Lets talk first about California Employee Retention Credit Treatment :
Our group here what do these people doing everyone in this space is helping teach people about ERC and uh constantly offer a stunning breakfast and have individuals really learn about the program we ought to head to the room where we have the ability 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 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 method I indicate you understand if you simply 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 mean it’s simply I indicate consider the number of actual 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 validated and the check is on the mail in the mail from the IRS heading to the client so that’s how you have the ability to track it you know when you
receive this you understand the check is gone for sure and that’s when they pay so they don’t pay anything till they really receive the cash they do not pay bottom line Wonder trust anything up until this letter is confirmed the check is on the method they transfer it into their bank account and they can really trust Wonder trust that the procedure has actually been finished and the number of you believe you have actually processed given 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 which’s what you require 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 Wonderful here you’re at my YouTube channel we’re discussing something really essential today the worker retention credit which most of you have actually never become aware of I definitely had not heard of it till extremely recently and found out a lot about it due to the fact that this is most likely the most affordable cost of capital for any small company anywhere
anytime if you have staff members in between 5 and five hundred so I have actually got the expert with me this is Josh Fox he’s the creator and CEO of bottom line Principles they’re the largest processor of these ERC credits this is a 170 page program so it’s not easy this isn’t like PPP we simply call your bank supervisor and state provide 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’ve become yes the Ambassador and paid representative for this I enjoy this program it’s disappearing soon you got to learn all 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 developed the cares Act and the cares act provided organizations three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everybody 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.
fix the money cash payroll tax refund fine go on sorry I simply 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 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 initial cares Act is the ERC and yes Kevin it is a stunning difficult check in the mail where you get actual cash from the internal revenue service all right so let’s speak about how it works since it sounds like to me if it’s a if it’s worker retention credit that individual needed to be a worker so I’m going to make the Assumption this money is not for the owner not for individuals on the cap table not for shareholders it’s for staff members right you had to have actually owned a business but it’s based on you having W-2 staff members in America not 10.99. As long as you had W-2 employees 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 first six months of 2021 on the W-2 proper so there were six quarters the program was open well walk us through the six quarters so you had quarters two three and four of 2020 and you had quarters one two and three of 2021. okay so that’s how it’s determined you need to be on the W-2 during that period now let’s talk my preferred part money just how much can you get back per staff member that was on a W-2 in those six quarters so the computation in 2020 to be specific Kevin is 50 of the employee’s salary to an optimum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers increased to 70 of the staff member’s income to a maximum of seven thousand per quarter how did that occur um they just altered the rules in.
2021 versus because the chaos of the pandemic so they wanted 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 approximately five thousand Max and then what happens 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 6 thousand dollars per staff member that is because that’s a lot of cash it is now there’s a caveat here the PPP money would need to be lowered from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would decrease the 26 000 so what we’re seeing typically Kevin is if you took PPP cash somewhere around 10 thousand dollars a person so let’s say hypothetically you owned a restaurant 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 big undoubtedly now the big question is why does no one learn about this due to the fact that look when I first found out about this when I initially satisfied Josh you know I’ve got great deals of financial investments in lots of business I’m a major supporter for entrepreneurship in America and make lots of lots of investments in business owners of which lots of suffered through the pandemic when I initially found out about this I called BS I do not believe it due to the fact that I use 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 been worthy of and we used them wisely to survive during the pandemic so when I became aware of this I stated nah it can’t hold true however when I dug around I even contacted us to my political leader good friends Governor Senators they didn’t learn about it I suggest that’s how you understand that’s how misinformation is that there’s no info out there then a bunch of individuals informed me well you can’t get it due to the fact that you took the PPP also not real so let’s ask Josh why does nobody know about the worker retention credit you know 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 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 turmoil since keep in mind in the original cares act you might refrain from doing both programs so if you had done PPP you might refrain from doing ERC in the initial program and when they altered 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 made it clear to anybody about how to.
do this does your CFO know how to do this not truly she or he’s never done it in the past 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 company your accounting professional no your accounting professional’s never done this before unless you have an account that went into this organization and bottom line my company Kevin has actually been in business considering that 2009 and we have actually been dealing with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 companies so a lot of our huge big 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 chance tax credits research and development tax credits unclaimed property real estate tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit designed to motivate.
employers to keep staff members on their payroll. The credit is 50% of as much as $10,000 in wages paid by an.
Since of COVID-19 or whose gross invoices, employer whose service is totally or partially suspended.
decrease by more than 50%.
1. The credit is readily available to all companies no matter size including tax exempt companies. There are.
just 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
companies who take Small company Loans.
2. To certify, the employer needs to fulfill one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s business is totally 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 equivalent quarter in 2019. Once the.
company’s gross receipts go above 80% of a comparable quarter in 2019 they no longer qualify.
after completion of that quarter.
Computation of the Credit.
The quantity of the credit is 50% of the certifying incomes paid up to $10,000 in overall.
It is effective for wages paid after March 13th and before December 31, 2020.
The definition of certifying earnings differs by whether a company had, typically, more or less than.
100 employees in 2019.
Companies that focus on ERC filing help usually provide know-how and assistance to assist businesses navigate the intricate process of claiming the credit. They can provide various services, including:.
How is the employee retention credit calculated? California Employee Retention Credit Treatment
Eligibility Evaluation: These business will examine your service’s eligibility for the ERC based on elements such as your market, income, and operations. If you satisfy the requirements for the credit and recognize the optimum credit amount you can declare, they can assist determine.
Documents and Estimation: ERC filing services will assist in collecting the necessary documentation, such as payroll records and monetary declarations, to support your claim. They will likewise help determine the credit amount based on qualified incomes and other qualifying expenditures.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for previous quarters, these companies can evaluate your previous payroll records and financials to recognize potential chances for retroactive credits. They can assist you change previous tax returns to claim these refunds.
Filing Help: Business concentrating on ERC filings will prepare and send the necessary kinds and documentation on your behalf. This consists of finishing Type 941 or any other required tax return.
Compliance and Updates: ERC guidelines and assistance have actually evolved over time. These companies stay updated with the most recent modifications and ensure that your filings comply with the most existing guidelines. They can likewise offer continuous support if the IRS requests extra details or conducts an audit related to your ERC claim.
It is essential to research and vet any business providing ERC filing help to guarantee their credibility and competence. Look for established companies with experience in tax and payroll services, or consider reaching out to relied on accounting companies or tax experts who provide ERC filing support.
Bear in mind that while these companies can offer valuable support, it’s constantly a great idea to have a standard understanding of the ERC requirements and process yourself. This will assist you make notified decisions and ensure precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief measures. The objective of the ERC is to motivate companies to retain and pay their workers during the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to qualified employers, consisting of for-profit organizations, tax-exempt organizations, and certain governmental entities. To certify, employers should fulfill one of two requirements:.
The business operations were totally or partially suspended due to a federal government order related to COVID-19.
Business experienced a significant decrease in gross invoices. As discussed previously, for 2021, a substantial decrease is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decline in gross invoices compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the instantly preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity is equal to a portion (as much as 70%) of qualified incomes paid to workers, consisting of certain health insurance expenses. The optimum credit per staff member is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, businesses that received a Paycheck Protection Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 permits companies to claim 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 Provision: The ERC has actually been retroactively expanded and improved, enabling qualified companies to declare the credit for qualified incomes paid as far back as March 13, 2020. This retroactive arrangement offers a chance for businesses to change prior-year tax returns and get refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their employment tax returns, typically Form 941. The excess can be refunded to the employer if the credit surpasses the amount of work taxes owed.
It is very important to note that the ERC arrangements and eligibility criteria have evolved over time. The best course of action is to speak with a tax professional or check out the main internal revenue service website for the most current and comprehensive info regarding the ERC, including any recent legislative modifications or updates.
To receive the ERC, an organization needs to meet one of the following criteria:.
The business operations were fully or partly suspended due to a federal government order related to COVID-19.
Business experienced a substantial decrease in gross invoices. For 2021, a significant decrease is defined as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decline in gross invoices compared to the immediately preceding quarter.
The ERC is readily available to organizations of all sizes, consisting of tax-exempt companies, however there are some exceptions. Government entities and organizations that got a PPP loan might have limitations on claiming the credit.
The procedure for claiming the ERC includes completing the necessary kinds and consisting of the credit on your employment income tax return (usually Type 941). The exact time it takes to process the credit can differ based on a number of factors, including the complexity of your business and the work of the IRS. It’s suggested to talk to a tax professional for assistance particular to your situation.
There are several companies that can help with the process of claiming the ERC. These consist of accounting firms, tax advisory services, and payroll provider. Some widely known business that provide support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research and call these business directly to ask about their charges and services.
Please keep in mind that the information offered here is based upon basic knowledge and may not show the most recent updates or changes to the ERC. It’s important to consult with a tax expert or go to the main IRS website for the most precise and current information relating to eligibility, declaring treatments, and available assistance.
Less than 100. The credit is based if the company had 100 or fewer employees on average in 2019.
on wages paid to all employees whether they in fact worked or not. To put it simply, 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 employer had more than 100 staff members on average in 2019.
permitted only for salaries paid to workers who did not work throughout the calendar quarter.
In both cases, “wages” consists of not just cash payments however likewise a portion of the cost of company.
offered health care. California Employee Retention Credit Treatment
Employers can be immediately repaid for the credit by reducing the quantity of payroll taxes they.