Lets talk first about American Rescue Act Employee Retention Credit :
Our team here what do these men doing everybody in this space is assisting teach individuals about ERC and uh always offer a stunning breakfast and have individuals truly learn more about the program we must head to the space where we are able to show a few of the checks that we are getting for business and I ‘d like to see that what is this this is uh numerous millions of dollars literally 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 mean you know if you just start to look at a few of these here I mean 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 of how many actual customers that went through the program yeah this is the very end this is the party at the end when the check is confirmed the numbers are verified and the check is on the mail in the mail from the internal revenue service 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 do not pay anything till they actually get the money they do not pay bottom line Wonder trust anything until this letter is verified the check is on the method they deposit it into their checking account and they can truly trust Wonder trust that the procedure has actually been finished and the number of 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 plainly they know what they’re doing and that’s what you need you need professionals 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 Fantastic here you’re at my YouTube channel we’re discussing something really important today the staff member retention credit which most of you have never heard of I definitely hadn’t heard of it until extremely recently and learned a lot about it due to the fact that this is probably the most affordable expense 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 professional 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 challenging this isn’t like PPP we simply contact 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 us all about it and how to get it and why I have actually become yes the Ambassador and paid representative for this I like this program it’s going away very soon you got to learn everything about it let’s talk worker retention credit Josh Fox what is an ERC let’s simply start there so throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act provided services 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone 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.
fix the cash money payroll tax refund alright go on sorry I just need to ensure we got that point I imply that’s a huge distinction a loan versus cash cash I like cash cash that’s what we’re discussing 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 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 sounds like to me if it’s a if it’s employee retention credit that person needed to be a staff member so I’m going to make the Presumption this cash is not for the owner not for individuals on the cap table not for shareholders it’s for employees right you needed to have actually owned an organization 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 very first 6 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 4 of 2020 and you had quarters one two and 3 of 2021. fine so that’s how it’s measured you need to be on the W-2 during that duration now let’s talk my favorite part money how much can you return per employee that was on a W-2 in those 6 quarters so the computation in 2020 to be specific Kevin is 50 of the staff member’s income to an optimum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers escalated to 70 of the employee’s wage to a maximum of seven thousand per quarter how did that happen um they just altered the rules in.
2021 versus because the mayhem of the pandemic so they wished to even get more to keep those staff members 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 come up with twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty 6 thousand dollars per employee that is because that’s a great deal of money it is now there’s a caution here the PPP money would need to be reduced 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 typically Kevin is if you took PPP cash someplace around 10 thousand dollars a person so let’s say hypothetically you owned a dining establishment in New york city City where I’m from and you had a hundred staff members and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s substantial certainly now the big question is why does nobody know about this because appearance when I first found out about this when I initially satisfied Josh you know I have actually got lots of financial investments in lots of business I’m a significant supporter for entrepreneurship in America and make lots of numerous financial investments in business owners of which numerous suffered through the pandemic when I first became aware of this I called BS I do not believe it due to the fact that I use 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 which were well deserved and we utilized them sensibly to survive throughout the pandemic so when I found out about this I said nah it can’t be true but when I dug around I even contacted us to my political leader pals Guv Senators they didn’t know about it I indicate that’s how you know that’s how false information is that there’s no details out there then a bunch of people informed me well you can’t get it due to the fact that you took the PPP likewise not real so let’s ask Josh why does no one learn about the staff member retention credit you know what’s interesting you’re speaking about the banks Kevin due to the fact that 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 procedure that’s all um and here there was mayhem due to the fact that keep in mind in the initial cares act you might refrain from doing both programs so if you had done PPP you could not do ERC in the original 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 government never ever made it clear to anybody about how to.
do this does your CFO know how to do this not really she or he’s never ever done it previously do the banks do it nope the banks don’t do it the payroll business yeah a few of them are doing it as a payroll company your accountant no your accountant’s never done this before unless you have an account that went into this business and bottom line my firm Kevin has been in business since 2009 and we have actually been dealing with the federal government and the state federal government to recuperate cash for Fortune 500 Fortune 1000 business so a lot of our huge big corporate customers have worked with bottom line to recover other government programs we’ve done sales tax and utilize tax joblessness tax work chance tax credits research and development tax credits unclaimed home real estate tax all of these other government programs.
The staff member retention tax credit is a broad based refundable tax credit designed to motivate.
companies to keep workers on their payroll. The credit is 50% of as much as $10,000 in salaries paid by an.
company whose business is completely or partly suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is readily available to all employers no matter size including tax exempt companies. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) small.
businesses who take Small Business Loans.
2. To certify, the company needs to satisfy one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s business is fully or partly suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross invoices are listed below 50% of the comparable quarter in 2019. Once the.
employer’s gross invoices exceed 80% of a comparable quarter in 2019 they no longer qualify.
after the end of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the qualifying wages paid up to $10,000 in overall.
It works for salaries paid after March 13th and before December 31, 2020.
The meaning of qualifying salaries varies by whether a company had, on average, more or less than.
100 workers in 2019.
Companies that concentrate on ERC filing assistance typically provide knowledge and assistance to assist companies browse the complicated procedure of declaring the credit. They can use various services, consisting of:.
How is the employee retention credit calculated? American Rescue Act Employee Retention Credit
Eligibility Evaluation: These companies will assess your organization’s eligibility for the ERC based on aspects such as your market, profits, and operations. If you satisfy the requirements for the credit and identify the optimum credit quantity you can claim, they can assist identify.
Documentation and Estimation: ERC filing services will help in collecting the necessary documents, such as payroll records and monetary declarations, to support your claim. They will likewise help calculate the credit quantity based on qualified earnings and other qualifying costs.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for previous quarters, these companies can evaluate your previous payroll records and financials to determine possible opportunities for retroactive credits. They can help you change prior income tax return to claim these refunds.
Filing Assistance: Companies specializing in ERC filings will prepare and send the necessary forms and paperwork on your behalf. This includes completing Kind 941 or any other necessary tax return.
Compliance and Updates: ERC guidelines and guidance have evolved with time. These business remain updated with the latest modifications and make sure that your filings abide by the most present guidelines. They can likewise supply continuous assistance if the IRS demands additional information or conducts an audit related to your ERC claim.
It is very important to research and vet any business using ERC filing help to guarantee their reliability and competence. Look for established firms with experience in tax and payroll services, or think about connecting to trusted accounting firms or tax specialists who provide ERC submitting assistance.
Bear in mind that while these companies can offer valuable help, it’s constantly an excellent concept to have a fundamental understanding of the ERC requirements and procedure yourself. This will assist you make informed decisions and make sure precise filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief steps. The objective of the ERC is to encourage companies to keep and pay their staff members throughout the pandemic, even if their operations have actually been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to eligible companies, consisting of for-profit services, tax-exempt organizations, and specific governmental entities. To qualify, companies should meet one of two requirements:.
Business operations were fully or partly suspended due to a federal government order related to COVID-19.
Business experienced a considerable decrease in gross invoices. As discussed previously, for 2021, a considerable decrease is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decline is specified 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.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit quantity amounts to a percentage (up to 70%) of certified earnings paid to workers, including particular health plan expenditures. 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 an Income Protection Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 allows services to declare the ERC even if they received a PPP loan. The same incomes can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and boosted, permitting eligible companies to claim the credit for certified salaries paid as far back as March 13, 2020. This retroactive arrangement provides an opportunity for companies to amend prior-year tax returns and get refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their employment income tax return, usually Form 941. The excess can be refunded to the company if the credit surpasses the quantity of employment taxes owed.
It is very important to keep in mind that the ERC arrangements and eligibility requirements have progressed over time. The very best course of action is to talk to a tax professional or check out the main internal revenue service website for the most up-to-date and comprehensive information concerning the ERC, including any recent legislative modifications or updates.
To receive the ERC, an organization must satisfy one of the following requirements:.
The business operations were fully or partially suspended due to a federal government order related to COVID-19.
The business experienced a significant decline in gross invoices. For 2021, a considerable decrease is defined as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a considerable decrease is specified as a 20% decline in gross receipts compared to the very same quarter in 2019, or a 20% decline in gross invoices compared to the instantly preceding quarter.
The ERC is offered to services of all sizes, including tax-exempt organizations, but there are some exceptions. Federal government entities and services that got a PPP loan might have limitations on declaring the credit.
The process for claiming the ERC includes completing the essential kinds and consisting of the credit on your work income tax return (typically Form 941). The exact time it requires to process the credit can differ based upon several factors, including the intricacy of your service and the workload of the IRS. It’s advised to talk to a tax professional for guidance specific to your circumstance.
There are a number of companies that can aid with the procedure of claiming the ERC. These include accounting companies, tax advisory services, and payroll provider. Some popular business that offer assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research and get in touch with these companies straight to inquire about their services and fees.
Please note that the info supplied here is based on general understanding and may not show the most recent updates or changes to the ERC. It is very important to consult with a tax expert or check out the main internal revenue service website for the most accurate and updated details regarding eligibility, claiming treatments, and offered support.
Less than 100. The credit is based if the employer had 100 or fewer staff members on average in 2019.
on incomes paid to all workers whether they really worked or not. Simply put, even if the.
workers worked full-time and made money for full time work, the employer still gets the credit.
Greater than 100. If the employer had more than 100 employees usually in 2019, then the credit is.
enabled only for incomes paid to workers who did not work throughout the calendar quarter.
In both cases, “incomes” includes not simply money payments however likewise a portion of the expense of employer.
provided healthcare. American Rescue Act Employee Retention Credit
Employers can be immediately repaid for the credit by reducing the amount of payroll taxes they.