Lets talk first about Cares Act Employee Retention Credit 2022 :
Our group here what do these men doing everyone in this space is assisting teach people about ERC and uh constantly provide a lovely breakfast and have individuals truly learn more about the program we must head to the room where we are able to display some of the checks that we are getting for business and I wish to see that what is this this is uh numerous millions of dollars actually Kevin numerous countless dollars so these are replicate copies of the letters that go to clients confirming that the check is on the way I imply you understand if you simply begin to take a look at a few of these here I suggest this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I mean it’s just I suggest think of how many actual clients that went through the program yeah this is the very end this is the celebration at the end when the check is confirmed the numbers are validated and the check is on the mail in the mail from the IRS heading to the customer so that’s how you have the ability to track it you know when you
get this you understand the check is gone for sure and that’s when they pay so they do not pay anything till they really get the money they do not pay bottom line Wonder trust anything till this letter is confirmed the check is on the method they transfer it into their savings account and they can truly trust Wonder trust that the process has actually been completed and the number of you believe you’ve processed given that you started this we’re about 35 000 of these for
about six billion dollars wow so clearly they know what they’re doing which’s what you require 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 Fantastic here you’re at my YouTube channel we’re talking about something actually essential today the employee retention credit which the majority of you have actually never heard of I certainly hadn’t become aware of it till really recently and discovered a lot about it because this is probably the lowest cost of capital for any small business anywhere
anytime if you have workers in between 5 and five hundred so I’ve got the expert with me this is Josh Fox he’s the creator and CEO of bottom line Principles they’re the biggest processor of these ERC credits this is a 170 page program so it’s difficult this isn’t like PPP we simply phone your bank manager and say offer 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 ended up being yes the Ambassador and paid representative for this I like this program it’s disappearing very soon you got to discover all about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply begin there so throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act provided businesses 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 big 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 money payroll tax refund okay go on sorry I just have to make certain we got that point I mean that’s a big difference a loan versus money cash I like money 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 lovely difficult check in the mail where you get real cash from the IRS all right so let’s discuss how it works because it sounds like to me if it’s a if it’s staff member retention credit that individual needed to be a staff member so I’m going to make the Assumption this money is not for the owner not for individuals on the cap table not for investors it’s for employees right you needed to have owned a company however it’s based upon you having W-2 employees in America not 10.99. so as long as you had W-2 workers 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 six months of 2021 on the W-2 right so there were 6 quarters the program was open well stroll us through the six quarters so you had quarters 2 3 and 4 of 2020 and you had quarters one two and three of 2021. alright so that’s how it’s measured you need to be on the W-2 during that period now let’s talk my favorite part cash just how much can you return per staff member 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 five thousand dollars per employee for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the worker’s wage to an optimum of 7 thousand per quarter how did that take place um they just changed the rules in.
2021 versus because the mayhem 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 5 thousand Max and then what occurs 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 worker that is since 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 2 you would reduce the 26 000 so what we’re seeing usually Kevin is if you took PPP money somewhere around ten thousand dollars an individual 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 huge obviously now the huge question is why does nobody understand about this because look when I first heard about this when I first satisfied Josh you understand I have actually got lots of financial investments in lots of companies I’m a major supporter for entrepreneurship in America and make lots of many financial investments in entrepreneurs of which numerous suffered through the pandemic when I initially found out about this I called BS I don’t think it due to the fact that I use the PPP we went through the cash 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 deserved and we utilized them carefully to survive throughout the pandemic so when I became aware of this I stated nah it can’t be true however when I dug around I even called to my politician friends Guv Senators they didn’t know about it I indicate that’s how you understand that’s how misinformation is that there’s no info out there then a lot of people informed me well you can’t get it since you took the PPP likewise not true so let’s ask Josh why does nobody know about the worker retention credit you know what’s intriguing you’re speaking 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 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 procedure that’s all um and here there was mayhem since remember in the initial cares act you could not do both programs so if you had actually done PPP you might refrain from doing ERC in the original program and when they changed the law in 2021 the banks were not doing ERC since it’s not alone so you’re getting a tax refund so the federal government never made it clear to anybody about how to.
do this does your CFO understand how to do this not actually he or she’s never done it previously do the banks do it nope the banks don’t do it the payroll business yeah some of them are doing it as a payroll business your accounting professional no your accountant’s never done this before unless you have an account that entered into this organization and bottom line my firm Kevin has stayed in business since 2009 and we have actually been dealing with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 business so a great deal of our huge big business clients have dealt with bottom line to recuperate other government programs we have actually done sales tax and utilize tax unemployment tax work opportunity tax credits research and development tax credits unclaimed home real estate tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit created to motivate.
employers to keep employees on their payroll. The credit is 50% of up to $10,000 in earnings paid by an.
company whose service is totally or partially suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is available to all companies no matter size including tax exempt companies. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) little.
organizations who take Small company Loans.
2. To qualify, the employer has to satisfy one of two alternative tests. The tests are determined 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 employer’s gross invoices are below 50% of the equivalent quarter in 2019. Once the.
company’s gross receipts go above 80% of an equivalent quarter in 2019 they no longer certify.
after the end of that quarter.
Computation of the Credit.
The quantity of the credit is 50% of the qualifying incomes paid up to $10,000 in total.
It is effective for salaries paid after March 13th and before December 31, 2020.
The definition of certifying wages varies by whether an employer had, on average, more or less than.
100 workers in 2019.
Business that concentrate on ERC filing assistance generally provide proficiency and support to assist organizations browse the complicated procedure of claiming the credit. They can offer various services, including:.
How is the employee retention credit calculated? Cares Act Employee Retention Credit 2022
Eligibility Assessment: These companies will assess your organization’s eligibility for the ERC based on elements such as your industry, profits, and operations. If you fulfill the requirements for the credit and identify the optimum credit quantity you can claim, they can assist determine.
Documentation and Computation: ERC filing services will assist in gathering the needed documents, such as payroll records and monetary declarations, to support your claim. They will likewise help determine the credit quantity based on qualified salaries and other qualifying expenditures.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for previous quarters, these business can review your past payroll records and financials to recognize prospective chances for retroactive credits. They can help you amend prior income tax return to claim these refunds.
Filing Support: Companies specializing in ERC filings will prepare and submit the needed types and documentation on your behalf. This consists of completing Kind 941 or any other necessary tax return.
Compliance and Updates: ERC policies and assistance have evolved with time. These companies stay upgraded with the latest modifications and make sure that your filings abide by the most present standards. If the IRS requests additional information or carries out an audit related to your ERC claim, they can also offer ongoing support.
It is essential to research and vet any business providing ERC filing help to guarantee their credibility and proficiency. Search for recognized firms with experience in tax and payroll services, or think about reaching out to relied on accounting firms or tax experts who use ERC submitting support.
Remember that while these business can supply important help, it’s always a good concept to have a fundamental understanding of the ERC requirements and process yourself. This will assist you make notified choices and guarantee 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 goal of the ERC is to motivate services to maintain and pay their workers during the pandemic, even if their operations have actually been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to qualified companies, consisting of for-profit businesses, tax-exempt organizations, and specific governmental entities. To qualify, companies should 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 invoices. As discussed earlier, for 2021, a significant decrease is specified as a 20% decrease in gross invoices 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 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 company’s share of Social Security taxes. The credit amount amounts to a portion (as much as 70%) of certified salaries paid to workers, consisting of 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: At first, companies that received a Paycheck Security Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 permits organizations to claim the ERC even if they received a PPP loan. The very same wages can not be utilized to claim 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 earnings paid as far back as March 13, 2020. This retroactive provision supplies an opportunity for services to modify prior-year income tax return and get refunds.
Claiming the Credit: Companies can declare the ERC by reporting it on their work income tax return, usually Form 941. The excess can be refunded to the company if the credit surpasses the quantity of work taxes owed.
It is very important to note that the ERC provisions and eligibility criteria have progressed gradually. The very best course of action is to talk to a tax expert or go to the main IRS site for the most comprehensive and up-to-date info relating to the ERC, including any current legal modifications or updates.
To get approved for the ERC, a service must meet one of the following criteria:.
Business operations were fully or partially suspended due to a government order related to COVID-19.
The business experienced a considerable decline in gross receipts. For 2021, a significant decline is specified as a 20% decrease 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 invoices compared to the same quarter in 2019, or a 20% decrease in gross receipts compared to the right away preceding quarter.
The ERC is available to services of all sizes, consisting of tax-exempt companies, but there are some exceptions. Government entities and organizations that got a PPP loan may have constraints on declaring the credit.
The process for declaring the ERC involves completing the essential forms and consisting of the credit on your employment tax return (typically Form 941). The exact time it requires to process the credit can vary based upon numerous aspects, including the complexity of your business and the work of the internal revenue service. It’s suggested to consult with a tax professional for guidance specific to your scenario.
There are a number of companies that can help with the process of declaring the ERC. Some popular business that provide support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the information provided here is based upon general understanding and may not show the most current updates or modifications to the ERC. It is essential to speak with a tax professional or visit the official internal revenue service website for the most precise and current info relating to eligibility, claiming procedures, and available support.
Less than 100. If the company had 100 or less workers typically in 2019, then the credit is based.
on wages paid to all employees whether they in fact 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 company had more than 100 staff members usually in 2019, then the credit is.
enabled just for salaries paid to employees who did not work during the calendar quarter.
In both cases, “wages” consists of not just cash payments however also a part of the expense of employer.
offered health care. Cares Act Employee Retention Credit 2022
Employers can be instantly repaid for the credit by lowering the amount of payroll taxes they.