Lets talk first about Cares Act 2021 Employee Retention Credit :
Our team here what do these guys doing everyone in this room is assisting teach individuals about ERC and uh always supply a gorgeous breakfast and have individuals actually learn about the program we ought to head to the space where we are able to show some of the checks that we are getting for companies and I wish to see that what is this this is uh hundreds of millions of dollars actually 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 suggest you know if you just begin to look at some 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 consider how many real 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 understand when you
get this you understand the check is gone for sure and that’s when they pay so they don’t pay anything till they actually get the money they do not pay bottom line Wonder trust anything until this letter is confirmed the check is on the way they transfer it into their bank account and they can truly rely on Wonder trust that the procedure has actually been ended up and how many you believe you’ve processed given that you started this we’re about 35 000 of these for
about 6 billion dollars wow so clearly they understand what they’re doing and that’s what you need you need specialists 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 Terrific here you’re at my YouTube channel we’re talking about something really important today the employee retention credit which the majority of you have actually never become aware of I certainly had not become aware of it till extremely just recently and found out a lot about it due to the fact that this is probably the lowest cost of capital for any small business anywhere
anytime if you have staff members between five and five hundred so I have actually got the expert with me this is Josh Fox he’s the founder and CEO of bottom line Principles 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 call your bank manager and state provide me a loan it doesn’t 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 have actually ended up being yes the Ambassador and paid representative for this I like this program it’s disappearing soon you got to learn all 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 came up with the cares Act and the cares act provided businesses 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everybody it makes a big distinction right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
remedy the cash money 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 money I like money money that’s what we’re talking 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 initial cares Act is the ERC and yes Kevin it is a lovely difficult check in the mail where you get actual money from the internal revenue service all right so let’s discuss how it works because it sounds like to me if it’s a if it’s employee retention credit that individual needed to be an employee 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 employees right you needed to have owned a business however it’s based upon you having W-2 workers in America not 10.99. so as long as you had W-2 staff members 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 have to be on payroll for the very 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 three and four of 2020 and you had quarters one 2 and 3 of 2021. all right so that’s how it’s determined you have to be on the W-2 throughout 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 staff member’s salary to a maximum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s wage to a maximum of 7 thousand per quarter how did that occur um they simply changed the rules in.
2021 versus due to the fact that the turmoil 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 happens 21 000 Max in 2021 oh that’s how you create twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty 6 thousand dollars per employee that is because that’s a lot of cash it is now there’s a caveat here the PPP cash would have to be decreased from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would lower the 26 000 so what we’re seeing on average Kevin is if you took PPP money someplace around 10 thousand dollars an individual so let’s state hypothetically you owned a restaurant in New York City where I’m from and you had a hundred employees and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s huge undoubtedly now the huge concern is why does no one know about this since look when I initially heard about this when I first met Josh you know I have actually got great deals of financial investments in lots of companies I’m a significant advocate for entrepreneurship in America and make many lots of investments in business owners of which many suffered through the pandemic when I initially became aware of this I called BS I don’t believe it since I utilize 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 and that were well deserved and we used them sensibly to stay alive throughout the pandemic so when I became aware of this I stated nah it can’t hold true but when I dug around I even called to my politician buddies Governor Senators they didn’t learn about it I suggest that’s how you know that’s how false information is that there’s no details out there then a lot of individuals told me well you can’t get it because you took the PPP also not real so let’s ask Josh why does no one learn about the staff member retention credit you understand what’s intriguing you’re speaking about the banks Kevin because 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 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 process that’s all um and here there was turmoil because remember in the initial cares act you might not do both programs so if you had actually done PPP you might not do ERC in the original program and when they altered the law in 2021 the banks were refraining from doing ERC since it’s not alone so you’re getting a tax refund so the federal government never ever made it clear to anyone about how to.
do this does your CFO understand how to do this not truly she or he’s never 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 company your accountant no your accounting professional’s never done this prior to unless you have an account that entered into this service and bottom line my company Kevin has actually been in business because 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 great deal of our big big business customers have dealt with bottom line to recuperate other federal government programs we’ve done sales tax and utilize tax unemployment tax work opportunity tax credits research and development tax credits unclaimed property property tax all of these other federal government programs.
The staff member retention tax credit is a broad based refundable tax credit created to encourage.
employers to keep employees on their payroll. The credit is 50% of up to $10,000 in salaries paid by an.
Due to the fact that of COVID-19 or whose gross invoices, employer whose business is totally or partly suspended.
decrease by more than 50%.
1. The credit is offered to all employers despite size including tax exempt companies. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) little.
organizations 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 service is completely or partially suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are listed below 50% of the similar quarter in 2019. As soon as the.
company’s gross receipts exceed 80% of an equivalent quarter in 2019 they no longer certify.
after completion of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the certifying salaries 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 certifying salaries varies by whether a company had, on average, more or less than.
100 employees in 2019.
Business that concentrate on ERC filing support normally offer competence and assistance to help services browse the complicated procedure of claiming the credit. They can provide various services, consisting of:.
How is the employee retention credit calculated? Cares Act 2021 Employee Retention Credit
Eligibility Evaluation: These companies will assess your organization’s eligibility for the ERC based upon aspects such as your industry, profits, and operations. If you fulfill the requirements for the credit and determine the maximum credit quantity you can declare, they can assist figure out.
Documents and Calculation: ERC filing services will assist in collecting the required documents, such as payroll records and financial declarations, to support your claim. They will also help determine the credit quantity based on eligible incomes and other qualifying costs.
Retroactive Claim Review: If you are qualified to claim the ERC for previous quarters, these companies can review your past payroll records and financials to identify potential opportunities for retroactive credits. They can assist you amend prior income tax return to declare these refunds.
Filing Help: Business focusing on ERC filings will prepare and submit the necessary kinds and documents in your place. This includes finishing Type 941 or any other necessary tax return.
Compliance and Updates: ERC regulations and assistance have actually evolved gradually. These business remain updated with the most recent changes and ensure that your filings comply with the most present standards. They can also provide ongoing assistance if the IRS requests additional details or performs an audit related to your ERC claim.
It is essential to research and vet any company using ERC filing assistance to guarantee their trustworthiness and expertise. Look for established companies with experience in tax and payroll services, or think about reaching out to relied on accounting companies or tax professionals who use ERC filing assistance.
Remember that while these companies can offer valuable support, it’s always an excellent concept to have a standard understanding of the ERC requirements and procedure yourself. This will help you make notified choices and guarantee accurate 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 procedures. The goal of the ERC is to motivate organizations to retain and pay their staff members during the pandemic, even if their operations have been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is available to qualified employers, including for-profit organizations, tax-exempt companies, and certain governmental entities. To qualify, companies must fulfill one of two requirements:.
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 receipts. As pointed out previously, for 2021, a considerable decline is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decline in gross receipts compared to the exact same quarter in 2019, or a 20% decline in gross receipts compared to the instantly preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity amounts to a percentage (as much as 70%) of certified earnings paid to staff members, including specific health insurance costs. The maximum credit per employee 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 qualified for the ERC. Legislation passed in late 2020 and extended in 2021 permits organizations 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 Provision: The ERC has actually been retroactively broadened and enhanced, permitting eligible employers to declare the credit for qualified incomes paid as far back as March 13, 2020. This retroactive provision supplies a chance for organizations to change prior-year tax returns and get refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their employment income tax return, normally Kind 941. If the credit exceeds the quantity of work taxes owed, the excess can be reimbursed to the company.
It is necessary to keep in mind that the ERC arrangements and eligibility criteria have evolved in time. The best strategy is to consult with a tax professional or visit the official internal revenue service site for the most updated and comprehensive details concerning the ERC, consisting of any current legislative modifications or updates.
To receive the ERC, a service needs to meet among the following requirements:.
The business operations were fully or partially suspended due to a federal government order related to COVID-19.
Business experienced a considerable decline in gross invoices. 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 receipts compared to the 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 companies, but there are some exceptions. For example, government entities and organizations that got a PPP loan might have restrictions on claiming the credit.
The process for claiming the ERC includes completing the necessary forms and consisting of the credit on your employment income tax return (normally Form 941). The exact time it requires to process the credit can vary based on several factors, consisting of the complexity of your organization and the workload of the IRS. It’s suggested to seek advice from a tax expert for assistance specific to your situation.
There are numerous companies that can assist with the process of declaring the ERC. Some widely known companies that use support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the info offered here is based upon general understanding and might not show the most current updates or modifications to the ERC. It is very important to speak with a tax professional or check out the official internal revenue service website for the most current and precise details concerning eligibility, declaring procedures, and readily available support.
Less than 100. If the company had 100 or less workers usually in 2019, then the credit is based.
on earnings paid to all employees 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 company had more than 100 employees typically in 2019, then the credit is.
allowed just for salaries paid to workers who did not work during the calendar quarter.
In both cases, “incomes” includes not just money payments however likewise a part of the expense of company.
offered healthcare. Cares Act 2021 Employee Retention Credit
Employers can be right away compensated for the credit by lowering the amount of payroll taxes they.