Lets talk first about What Is The Cares Act Employee Retention Credit :
Our team here what do these men doing everybody in this room is helping teach individuals about ERC and uh always provide a stunning breakfast and have individuals actually discover the program we need to head to the room where we have the ability to show a few of the checks that we are getting for business and I want to see that what is this this is uh numerous countless dollars actually Kevin numerous countless dollars so these are replicate copies of the letters that go to customers validating that the check is on the method I indicate you understand if you simply start to take a look at some of these here I imply this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I mean it’s simply I mean consider 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 validated 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’re able to track it you understand when you
get this you understand the check is chosen sure which’s when they pay so they don’t pay anything up until they really get the money they don’t pay bottom line Wonder trust anything up until this letter is confirmed the check is on the way they deposit it into their bank account and they can really trust Wonder trust that the process has actually been finished and the number of you believe you’ve processed since you began this we have to do with 35 000 of these for
about 6 billion dollars wow so clearly they know what they’re doing which’s what you require you require 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 Wonderful here you’re at my YouTube channel we’re talking about something really important today the employee retention credit which the majority of you have actually never ever heard of I definitely had not become aware of it up until extremely recently and found out a lot about it since this is most likely the lowest expense of capital for any small company anywhere
anytime if you have staff members in between 5 and five hundred so I’ve got the professional with me this is Josh Fox he’s the creator and CEO of bottom line Concepts they’re the largest 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 provide me a loan it doesn’t 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 representative for this I enjoy this program it’s disappearing very soon you got to discover all about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply begin there so throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act provided organizations three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone it makes a huge distinction right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
remedy the money cash payroll tax refund all right go on sorry I just have to make sure we got that point I imply that’s a huge difference a loan versus cash money I like money cash 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 stunning hard check in the mail where you get real 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 had 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 workers right you needed to have actually owned a business but it’s based on you having W-2 workers in America not 10.99. As long as you had W-2 staff members 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 six quarters the program was open well stroll us through the six quarters so you had quarters two three and four of 2020 and you had quarters one 2 and three of 2021. all right so that’s how it’s determined you have to be on the W-2 during that duration now let’s talk my preferred part cash how much can you return per worker that was on a W-2 in those six quarters so the estimation in 2020 to be precise Kevin is 50 of the staff member’s salary to an optimum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the staff member’s wage to an optimum of 7 thousand per quarter how did that occur um they just changed the rules in.
2021 versus due to the fact that the mayhem 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 up to 5 thousand Max and then what occurs 21 000 Max in 2021 oh that’s how you create twenty 6 thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per worker that is because that’s a great deal of cash it is now there’s a caveat here the PPP money would need to be minimized from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would minimize 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 employees and you took PPP money you would still get a million dollar in the mail from the internal revenue service so it’s huge obviously now the big question is why does nobody know about this since look when I initially found out about this when I initially satisfied Josh you understand I have actually got great deals of financial investments in lots of companies I’m a major advocate for entrepreneurship in America and make many many investments in business owners of which numerous suffered through the pandemic when I first found out about this I called BS I do not think it since 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 survive throughout the pandemic so when I became aware of this I stated nah it can’t be true however when I dug around I even called to my political leader good friends Guv Senators they didn’t know about it I indicate that’s how you understand that’s how false information is that there’s no information out there then a bunch of people informed me well you can’t get it because you took the PPP also not true so let’s ask Josh why does nobody understand about the employee retention credit you know what’s fascinating you’re discussing the banks Kevin since in the PPP loan procedure the federal government made it very 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 process procedure that’s all um and here there was turmoil due to the fact that remember in the initial 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 altered the law in 2021 the banks were not doing ERC due to the fact that it’s not alone so you’re getting a tax refund so the federal government never made it clear to any person about how to.
do this does your CFO know how to do this not actually he or she’s never ever done it in the past do the banks do it nope the banks don’t do it the payroll companies 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 service 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 recover money for Fortune 500 Fortune 1000 companies so a lot of our huge big business clients have actually dealt with bottom line to recover other government programs we have actually done sales tax and use tax joblessness tax work opportunity tax credits research and development tax credits unclaimed home property tax all of these other government programs.
The worker retention tax credit is a broad based refundable tax credit developed to encourage.
employers to keep employees on their payroll. The credit is 50% of approximately $10,000 in wages paid by an.
employer whose business is completely or partly suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is available to all employers despite size consisting of tax exempt companies. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) little.
companies who take Small company Loans.
2. To certify, the company has to meet one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s service is completely or partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the equivalent quarter in 2019. When the.
company’s gross invoices go above 80% of an equivalent quarter in 2019 they no longer qualify.
after completion of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the certifying salaries paid up to $10,000 in overall.
It works for salaries paid after March 13th and prior to December 31, 2020.
The meaning of qualifying wages varies by whether a company had, on average, more or less than.
100 workers in 2019.
Companies that concentrate on ERC filing assistance normally supply competence and support to assist services browse the complicated procedure of declaring the credit. They can offer different services, including:.
How is the employee retention credit calculated? What Is The Cares Act Employee Retention Credit
Eligibility Evaluation: These business will evaluate your organization’s eligibility for the ERC based upon aspects such as your market, profits, and operations. If you meet the requirements for the credit and determine the optimum credit amount you can claim, they can assist figure out.
Paperwork and Estimation: ERC filing services will assist in gathering the necessary documentation, such as payroll records and financial declarations, to support your claim. They will also help determine the credit quantity based upon eligible incomes and other qualifying expenses.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for prior quarters, these business can review your past payroll records and financials to recognize prospective opportunities for retroactive credits. They can help you change prior tax returns to claim these refunds.
Filing Support: Companies concentrating on ERC filings will prepare and submit the necessary types and paperwork on your behalf. This consists of completing Kind 941 or any other necessary tax forms.
Compliance and Updates: ERC guidelines and guidance have developed gradually. These business stay updated with the latest modifications and ensure that your filings abide by the most existing guidelines. They can likewise provide continuous assistance if the IRS demands additional details or performs an audit related to your ERC claim.
It is essential to research and vet any business offering ERC filing support to guarantee their reliability and expertise. Try to find established firms with experience in tax and payroll services, or think about connecting to trusted accounting firms or tax professionals who provide ERC filing support.
Bear in mind that while these business can supply important help, it’s always a great idea to have a standard understanding of the ERC requirements and process yourself. This will help you make notified decisions and make sure precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief steps. The goal of the ERC is to encourage companies to retain and pay their employees throughout the pandemic, even if their operations have been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is available to qualified companies, consisting of for-profit services, tax-exempt companies, and particular governmental entities. To certify, companies should satisfy one of two requirements:.
The business operations were fully or partly suspended due to a government order related to COVID-19.
The business experienced a substantial decline in gross receipts. As pointed out earlier, for 2021, a considerable decrease is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decrease is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
Credit Amount: 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 qualified earnings paid to workers, consisting of certain health plan expenditures. The maximum credit per worker 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 Protection Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 allows companies to claim the ERC even if they got a PPP loan. Nevertheless, the exact same earnings can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively broadened and improved, allowing eligible companies to declare the credit for certified earnings paid as far back as March 13, 2020. This retroactive provision provides a chance for organizations to modify prior-year income tax return and get refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their employment tax returns, usually Type 941. If the credit exceeds the quantity of work taxes owed, the excess can be reimbursed to the company.
It is necessary to note that the ERC arrangements and eligibility requirements have evolved over time. The best course of action is to seek advice from a tax professional or visit the main internal revenue service site for the most in-depth and updated details concerning the ERC, consisting of any recent legislative changes or updates.
To qualify for the ERC, a business needs to fulfill among the following requirements:.
Business operations were completely or partly suspended due to a federal government order related to COVID-19.
The business experienced a significant decrease in gross receipts. For 2021, a substantial decrease is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
The ERC is offered to companies of all sizes, including tax-exempt organizations, but there are some exceptions. For instance, government entities and businesses that got a PPP loan might have restrictions on claiming the credit.
The process for claiming the ERC involves completing the necessary forms and consisting of the credit on your work income tax return (generally Kind 941). The exact time it requires to process the credit can vary based on several factors, consisting of the complexity of your organization and the workload of the IRS. It’s recommended to consult with a tax expert for guidance particular to your situation.
There are numerous companies that can assist with the process of declaring the ERC. These include accounting companies, tax advisory services, and payroll service providers. Some popular business that offer support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research study and call these companies straight to inquire about their services and costs.
Please keep in mind that the information offered here is based on basic understanding and might not show the most current updates or modifications to the ERC. It is necessary to seek advice from a tax expert or check out the official IRS website for the most updated and accurate info relating to eligibility, declaring treatments, and offered assistance.
Less than 100. If the company had 100 or fewer workers usually in 2019, then the credit is based.
on incomes paid to all staff members whether they really worked or not. To put it simply, even if the.
employees 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 usually in 2019, then the credit is.
enabled only for earnings paid to workers who did not work throughout the calendar quarter.
In both cases, “incomes” includes not simply money payments however also a portion of the cost of employer.
offered healthcare. What Is The Cares Act Employee Retention Credit
Companies can be right away compensated for the credit by minimizing the amount of payroll taxes they.