Lets talk first about Is The Employee Retention Credit The Same As Ppp :
Our team here what do these guys doing everybody in this room is assisting teach individuals about ERC and uh constantly offer a beautiful breakfast and have people truly find out about the program we need to head to the room where we are able to display a few of the checks that we are getting for companies and I wish to see that what is this this is uh hundreds of countless dollars literally Kevin hundreds of millions of dollars so these are duplicate copies of the letters that go to customers confirming that the check is on the way I indicate you understand if you simply start to 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 mean it’s simply I imply think of 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 internal revenue service heading to the customer so that’s how you’re able to track it you understand when you
get this you know the check is chosen sure which’s when they pay so they do not pay anything up until they actually get the cash they don’t pay bottom line Wonder trust anything up until this letter is confirmed the check is on the method they deposit it into their savings account and they can genuinely trust Wonder trust that the process has been ended up and the number of you think you’ve processed given that you began this we’re about 35 000 of these for
about six billion dollars wow so plainly they understand what they’re doing which’s what you need 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 talking about something really important today the employee retention credit which most of you have never become aware of I definitely hadn’t become aware of it up until extremely just recently and found out a lot about it since this is probably the most affordable expense of capital for any small business anywhere
anytime if you have employees in between 5 and five hundred so I’ve got the specialist with me this is Josh Fox he’s the founder and CEO of bottom line Concepts they’re the biggest 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 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 like this program it’s disappearing very soon you got to learn all about it let’s talk employee 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 provided organizations three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everyone it makes a huge difference right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the cash money payroll tax refund all right go on sorry I just need to make certain we got that point I suggest that’s a huge distinction a loan versus cash money I like money money 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 lovely hard check in the mail where you get real money from the IRS all right so let’s speak about how it works because it seems like to me if it’s a if it’s staff member retention credit that individual had 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 investors it’s for workers right you had to have actually owned a business 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 eligible so you have to be on payroll in 2020 on the W-2 and you have to be on payroll for the first 6 months of 2021 on the W-2 appropriate so there were six quarters the program was open well stroll us through the 6 quarters so you had quarters two 3 and four of 2020 and you had quarters one 2 and 3 of 2021. okay 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 money just how much can you return per employee that was on a W-2 in those six quarters so the estimation in 2020 to be exact Kevin is 50 of the staff member’s income to a maximum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers escalated to 70 of the staff member’s wage to a maximum of seven thousand per quarter how did that happen um they just changed the rules in.
2021 versus due to the fact that 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 happens 21 000 Max in 2021 oh that’s how you develop twenty 6 thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty six thousand dollars per staff member that is since that’s a great deal of money it is now there’s a caveat here the PPP cash would have to be lowered from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would lower the 26 000 so what we’re seeing typically Kevin is if you took PPP cash someplace 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 workers and you took PPP money you would still get a million dollar in the mail from the internal revenue service so it’s big clearly now the huge question is why does nobody know about this since appearance when I first found out about this when I initially satisfied Josh you understand I’ve got great deals of financial investments in great deals of business I’m a significant supporter for entrepreneurship in America and make numerous numerous investments in entrepreneurs of which numerous suffered through the pandemic when I first heard about this I called BS I do not think it because I use the PPP we went through the cash center Banks to get it it was extremely easy to do we had our CEOs call the banks they got their loans and that were well been worthy of and we used them carefully to stay alive throughout the pandemic so when I became aware of this I said nah it can’t hold true however when I dug around I even contacted us to my political leader friends Governor Senators they didn’t know about it I imply that’s how you understand that’s how misinformation is that there’s no details out there then a bunch of individuals informed me well you can’t get it since you took the PPP also not true so let’s ask Josh why does no one know about the employee retention credit you know what’s intriguing you’re discussing the banks Kevin due to the fact that in the PPP loan procedure the federal government made it very clear that if you desired 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 procedure that’s all um and here there was mayhem since keep in mind in the original cares act you could refrain from doing both programs so if you had 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 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 he or she’s never ever done it before 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 business your accountant no your accountant’s never ever done this prior to unless you have an account that entered into this organization and bottom line my firm Kevin has been in business because 2009 and we have actually been working with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 business so a lot of our big huge business customers have worked with bottom line to recover other government programs we’ve done sales tax and utilize tax joblessness tax work opportunity tax credits research and development tax credits unclaimed home property tax all of these other government programs.
The staff member retention tax credit is a broad based refundable tax credit designed to motivate.
employers to keep workers on their payroll. The credit is 50% of approximately $10,000 in earnings paid by an.
company whose service is completely or partially suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
1. The credit is offered to all employers despite size including tax exempt organizations. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) little.
organizations who take Small Business 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 service is fully or partially suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross receipts are below 50% of the similar quarter in 2019. As soon as the.
employer’s gross invoices go above 80% of a similar quarter in 2019 they no longer certify.
after the end of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the qualifying wages paid up to $10,000 in total.
It works for salaries paid after March 13th and before December 31, 2020.
The meaning of certifying salaries varies by whether an employer had, usually, more or less than.
100 staff members in 2019.
Business that concentrate on ERC filing assistance normally supply know-how and assistance to help organizations browse the complicated process of claiming the credit. They can provide numerous services, including:.
How is the employee retention credit calculated? Is The Employee Retention Credit The Same As Ppp
Eligibility Evaluation: These business will examine your business’s eligibility for the ERC based on aspects such as your market, income, and operations. They can help determine if you satisfy the requirements for the credit and identify the maximum credit quantity you can claim.
Documentation and Calculation: ERC filing services will assist in collecting the needed documents, such as payroll records and monetary statements, to support your claim. They will likewise assist calculate the credit quantity based on qualified incomes and other qualifying expenditures.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for previous quarters, these business can evaluate your previous payroll records and financials to identify potential opportunities for retroactive credits. They can assist you amend previous tax returns to claim these refunds.
Filing Assistance: Companies specializing in ERC filings will prepare and submit the essential kinds and paperwork on your behalf. This consists of finishing Type 941 or any other necessary tax forms.
Compliance and Updates: ERC regulations and guidance have actually progressed in time. These companies stay updated with the latest changes and guarantee that your filings abide by the most present standards. If the Internal revenue service requests extra information or conducts an audit related to your ERC claim, they can likewise provide ongoing support.
It is very important to research and veterinarian any company offering ERC filing assistance to ensure their credibility and proficiency. Try to find recognized companies with experience in tax and payroll services, or think about reaching out to relied on accounting firms or tax experts who offer ERC filing assistance.
Remember that while these companies can offer valuable assistance, it’s constantly an excellent idea to have a basic understanding of the ERC requirements and process yourself. This will assist you make notified choices and ensure accurate filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief procedures. The goal of the ERC is to motivate services to retain 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 readily available to eligible companies, including for-profit services, tax-exempt organizations, and certain governmental entities. To certify, employers should fulfill one of two criteria:.
The business operations were totally or partly suspended due to a government order related to COVID-19.
The business experienced a substantial decrease in gross invoices. As mentioned previously, for 2021, a substantial decline is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decline in gross invoices compared to the very same quarter in 2019, or a 20% decline in gross invoices compared to the right away 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 portion (approximately 70%) of certified earnings paid to staff members, including certain health plan 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, companies that got a Paycheck Protection Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 permits companies to declare the ERC even if they got a PPP loan. Nevertheless, the exact same wages can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and boosted, allowing eligible employers to claim the credit for certified salaries paid as far back as March 13, 2020. This retroactive provision offers an opportunity for companies to modify prior-year income tax return and get refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their work income tax return, normally Kind 941. The excess can be refunded to the employer if the credit surpasses the amount of employment taxes owed.
It is very important to note that the ERC provisions and eligibility requirements have progressed with time. The very best course of action is to consult with a tax expert or go to the main IRS site for the most comprehensive and current information relating to the ERC, consisting of any recent legal modifications or updates.
To get approved for the ERC, a company needs to satisfy among the following requirements:.
The business operations were totally or partly suspended due to a government order related to COVID-19.
The business experienced a significant decrease in gross invoices. For 2021, a significant decline is defined as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a significant decline is specified 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.
The ERC is available to services of all sizes, including tax-exempt companies, but there are some exceptions. Government entities and businesses that got a PPP loan might have limitations on declaring the credit.
The process for claiming the ERC includes completing the required types and including the credit on your work tax return (usually Form 941). The exact time it requires to process the credit can vary based upon a number of elements, consisting of the complexity of your service and the work of the internal revenue service. It’s recommended to consult with a tax professional for guidance specific to your scenario.
There are several business that can help with the process of declaring the ERC. Some popular companies that provide assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the details offered here is based on general understanding and may not reflect the most recent updates or changes to the ERC. It is necessary to seek advice from a tax professional or go to the main internal revenue service website for the most current and precise details concerning eligibility, claiming procedures, and offered assistance.
Less than 100. The credit is based if the employer had 100 or fewer staff members on average in 2019.
on salaries paid to all employees whether they really worked or not. To put it simply, even if the.
staff members 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 employees usually in 2019, then the credit is.
allowed just for incomes paid to staff members who did not work during the calendar quarter.
In both cases, “incomes” includes not just money payments but also a portion of the expense of employer.
offered health care. Is The Employee Retention Credit The Same As Ppp
Companies can be instantly reimbursed for the credit by reducing the amount of payroll taxes they.