tax and utilize tax joblessness tax work chance tax credits research and development tax credits unclaimed property real estate tax all of these other government programs.
The worker retention tax credit is a broad based refundable tax credit created to encourage.
employers to keep staff members on their payroll. The credit is 50% of as much as $10,000 in incomes paid by an.
Because of COVID-19 or whose gross receipts, employer whose organization is totally or partially suspended.
decline by more than 50%.
Availability.
1. The credit is readily available to all companies no matter size including tax exempt companies. There are.
just two exceptions: (1) state and city governments and their instrumentalities and (2) small.
businesses who take Small Business Loans.
2. To certify, the company has to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s company is fully or partly suspended by federal 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. When the.
employer’s gross invoices exceed 80% of a similar quarter in 2019 they no longer certify.
after the end of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the qualifying wages paid up to $10,000 in overall.
It is effective for earnings paid after March 13th and before December 31, 2020.
The definition of certifying salaries differs by whether an employer had, usually, more or less than.
100 staff members in 2019.
Companies that focus on ERC filing help usually offer expertise and assistance to assist organizations navigate the complicated procedure of claiming the credit. They can use numerous services, including:.
How is the employee retention credit calculated? Payroll Protection Program Vs Employee Retention Credit
Eligibility Assessment: These business will evaluate your service’s eligibility for the ERC based upon factors such as your market, income, and operations. If you meet the requirements for the credit and recognize the maximum credit quantity you can claim, they can assist figure out.
Documents and Estimation: ERC filing services will help in collecting the essential documents, such as payroll records and financial statements, to support your claim. They will also assist determine the credit quantity based upon qualified salaries and other certifying costs.
Retroactive Claim Review: If you are qualified to declare the ERC for previous quarters, these business can evaluate your previous payroll records and financials to identify prospective chances for retroactive credits. They can help you change prior tax returns to declare these refunds.
Filing Support: Companies specializing in ERC filings will prepare and submit the needed types and documents on your behalf. This includes finishing Type 941 or any other required tax forms.
Compliance and Updates: ERC policies and assistance have progressed with time. These companies stay upgraded with the current changes and ensure that your filings adhere to the most present standards. They can likewise supply ongoing assistance if the internal revenue service demands extra info or conducts an audit related to your ERC claim.
It is very important to research study and vet any company offering ERC filing assistance to guarantee their trustworthiness and proficiency. Try to find recognized companies with experience in tax and payroll services, or think about reaching out to trusted accounting firms or tax professionals who provide ERC filing assistance.
Bear in mind that while these business can provide important help, it’s constantly an excellent concept to have a standard understanding of the ERC requirements and procedure yourself. This will assist you make informed decisions and ensure accurate filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief measures. The goal of the ERC is to motivate organizations to keep and pay their staff members 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 companies, including for-profit companies, tax-exempt organizations, and certain governmental entities. To certify, employers must satisfy one of two requirements:.
The business operations were totally or partially suspended due to a government order related to COVID-19.
Business experienced a substantial decrease in gross receipts. As discussed previously, for 2021, a substantial decline is defined as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a considerable decrease is specified as a 20% decline in gross invoices compared to the same quarter in 2019, or a 20% decline 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 is equal to a percentage (as much as 70%) of qualified earnings paid to workers, including certain health insurance costs. The optimum credit per staff member 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 qualified for the ERC. Legislation passed in late 2020 and extended in 2021 allows companies to declare the ERC even if they got a PPP loan. The same wages can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively expanded and enhanced, allowing qualified companies to claim the credit for qualified salaries paid as far back as March 13, 2020. This retroactive provision supplies a chance for businesses to modify prior-year tax returns and get refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their work tax returns, typically Form 941. The excess can be refunded to the company if the credit goes beyond the amount of employment taxes owed.
It is very important to note that the ERC provisions and eligibility criteria have evolved gradually. The best course of action is to talk to a tax professional or go to the main internal revenue service site for the most current and in-depth information relating to the ERC, including any recent legislative modifications or updates.
To qualify for the ERC, a service needs to meet among the following criteria:.
The business operations were fully or partly suspended due to a federal government order related to COVID-19.
The business experienced a considerable decline in gross receipts. For 2021, a significant decline is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decline 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.
The ERC is readily available to services of all sizes, consisting of tax-exempt organizations, however there are some exceptions. For instance, government entities and services that got a PPP loan might have limitations on declaring the credit.
The process for declaring the ERC involves completing the needed types and including the credit on your work tax return (typically Form 941). The exact time it takes to process the credit can vary based upon a number of aspects, consisting of the complexity of your business and the work of the internal revenue service. It’s recommended to speak with a tax expert for guidance particular to your situation.
There are numerous companies that can assist with the process of declaring the ERC. Some popular companies that offer help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the info offered here is based upon basic understanding and might not show the most current updates or changes to the ERC. It is very important to seek advice from a tax expert or go to the main internal revenue service website for the most accurate and up-to-date info concerning eligibility, claiming treatments, and readily available support.
Less than 100. If the company had 100 or less workers typically in 2019, then the credit is based.
on wages paid to all staff members whether they actually worked or not. To put it simply, even if the.
workers worked full-time and got paid for full time work, the company still gets the credit.
Greater than 100. If the company had more than 100 workers typically in 2019, then the credit is.
permitted only for wages paid to staff members who did not work throughout the calendar quarter.
In both cases, “incomes” consists of not simply cash payments however also a portion of the expense of employer.
supplied healthcare. Payroll Protection Program Vs Employee Retention Credit
Payment.
Companies can be right away reimbursed for the credit by minimizing the amount of payroll taxes they.