Lets talk first about Employee Retention Credit V. Payroll Protection Program :
Our group here what do these people doing everybody in this space is helping teach people about ERC and uh always supply a beautiful breakfast and have individuals really learn about the program we ought to head to the space where we have the ability to show a few of the checks that we are getting for companies and I ‘d like to see that what is this this is uh hundreds of millions of dollars actually Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to clients confirming that the check is on the way I imply you know if you simply begin to look at a few of these here I suggest this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s just I suggest 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 validated the numbers are verified and the check is on the mail in the mail from the IRS heading to the consumer so that’s how you’re able to track it you understand when you
receive this you understand the check is chosen sure and that’s when they pay so they don’t pay anything up until they actually get the money 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 checking account and they can genuinely trust Wonder trust that the procedure has actually been finished and the number of you think you have actually processed considering that you began this we’re about 35 000 of these for
about six billion dollars wow so clearly they understand what they’re doing and that’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 Fantastic here you’re at my YouTube channel we’re talking about something truly important today the staff member retention credit which most of you have never become aware of I definitely had not become aware of it up until really just recently and learned a lot about it because this is most likely the lowest cost of capital for any small company anywhere
anytime if you have workers in 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 hard this isn’t like PPP we just contact 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 inform us all about it and how to get it and why I’ve ended up being yes the Ambassador and paid spokesperson for this I love this program it’s going away soon you got to find out everything about it let’s talk worker retention credit Josh Fox what is an ERC let’s just begin there so throughout the Trump Administration when President Trump was enacted they developed the cares Act and the cares act offered companies 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everyone it makes a big difference right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the cash money payroll tax refund fine go on sorry I just have to ensure we got that point I suggest that’s a big difference a loan versus cash money I like money money 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 initial cares Act is the ERC and yes Kevin it is a beautiful difficult check in the mail where you get actual money from the internal revenue service all right so let’s speak about how it works due to the fact that it sounds like to me if it’s a if it’s staff member retention credit that person had to be a staff member so I’m going to make the Presumption this cash is not for the owner not for people on the cap table not for investors it’s for staff members right you needed to have 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 employees and you paid federal payroll taxes that’s why you would be eligible so you have to be on payroll in 2020 on the W-2 and you need to be on payroll for the first six months of 2021 on the W-2 correct so there were 6 quarters the program was open well stroll us through the 6 quarters so you had quarters two 3 and 4 of 2020 and you had quarters one 2 and three 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 money just how much can you return per employee that was on a W-2 in those 6 quarters so the computation in 2020 to be exact Kevin is 50 of the worker’s wage to an optimum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the worker’s salary to an optimum of 7 thousand per quarter how did that happen um they just altered the rules in.
2021 versus because the mayhem of the pandemic so they wanted 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 as much as five thousand Max and after that what occurs 21 000 Max in 2021 oh that’s how you develop twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty six thousand dollars per employee that is since that’s a great deal of money it is now there’s a caution here the PPP money would need to be lowered from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would reduce the 26 000 so what we’re seeing usually Kevin is if you took PPP cash somewhere around 10 thousand dollars a person so let’s state hypothetically you owned a dining establishment 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 IRS so it’s huge certainly now the big question is why does no one learn about this because look when I initially found out about this when I first satisfied Josh you understand I’ve got lots of investments in lots of business I’m a significant advocate for entrepreneurship in America and make numerous numerous investments in entrepreneurs of which many suffered through the pandemic when I initially found out about this I called BS I do not believe it since I use the PPP we went through the money center Banks to get it it was extremely easy to do we had our CEOs call the banks they got their loans which were well should have and we utilized them carefully to survive throughout the pandemic so when I found out about this I stated nah it can’t hold true however when I dug around I even contacted us to my political leader pals Governor Senators they didn’t know about it I imply that’s how you know that’s how false information is that there’s no information out there then a lot of people told me well you can’t get it because you took the PPP also not true so let’s ask Josh why does no one learn about the worker retention credit you understand what’s fascinating 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 procedure 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 mayhem because remember in the initial cares act you might 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 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 any person about how to.
do this does your CFO understand how to do this not truly she or he’s never ever done it in the past do the banks do it nope the banks do not do it the payroll companies yeah a few 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 organization and bottom line my firm Kevin has actually been in business since 2009 and we have actually been dealing with the federal government and the state government to recuperate money for Fortune 500 Fortune 1000 business so a lot of our huge big corporate clients have dealt with bottom line to recover other federal government programs we’ve done sales tax and utilize tax joblessness tax work opportunity tax credits research and development tax credits unclaimed property real estate tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit developed to encourage.
employers to keep workers on their payroll. The credit is 50% of approximately $10,000 in incomes paid by an.
employer whose business is totally or partially suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
1. The credit is available to all companies no matter size including tax exempt companies. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
services who take Small Business Loans.
2. To qualify, the company has to fulfill one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s company is totally 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 similar quarter in 2019. As soon as the.
employer’s gross invoices go above 80% of a comparable 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 salaries paid up to $10,000 in overall.
It works for incomes paid after March 13th and prior to December 31, 2020.
The definition of qualifying earnings differs by whether a company had, typically, more or less than.
100 employees in 2019.
Companies that focus on ERC filing help generally offer know-how and support to help organizations navigate the complicated procedure of claiming the credit. They can use numerous services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit V. Payroll Protection Program
Eligibility Evaluation: These business will examine your organization’s eligibility for the ERC based on factors such as your market, revenue, and operations. If you fulfill the requirements for the credit and determine the maximum credit amount you can declare, they can help figure out.
Documents and Estimation: ERC filing services will assist in gathering the needed documents, such as payroll records and financial declarations, to support your claim. They will likewise assist compute the credit amount based on eligible wages and other certifying costs.
Retroactive Claim Review: If you are qualified to declare the ERC for prior quarters, these companies can examine your previous payroll records and financials to determine prospective opportunities for retroactive credits. They can help you change previous tax returns to claim these refunds.
Filing Support: Business concentrating on ERC filings will prepare and send the necessary types and documentation in your place. This consists of completing Form 941 or any other necessary tax forms.
Compliance and Updates: ERC guidelines and guidance have actually developed in time. These companies remain updated with the current modifications and make sure that your filings comply with the most present guidelines. They can also supply continuous support if the internal revenue service requests additional information or conducts an audit related to your ERC claim.
It’s important to research study and veterinarian any business offering ERC filing help to guarantee their credibility and knowledge. Look for recognized companies with experience in tax and payroll services, or consider reaching out to relied on accounting firms or tax professionals who use ERC submitting support.
Remember that while these companies can supply important help, it’s constantly an excellent idea to have a standard understanding of the ERC requirements and process yourself. This will assist you make notified decisions and guarantee precise filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief steps. The objective of the ERC is to encourage businesses to keep and pay their workers during the pandemic, even if their operations have actually been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to qualified companies, including for-profit services, tax-exempt companies, and specific governmental entities. To qualify, companies must meet one of two criteria:.
The business operations were fully or partly suspended due to a government order related to COVID-19.
Business experienced a significant decline in gross invoices. As discussed previously, 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 considerable decline is defined as a 20% decline in gross receipts compared to the very same quarter in 2019, or a 20% decline in gross receipts compared to the right away preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount amounts to a portion (up to 70%) of qualified salaries 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: At first, organizations that received a Paycheck Security Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 enables services to claim the ERC even if they received a PPP loan. However, the same earnings can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and boosted, permitting qualified employers to declare the credit for qualified incomes paid as far back as March 13, 2020. This retroactive arrangement provides an opportunity for services to change prior-year tax returns and receive refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their employment income tax return, normally Kind 941. If the credit goes beyond the amount of employment taxes owed, the excess can be refunded to the company.
It is necessary to note that the ERC provisions and eligibility requirements have actually evolved over time. The very best course of action is to seek advice from a tax expert or visit the main internal revenue service site for the most comprehensive and updated information regarding the ERC, including any current legal modifications or updates.
To receive the ERC, a business needs to meet one of the following criteria:.
Business operations were completely or partially suspended due to a federal government order related to COVID-19.
The business experienced a considerable decrease in gross receipts. For 2021, a considerable decline is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decrease in gross receipts compared to the right away preceding quarter.
The ERC is available to businesses of all sizes, consisting of tax-exempt companies, however there are some exceptions. For instance, federal government entities and services that got a PPP loan may have restrictions on declaring the credit.
The procedure for declaring the ERC involves finishing the required kinds 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 numerous elements, including the complexity of your service and the work of the internal revenue service. It’s suggested to speak with a tax professional for guidance specific to your circumstance.
There are a number of companies that can assist with the procedure of declaring the ERC. Some popular business that provide support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the information offered here is based upon basic understanding and might not reflect the most current updates or changes to the ERC. It is very important to seek advice from a tax expert or visit the official IRS website for the most accurate and current details regarding eligibility, claiming procedures, and offered support.
Less than 100. If the company had 100 or less employees on average in 2019, then the credit is based.
on salaries paid to all staff members whether they actually worked or not. Simply put, 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 employer had more than 100 staff members typically in 2019, then the credit is.
allowed only for incomes paid to employees who did not work throughout the calendar quarter.
In both cases, “salaries” consists of not just money payments however likewise a part of the expense of employer.
provided healthcare. Employee Retention Credit V. Payroll Protection Program
Companies can be instantly reimbursed for the credit by minimizing the amount of payroll taxes they.