Lets talk first about Accounting For Employee Retention Credit :
Our team here what do these men doing everybody in this space is helping teach people about ERC and uh constantly offer a lovely breakfast and have people truly learn about the program we ought to head to the space where we are able to show 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 actually Kevin numerous millions of dollars so these are replicate copies of the letters that go to clients verifying that the check is on the way I indicate you know if you simply begin to 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 just I indicate think about the number of real clients that went through the program yeah this is the very end this is the celebration at the end when the check is verified 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 opted for sure and that’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 until this letter is confirmed the check is on the way they deposit it into their savings account and they can truly trust Wonder trust that the process has actually been ended up and the number of you think you’ve processed considering that you started this we’re about 35 000 of these for
about 6 billion dollars wow so plainly they know what they’re doing which’s what you need you require 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 Terrific here you’re at my YouTube channel we’re speaking about something really crucial today the employee retention credit which most of you have never heard of I definitely hadn’t become aware of it till really recently and found out a lot about it because this is most likely the most affordable cost of capital for any small company anywhere
anytime if you have staff members in between five and five hundred so I have actually got the specialist with me this is Josh Fox he’s the creator 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 call up your bank manager and state give me a loan it doesn’t 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’ve ended up being yes the Ambassador and paid representative for this I enjoy this program it’s disappearing very soon you got to discover everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply begin there so during the Trump Administration when President Trump was enacted they created the cares Act and the cares act offered services 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly 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 cash cash payroll tax refund alright go on sorry I simply need to make certain we got that point I suggest that’s a big distinction a loan versus money money I like money cash that’s what we’re speaking about 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 original cares Act is the ERC and yes Kevin it is a gorgeous difficult check in the mail where you get real money from the internal revenue service all right so let’s speak about how it works since it sounds like to me if it’s a if it’s staff member retention credit that person had to be an employee so I’m going to make the Assumption this money is not for the owner not for individuals on the cap table not for shareholders it’s for employees right you had to have owned a company however it’s based on you having W-2 staff members 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 qualified 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 right so there were six quarters the program was open well walk us through the 6 quarters so you had quarters two 3 and four of 2020 and you had quarters one 2 and three of 2021. alright so that’s how it’s determined you need to be on the W-2 during that duration now let’s talk my favorite part cash how much can you return per employee that was on a W-2 in those six quarters so the calculation in 2020 to be precise Kevin is 50 of the employee’s income to a maximum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s wage to a maximum of seven thousand per quarter how did that occur um they simply altered the rules in.
2021 versus because the turmoil of the pandemic so they wanted 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 five thousand Max and then what takes place 21 000 Max in 2021 oh that’s how you develop twenty 6 thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per staff member that is since that’s a great deal of cash it is now there’s a caveat here the PPP cash would need to be reduced from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would lower 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 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 huge undoubtedly now the big question is why does nobody learn about this since look when I initially found out about this when I initially satisfied Josh you know I have actually got lots of investments in lots of companies I’m a major advocate for entrepreneurship in America and make many numerous financial investments in business owners of which lots of suffered through the pandemic when I initially found out about this I called BS I don’t think 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 utilized them carefully to stay alive throughout the pandemic so when I heard about this I stated nah it can’t be true however when I dug around I even contacted us to my politician good friends Governor Senators they didn’t understand about it I mean that’s how you understand that’s how misinformation is that there’s no information out there then a lot of individuals told me well you can’t get it because you took the PPP also not real so let’s ask Josh why does nobody know about the staff member retention credit you know what’s interesting you’re speaking about the banks Kevin since 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 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 just procedure process that’s all um and here there was turmoil because remember in the original cares act you could not do both programs so if you had actually done PPP you might not do ERC in the initial program and when they changed the law in 2021 the banks were refraining from doing ERC because it’s not alone so you’re getting a tax refund so the federal government never ever made it clear to anybody about how to.
do this does your CFO know how to do this not actually he or she’s never ever 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 done this prior to unless you have an account that went 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 recover cash for Fortune 500 Fortune 1000 business so a great deal of our big huge business customers have dealt with bottom line to recover other federal government programs we’ve 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 government programs.
The employee retention tax credit is a broad based refundable tax credit developed to motivate.
employers to keep workers on their payroll. The credit is 50% of approximately $10,000 in incomes paid by an.
employer whose service is completely or partially suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
1. The credit is offered to all employers regardless of size consisting of tax exempt companies. There are.
just 2 exceptions: (1) state and city governments and their instrumentalities and (2) little.
companies who take Small company Loans.
2. To qualify, the company needs to meet one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’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 listed below 50% of the comparable quarter in 2019. When the.
company’s gross invoices go above 80% of an equivalent quarter in 2019 they no longer qualify.
after the end of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the qualifying incomes paid up to $10,000 in total.
It is effective for earnings paid after March 13th and prior to December 31, 2020.
The definition of certifying salaries varies by whether an employer had, on average, more or less than.
100 staff members in 2019.
Business that concentrate on ERC filing support normally supply expertise and support to help businesses navigate the complex procedure of declaring the credit. They can provide various services, including:.
How is the employee retention credit calculated? Accounting For Employee Retention Credit
Eligibility Evaluation: These business will assess your service’s eligibility for the ERC based on factors such as your industry, revenue, and operations. They can help identify if you fulfill the requirements for the credit and identify the maximum credit quantity you can declare.
Documents and Estimation: ERC filing services will help in gathering the needed documentation, such as payroll records and monetary declarations, to support your claim. They will likewise assist compute the credit quantity based upon eligible wages and other certifying expenses.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for prior quarters, these business can examine your previous payroll records and financials to determine potential chances for retroactive credits. They can help you amend previous tax returns to claim these refunds.
Filing Assistance: Companies concentrating on ERC filings will prepare and submit the essential types and documents on your behalf. This includes completing Kind 941 or any other required tax forms.
Compliance and Updates: ERC policies and assistance have developed over time. These companies remain updated with the most recent modifications and ensure that your filings adhere to the most current standards. They can likewise offer ongoing support if the IRS requests extra info or conducts an audit related to your ERC claim.
It is essential to research and vet any business using ERC filing help to guarantee their credibility and proficiency. Look for established firms with experience in tax and payroll services, or consider reaching out to trusted accounting companies or tax experts who use ERC filing assistance.
Remember that while these business can offer valuable assistance, it’s constantly a great idea to have a fundamental understanding of the ERC requirements and process yourself. This will help you make notified decisions and ensure accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief steps. The goal of the ERC is to encourage organizations to keep and pay their staff members throughout the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to qualified companies, including for-profit businesses, tax-exempt organizations, and particular governmental entities. To qualify, companies must meet one of two requirements:.
The business operations were fully or partially suspended due to a government order related to COVID-19.
Business experienced a significant decline in gross receipts. As discussed earlier, for 2021, a substantial decline is defined as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity amounts to a percentage (approximately 70%) of qualified wages paid to staff members, including specific health insurance expenses. The optimum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, organizations that received a Paycheck Protection Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 enables companies to declare the ERC even if they got a PPP loan. The very same salaries can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and improved, permitting eligible companies to claim the credit for certified wages paid as far back as March 13, 2020. This retroactive arrangement provides an opportunity for organizations to amend prior-year tax returns and receive refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their work income tax return, typically Type 941. If the credit surpasses the quantity of employment taxes owed, the excess can be reimbursed to the company.
It is essential to note that the ERC provisions and eligibility criteria have actually progressed in time. The very best course of action is to seek advice from a tax professional or visit the main IRS website for the most detailed and current info concerning the ERC, including any recent legal changes or updates.
To get approved for the ERC, an organization must satisfy among the following criteria:.
Business operations were fully or partly suspended due to a federal government order related to COVID-19.
Business experienced a significant decline in gross receipts. For 2021, a significant decrease is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
The ERC is readily available to services of all sizes, consisting of tax-exempt companies, but there are some exceptions. Government entities and companies that received a PPP loan might have limitations on declaring the credit.
The procedure for claiming the ERC involves finishing the needed types and consisting of the credit on your work tax return (normally Kind 941). The exact time it requires to process the credit can differ based on several aspects, including the complexity of your business and the workload of the IRS. It’s advised to seek advice from a tax expert for assistance specific to your situation.
There are a number of business that can help with the process of claiming the ERC. Some well-known business that offer help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the information offered here is based upon general knowledge and might not reflect the most recent updates or modifications to the ERC. It is very important to speak with a tax professional or go to the official IRS website for the most up-to-date and accurate information relating to eligibility, declaring procedures, and available support.
Less than 100. If the company had 100 or fewer employees on average in 2019, then the credit is based.
on wages paid to all employees whether they actually worked or not. In other words, even if the.
workers worked full-time and got paid for full time work, the employer still gets the credit.
Greater than 100. If the company had more than 100 workers on average in 2019, then the credit is.
allowed just for earnings paid to employees who did not work during the calendar quarter.
In both cases, “salaries” includes not simply money payments however also a part of the cost of company.
offered healthcare. Accounting For Employee Retention Credit
Companies can be right away reimbursed for the credit by lowering the amount of payroll taxes they.