Lets talk first about Baker Tilly Employee Retention Credit :
Our team here what do these guys doing everyone in this room is helping teach people about ERC and uh always provide a beautiful breakfast and have people really learn more about the program we ought to head to the space where we have the ability to display some of the checks that we are getting for companies and I ‘d like to see that what is this this is uh hundreds of countless dollars actually Kevin numerous millions of dollars so these are duplicate copies of the letters that go to customers validating that the check is on the way I mean you understand if you just begin to take a 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 indicate it’s simply I indicate consider how many real clients that went through the program yeah this is the very end this is the party 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 know the check is gone for sure and that’s when they pay so they do not pay anything till they in fact get the cash they don’t pay bottom line Wonder trust anything up until this letter is verified the check is on the method they deposit it into their bank account and they can truly rely on Wonder trust that the procedure has been ended up and the number of you think you have actually processed because you began this we have to do with 35 000 of these for
about six billion dollars wow so plainly they know what they’re doing which’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 speaking about something truly essential today the employee retention credit which the majority of you have actually never ever heard of I definitely hadn’t heard of it till very just recently and discovered a lot about it since this is probably the most affordable cost of capital for any small business 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 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 simply phone your bank supervisor and state offer me a loan it does not work there’s not a loan it’s an application and Josh is going to inform all of us about it and how to get it and why I’ve become yes the Ambassador and paid representative for this I love this program it’s going away very soon you got to find out everything about it let’s talk staff member 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 offered companies 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 distinction right there two 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 all right go on sorry I simply need to make certain we got that point I imply that’s a huge distinction a loan versus money money I like money cash that’s what we’re talking about all right 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 tough check in the mail where you get actual cash 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 employee retention credit that individual needed to be a worker so I’m going to make the Assumption this cash is not for the owner not for individuals on the cap table not for shareholders it’s for staff members right you needed to have owned a service but it’s based on you having W-2 staff members 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 need 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 six quarters the program was open well walk us through the 6 quarters so you had quarters 2 three and four of 2020 and you had quarters one two and 3 of 2021. okay so that’s how it’s measured you have to be on the W-2 throughout that duration now let’s talk my preferred part cash just 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 salary to a maximum of 5 thousand dollars per staff member for the year of 2020 and in 2021 the numbers increased to 70 of the employee’s wage to an optimum of 7 thousand per quarter how did that take place um they just altered the rules in.
2021 versus because the chaos of the pandemic so they wished 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 up to 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 since that’s a lot of money it is now there’s a caveat here the PPP money would have to be minimized 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 on average Kevin is if you took PPP money somewhere 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 huge concern is why does no one learn about this since appearance when I initially became aware of this when I initially fulfilled Josh you understand I’ve got great deals of financial investments in lots of business I’m a major advocate for entrepreneurship in America and make many lots of investments in business owners of which lots of suffered through the pandemic when I initially became aware of this I called BS I do not think it since I utilize the PPP we went through the money 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 used them sensibly to stay alive throughout the pandemic so when I found out about this I stated nah it can’t be true but when I dug around I even called to my politician friends Guv 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 lot of people informed me well you can’t get it because you took the PPP also not true so let’s ask Josh why does no one understand about the employee retention credit you understand what’s intriguing you’re talking about the banks Kevin due to the fact that 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 country and they would process process in Canada a pre-pp loan there’s no loans in Canada by the way it’s just procedure procedure that’s all um and here there was turmoil because keep in mind in the original cares act you might not do both programs so if you had done PPP you might not do ERC in the original program and when they altered the law in 2021 the banks were not doing ERC since it’s not alone so you’re getting a tax refund so the government never made it clear to anyone about how to.
do this does your CFO know how to do this not actually 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 some of them are doing it as a payroll business your accountant no your accountant’s never ever done this before unless you have an account that went into this service 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 companies so a great deal of our huge big corporate customers have actually 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 property property tax all of these other government programs.
The worker 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 earnings paid by an.
Due to the fact that of COVID-19 or whose gross invoices, employer whose business is completely or partly suspended.
decline by more than 50%.
Accessibility.
1. The credit is offered to all employers no matter size including tax exempt organizations. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
businesses who take Small Business Loans.
2. To certify, the company has to satisfy one of two alternative tests. The tests are computed 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 equivalent quarter in 2019. When the.
employer’s gross invoices go above 80% of a similar quarter in 2019 they no longer certify.
after completion of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the qualifying earnings paid up to $10,000 in total.
It is effective for salaries paid after March 13th and prior to December 31, 2020.
The definition of qualifying earnings varies by whether a company had, on average, more or less than.
100 staff members in 2019.
Business that concentrate on ERC filing help generally offer competence and support to help services browse the complicated process of declaring the credit. They can use numerous services, consisting of:.
How is the employee retention credit calculated? Baker Tilly Employee Retention Credit
Eligibility Assessment: These business will examine your business’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 amount you can claim, they can help figure out.
Documentation and Calculation: ERC filing services will assist in gathering the essential paperwork, such as payroll records and monetary declarations, to support your claim. They will also assist determine the credit amount based upon eligible salaries and other certifying expenditures.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for previous quarters, these companies can examine your past payroll records and financials to determine possible chances for retroactive credits. They can assist you change prior tax returns to declare these refunds.
Filing Support: Business specializing in ERC filings will prepare and submit the needed forms and documentation in your place. This consists of finishing Kind 941 or any other required tax return.
Compliance and Updates: ERC policies and guidance have developed with time. These companies stay upgraded with the latest modifications and make sure that your filings adhere to the most existing guidelines. They can also supply ongoing support if the IRS demands extra information or conducts an audit related to your ERC claim.
It is necessary to research and vet any company using ERC filing help to ensure their trustworthiness and knowledge. Look for recognized companies with experience in tax and payroll services, or think about connecting to relied on accounting companies or tax professionals who use ERC filing assistance.
Keep in mind that while these companies can supply important support, it’s constantly a good concept to have a basic understanding of the ERC requirements and process yourself. This will help you make informed 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 measures. The objective of the ERC is to encourage companies to retain and pay their workers during the pandemic, even if their operations have actually been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to qualified companies, including for-profit businesses, tax-exempt organizations, and certain governmental entities. To certify, companies should fulfill one of two requirements:.
Business operations were totally or partially suspended due to a federal government order related to COVID-19.
Business experienced a considerable decline in gross receipts. As discussed earlier, for 2021, a significant 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 specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decline in gross invoices compared to the immediately preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit amount is equal to a portion (up to 70%) of certified salaries paid to workers, including certain health insurance expenditures. The maximum credit per staff member 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 Security Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 enables businesses to declare the ERC even if they received a PPP loan. The exact same wages can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively broadened and enhanced, allowing eligible employers to claim the credit for qualified salaries paid as far back as March 13, 2020. This retroactive arrangement provides a chance for services to modify prior-year income tax return and receive refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their work tax returns, normally Form 941. If the credit surpasses the quantity of employment taxes owed, the excess can be refunded to the employer.
It is very important to note that the ERC provisions and eligibility requirements have progressed gradually. The best course of action is to consult with a tax professional or check out the main internal revenue service website for the most up-to-date and in-depth details regarding the ERC, consisting of any recent legislative modifications or updates.
To qualify for the ERC, a company should fulfill among the following requirements:.
Business operations were fully or partially suspended due to a federal government order related to COVID-19.
Business experienced a significant decrease in gross receipts. For 2021, a significant decline is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decline in gross invoices compared to the right away preceding quarter.
The ERC is available to businesses of all sizes, including tax-exempt companies, however there are some exceptions. For instance, government entities and services that received a PPP loan might have constraints on declaring the credit.
The procedure for declaring the ERC involves completing the needed forms and including the credit on your work income tax return (normally Form 941). The exact time it requires to process the credit can differ based on numerous aspects, consisting of the intricacy of your organization and the work of the IRS. It’s suggested to speak with a tax professional for guidance specific to your scenario.
There are numerous companies that can help with the process of claiming the ERC. These consist of accounting firms, tax advisory services, and payroll service providers. Some well-known companies that use support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research and call these business straight to ask about their costs and services.
Please note that the info provided here is based upon general knowledge and might not reflect the most recent updates or modifications to the ERC. It is necessary to seek advice from a tax expert or visit the main IRS site for the most current and accurate info regarding eligibility, claiming procedures, and readily available assistance.
Less than 100. The credit is based if the employer had 100 or fewer employees on average in 2019.
on incomes paid to all staff members whether they actually worked or not. To put it simply, 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 staff members usually in 2019, then the credit is.
permitted just for wages paid to staff members who did not work during the calendar quarter.
In both cases, “incomes” consists of not just money payments however likewise a part of the cost of company.
provided health care. Baker Tilly Employee Retention Credit
Payment.
Employers can be immediately repaid for the credit by reducing the amount of payroll taxes they.