Lets talk first about Employee Retention Credit And Form 7200 Advance :
Our team here what do these guys doing everybody in this space is assisting teach people about ERC and uh always provide a beautiful breakfast and have people actually learn more about the program we need to head to the space where we have the ability to show some of the checks that we are getting for business and I want to see that what is this this is uh numerous millions of dollars actually Kevin hundreds of countless dollars so these are replicate copies of the letters that go to customers confirming that the check is on the way I suggest you understand if you just start to take a 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 mean it’s just I indicate think about the number of real customers 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 confirmed and the check is on the mail in the mail from the IRS heading to the customer so that’s how you’re able to track it you know when you
get this you understand the check is opted for sure and that’s when they pay so they don’t pay anything up until they actually 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 truly rely on Wonder trust that the procedure has been ended up and how many you think you’ve processed because you began this we have to do with 35 000 of these for
about six billion dollars wow so clearly they understand what they’re doing and that’s what you need you require 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 essential today the employee retention credit which most of you have never heard of I certainly hadn’t heard of it until really just recently and found out a lot about it because this is most likely the lowest expense of capital for any small company anywhere
anytime if you have employees between five and five hundred so I’ve got the expert 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 call your bank supervisor and say offer me a loan it does not work there’s not a loan it’s an application and Josh is going to inform us all 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 very soon you got to find out all about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply begin there so during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act provided services three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly 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 cash money payroll tax refund okay go on sorry I simply have to ensure we got that point I indicate that’s a big difference a loan versus cash money I like cash cash that’s what we’re speaking 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 initial cares Act is the ERC and yes Kevin it is a lovely hard check in the mail where you get actual money from the IRS all right so let’s talk 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 had 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 a company however it’s based upon you having W-2 employees in America not 10.99. As long as you had W-2 workers 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 proper so there were six quarters the program was open well stroll us through the six quarters so you had quarters 2 three and 4 of 2020 and you had quarters one 2 and three of 2021. all right so that’s how it’s measured you have to be on the W-2 throughout that period now let’s talk my favorite part money just how much can you get back per staff member that was on a W-2 in those 6 quarters so the computation in 2020 to be precise Kevin is 50 of the worker’s salary to an optimum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the worker’s salary to a maximum of seven thousand per quarter how did that occur um they simply altered the rules in.
2021 versus since the turmoil 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 five thousand in twenty twenty that’s twenty six thousand dollars per worker that is since that’s a great deal of cash it is now there’s a caveat here the PPP cash would have to be lowered from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would minimize the 26 000 so what we’re seeing usually Kevin is if you took PPP cash somewhere around 10 thousand dollars an individual so let’s say hypothetically you owned a dining establishment 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 IRS so it’s huge certainly now the huge question is why does no one learn about this because look when I initially became aware of this when I first fulfilled Josh you know I have actually got lots of investments in great deals of business I’m a significant advocate for entrepreneurship in America and make lots of numerous financial investments in business owners of which numerous suffered through the pandemic when I initially became aware of this I called BS I do not believe it since I use 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 utilized them carefully to stay alive throughout the pandemic so when I heard about this I said nah it can’t be true however when I dug around I even called to my politician buddies Governor Senators they didn’t understand about it I indicate 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 since you took the PPP likewise not true so let’s ask Josh why does no one understand about the staff member retention credit you know what’s intriguing you’re discussing the banks Kevin because in the PPP loan procedure the federal government made it very 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 just procedure process that’s all um and here there was turmoil 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 initial 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 government never made it clear to anybody about how to.
do this does your CFO understand how to do this not really he or she’s never ever done it before 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 accounting professional no your accounting professional’s never ever done this prior to unless you have an account that entered into this service and bottom line my company Kevin has actually stayed in business since 2009 and we have actually been dealing with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 business so a great deal of our big huge business clients have actually dealt with bottom line to recover other federal 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 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 as much as $10,000 in wages paid by an.
Due to the fact that of COVID-19 or whose gross receipts, company whose service is completely or partially suspended.
decrease by more than 50%.
1. The credit is readily available to all companies regardless of size including tax exempt organizations. There are.
just 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
services who take Small company Loans.
2. To qualify, the employer needs to satisfy one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s service is completely or partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the equivalent quarter in 2019. Once the.
employer’s gross invoices go above 80% of an equivalent 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 certifying wages paid up to $10,000 in total.
It works for salaries paid after March 13th and prior to December 31, 2020.
The meaning of qualifying earnings differs by whether a company had, typically, basically than.
100 employees in 2019.
Business that concentrate on ERC filing help usually provide know-how and assistance to help organizations navigate the complicated process of claiming the credit. They can use different services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit And Form 7200 Advance
Eligibility Evaluation: These business will assess your organization’s eligibility for the ERC based on factors such as your market, earnings, and operations. They can assist identify if you meet the requirements for the credit and identify the maximum credit quantity you can claim.
Documents and Computation: ERC filing services will assist in collecting the needed paperwork, such as payroll records and financial statements, to support your claim. They will also help calculate the credit quantity based on qualified incomes and other qualifying costs.
Retroactive Claim Review: If you are eligible to declare the ERC for prior quarters, these companies can evaluate your past payroll records and financials to recognize potential chances for retroactive credits. They can assist you change prior income tax return to declare these refunds.
Filing Support: Business concentrating on ERC filings will prepare and send the needed forms and paperwork in your place. This consists of finishing Kind 941 or any other required tax forms.
Compliance and Updates: ERC policies and guidance have actually developed over time. These companies remain updated with the most recent changes and ensure that your filings abide by the most existing guidelines. They can also provide ongoing assistance if the IRS requests additional info or conducts an audit related to your ERC claim.
It is very important to research study and vet any business providing ERC filing assistance to guarantee their credibility and know-how. Try to find established companies with experience in tax and payroll services, or think about reaching out to relied on accounting companies or tax specialists who use ERC filing support.
Keep in mind that while these companies can provide valuable assistance, it’s always a good idea to have a basic understanding of the ERC requirements and process yourself. This will assist you make informed decisions and guarantee accurate filings.
The Worker 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 services to retain and pay their employees throughout the pandemic, even if their operations have actually been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is available to qualified employers, including for-profit companies, tax-exempt companies, and particular governmental entities. To certify, companies must fulfill one of two requirements:.
The business operations were totally or partly suspended due to a federal government order related to COVID-19.
The business experienced a considerable decrease in gross receipts. As pointed out earlier, for 2021, a significant decrease is specified as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decrease 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 quantity amounts to a percentage (approximately 70%) of qualified wages paid to staff members, consisting of certain health insurance costs. 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: Initially, companies that received an Income Defense Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 permits services to declare the ERC even if they received a PPP loan. Nevertheless, the same salaries can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and enhanced, allowing eligible employers to claim the credit for certified salaries paid as far back as March 13, 2020. This retroactive arrangement offers a chance for services to change prior-year tax returns and get refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their work income tax return, normally Kind 941. The excess can be refunded to the company if the credit exceeds the amount of employment taxes owed.
It’s important to note that the ERC provisions and eligibility requirements have progressed with time. The best strategy is to consult with a tax professional or check out the official internal revenue service website for the most in-depth and up-to-date info concerning the ERC, consisting of any current legal modifications or updates.
To get approved for the ERC, a service needs to fulfill one of the following requirements:.
The business operations were completely or partially suspended due to a federal government order related to COVID-19.
The business experienced a significant decrease in gross invoices. For 2021, a significant decrease is specified as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
The ERC is available to services of all sizes, consisting of tax-exempt organizations, but there are some exceptions. For instance, government entities and companies that received a PPP loan might have limitations on declaring the credit.
The process for declaring the ERC includes finishing the essential types and including the credit on your employment tax return (normally Kind 941). The exact time it requires to process the credit can vary based upon several factors, consisting of the intricacy of your company and the work of the internal revenue service. It’s suggested to speak with a tax professional for guidance specific to your scenario.
There are several companies that can aid with the procedure of claiming the ERC. These consist of accounting firms, tax advisory services, and payroll company. Some widely known business that use assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research and call these companies directly to inquire about their charges and services.
Please note that the details supplied here is based upon general knowledge and may not show the most current updates or modifications to the ERC. It is essential to talk to a tax expert or check out the main IRS site for the most updated and precise info concerning eligibility, declaring procedures, and readily available help.
Less than 100. The credit is based if the employer had 100 or fewer staff members on average in 2019.
on wages paid to all employees whether they in fact worked or not. To put it simply, even if the.
staff members worked full-time and made money for full-time work, the company still gets the credit.
Greater than 100. If the employer had more than 100 workers on average in 2019, then the credit is.
permitted only for wages paid to employees who did not work during the calendar quarter.
In both cases, “incomes” consists of not just cash payments however likewise a part of the cost of employer.
provided health care. Employee Retention Credit And Form 7200 Advance
Employers can be right away reimbursed for the credit by decreasing the amount of payroll taxes they.