Lets talk first about Employee Retention Credit Cash Flow Statement :
Our team here what do these guys doing everybody in this space is assisting teach people about ERC and uh always offer a lovely breakfast and have individuals actually learn about the program we need to head to the room where we have the ability to show some of the checks that we are getting for business and I wish to see that what is this this is uh numerous countless dollars actually Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to customers verifying that the check is on the way I indicate you know if you simply begin to take a look at some of these here I mean 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 how many 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 verified 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 know 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 in fact get the money they don’t pay bottom line Wonder trust anything until this letter is confirmed the check is on the method they transfer it into their bank account and they can truly rely on Wonder trust that the process has been completed and how many you believe you have actually processed considering that you started this we’re about 35 000 of these for
about 6 billion dollars wow so clearly they understand what they’re doing which’s what you need 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 Terrific here you’re at my YouTube channel we’re discussing something truly crucial today the worker retention credit which the majority of you have actually never ever become aware of I certainly had not heard of it till really just recently and discovered a lot about it since this is most likely the lowest cost of capital for any small business anywhere
anytime if you have workers 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 Principles they’re the biggest processor of these ERC credits this is a 170 page program so it’s difficult this isn’t like PPP we simply call up your bank manager and state give 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 have actually become yes the Ambassador and paid representative for this I enjoy this program it’s going away very soon you got to find out everything about it let’s talk worker 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 provided businesses three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everybody it makes a big distinction right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the money money payroll tax refund fine go on sorry I just need to make sure we got that point I indicate that’s a big distinction a loan versus cash money I like money cash that’s what we’re discussing 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 stunning difficult check in the mail where you get actual money from the internal revenue service all right so let’s talk about how it works since it seems like to me if it’s a if it’s worker retention credit that person had to be an employee 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 workers right you had to have owned a service however it’s based upon you having W-2 workers in America not 10.99. so as long as you had W-2 workers 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 have to be on payroll for the very first 6 months of 2021 on the W-2 correct so there were 6 quarters the program was open well walk us through the six quarters so you had quarters 2 three and 4 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 favorite part money just how much can you return per worker that was on a W-2 in those six quarters so the computation in 2020 to be precise Kevin is 50 of the staff member’s income to an optimum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers escalated to 70 of the worker’s income to an optimum of 7 thousand per quarter how did that occur um they simply changed 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 up to five thousand Max and after that what takes place 21 000 Max in 2021 oh that’s how you create twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty 6 thousand dollars per worker that is because that’s a great deal of money it is now there’s a caveat here the PPP cash would have 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 usually Kevin is if you took PPP cash someplace around 10 thousand dollars an individual so let’s say hypothetically you owned a dining establishment in New york city City where I’m from and you had a hundred workers and you took PPP money you would still get a million dollar in the mail from the IRS so it’s substantial clearly now the huge question is why does nobody learn about this since look when I first became aware of this when I initially satisfied Josh you know I’ve got great deals of investments in great deals of business I’m a major advocate for entrepreneurship in America and make lots of lots of investments in entrepreneurs of which many suffered through the pandemic when I initially heard about this I called BS I do not believe it because I utilize the PPP we went through the money 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 deserved and we used them carefully to survive throughout the pandemic so when I heard about this I stated nah it can’t be true but 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 info out there then a bunch of people informed me well you can’t get it because you took the PPP also not real so let’s ask Josh why does no one learn about the staff member retention credit you know what’s intriguing you’re talking about the banks Kevin since in the PPP loan process the federal government made it really clear that if you desired a PPP loan you would call Wells Fargo Citibank Bank of America any of the huge 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 simply process process that’s all um and here there was chaos because keep in mind in the original cares act you could not do both programs so if you had actually done PPP you might refrain from doing 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 any person 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 business yeah some of them are doing it as a payroll business your accountant no your accountant’s never done this prior to unless you have an account that entered into this business and bottom line my firm Kevin has actually stayed 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 companies so a great deal of our huge huge business customers have worked with bottom line to recover other federal government programs we have actually done sales tax and use tax unemployment tax work opportunity 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 motivate.
companies to keep staff members on their payroll. The credit is 50% of up to $10,000 in earnings paid by an.
Since of COVID-19 or whose gross receipts, employer whose business is fully or partially suspended.
decline by more than 50%.
1. The credit is offered to all employers no matter size including tax exempt companies. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) small.
businesses who take Small company Loans.
2. To certify, the company needs to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s business 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. When the.
company’s gross receipts exceed 80% of an equivalent quarter in 2019 they no longer certify.
after the end of that quarter.
Computation of the Credit.
The quantity of the credit is 50% of the qualifying incomes paid up to $10,000 in overall.
It is effective for salaries paid after March 13th and prior to December 31, 2020.
The meaning of certifying incomes differs by whether an employer had, typically, more or less than.
100 employees in 2019.
Companies that specialize in ERC filing assistance generally provide proficiency and support to assist businesses navigate the intricate procedure of claiming the credit. They can use different services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Cash Flow Statement
Eligibility Assessment: These business will evaluate your organization’s eligibility for the ERC based upon elements such as your industry, earnings, and operations. If you meet the requirements for the credit and determine the maximum credit quantity you can claim, they can assist identify.
Documents and Calculation: ERC filing services will assist in collecting the needed documentation, such as payroll records and financial statements, to support your claim. They will likewise help compute the credit amount based on qualified earnings and other qualifying costs.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for previous quarters, these companies can evaluate your past payroll records and financials to recognize possible opportunities for retroactive credits. They can help you amend prior income tax return to declare these refunds.
Filing Support: Business specializing in ERC filings will prepare and submit the essential types and documents on your behalf. This includes completing Form 941 or any other required tax forms.
Compliance and Updates: ERC regulations and guidance have evolved with time. These companies remain updated with the most recent changes and ensure that your filings abide by the most present guidelines. If the Internal revenue service demands extra info or conducts an audit associated to your ERC claim, they can likewise offer continuous assistance.
It is necessary to research and veterinarian any business providing ERC filing support to guarantee their trustworthiness and competence. Try to find established firms with experience in tax and payroll services, or consider reaching out to trusted accounting firms or tax professionals who offer ERC submitting support.
Keep in mind that while these business can offer valuable support, it’s always an excellent concept to have a basic understanding of the ERC requirements and process yourself. This will help you make informed choices and guarantee precise filings.
The Worker 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 motivate businesses to retain and pay their employees during the pandemic, even if their operations have actually been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to eligible companies, consisting of for-profit organizations, tax-exempt companies, and certain governmental entities. To certify, companies must fulfill one of two requirements:.
Business operations were completely or partly suspended due to a federal government order related to COVID-19.
Business experienced a significant decline in gross invoices. As pointed out previously, for 2021, a substantial decline is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decrease in gross receipts compared to the immediately preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount is equal to a portion (up to 70%) of qualified wages paid to workers, consisting of specific health insurance expenses. 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 received a Paycheck Protection Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 allows businesses to claim the ERC even if they got a PPP loan. Nevertheless, the same earnings can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and improved, enabling qualified companies to declare the credit for qualified salaries paid as far back as March 13, 2020. This retroactive provision provides a chance for businesses to modify prior-year income tax return and receive refunds.
Claiming the Credit: Companies can declare the ERC by reporting it on their employment income tax return, typically Form 941. If the credit surpasses the amount of work taxes owed, the excess can be reimbursed to the employer.
It is very important to keep in mind that the ERC arrangements and eligibility criteria have evolved gradually. The best course of action is to seek advice from a tax expert or go to the main IRS website for the most updated and comprehensive info regarding the ERC, consisting of any current legal modifications or updates.
To receive the ERC, a company should meet among the following criteria:.
Business operations were totally or partially suspended due to a government order related to COVID-19.
The business experienced a considerable decrease in gross invoices. For 2021, a significant decline is specified as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decrease is specified as a 20% decline in gross receipts compared to the exact same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
The ERC is readily available to companies of all sizes, consisting of tax-exempt companies, but there are some exceptions. Government entities and services that received a PPP loan may have limitations on declaring the credit.
The procedure for declaring the ERC involves completing the required types and consisting of the credit on your work income tax return (normally Kind 941). The exact time it requires to process the credit can vary based upon several factors, including the complexity of your organization and the workload of the IRS. It’s advised to consult with a tax expert for guidance particular to your circumstance.
There are a number of business that can help with the procedure of claiming the ERC. Some widely known companies that offer support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the information offered 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 site for the most up-to-date and precise info relating to eligibility, declaring procedures, and offered support.
Less than 100. The credit is based if the employer had 100 or less staff members on average in 2019.
on salaries paid to all staff members whether they really worked or not. In other words, even if the.
workers worked full time and made money for full-time work, the employer still gets the credit.
Greater than 100. The credit is if the company had more than 100 staff members on average in 2019.
permitted just for salaries paid to staff members who did not work throughout the calendar quarter.
In both cases, “earnings” includes not simply cash payments but also a portion of the cost of employer.
supplied healthcare. Employee Retention Credit Cash Flow Statement
Employers can be right away compensated for the credit by minimizing the amount of payroll taxes they.