Lets talk first about Employee Retention Credit And Payroll Tax Deferral :
Our group here what do these people doing everybody in this room is assisting teach individuals about ERC and uh constantly offer a stunning breakfast and have people really learn more about the program we should head to the room where we are able to show some of the checks that we are getting for business and I ‘d like to see that what is this this is uh hundreds of millions of dollars literally Kevin hundreds of countless dollars so these are replicate copies of the letters that go to customers validating that the check is on the way I suggest you know if you simply start to take a look at a few 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 mean consider the number of real 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 internal revenue service heading to the customer so that’s how you’re able to track it you understand when you
get this you understand the check is gone for sure which’s when they pay so they don’t pay anything up until they actually get the money they don’t pay bottom line Wonder trust anything till this letter is validated the check is on the way they deposit it into their savings account and they can genuinely trust Wonder trust that the procedure has actually been finished and how many you believe you’ve processed because you started this we have to do with 35 000 of these for
about 6 billion dollars wow so clearly they know what they’re doing and that’s what you need you need experts 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 speaking about something actually crucial today the worker retention credit which the majority of you have never ever become aware of I definitely hadn’t heard of it till extremely recently and discovered a lot about it due to the fact that this is probably the lowest expense of capital for any small business anywhere
anytime if you have staff members in between 5 and five hundred so I’ve got the specialist 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 just phone your bank supervisor and state offer me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to tell all of us 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 begin there so during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act used organizations 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everyone it makes a huge distinction right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
remedy the cash cash payroll tax refund alright go on sorry I just have to make certain we got that point I suggest that’s a huge difference a loan versus money cash I like money cash that’s what we’re speaking about okay 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 gorgeous tough 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 seems 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 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 an organization however it’s based on you having W-2 workers 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 6 months of 2021 on the W-2 correct so there were 6 quarters the program was open well walk us through the six quarters so you had quarters two 3 and 4 of 2020 and you had quarters one 2 and three of 2021. okay so that’s how it’s determined you need to be on the W-2 during that duration now let’s talk my favorite part cash how much can you return per staff member that was on a W-2 in those 6 quarters so the estimation in 2020 to be precise Kevin is 50 of the staff member’s salary to an optimum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the employee’s wage to an optimum of seven thousand per quarter how did that take place um they simply altered the rules in.
2021 versus since the chaos of the pandemic so they wanted 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 after that 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 six thousand dollars per employee that is since that’s a great deal of money it is now there’s a caveat here the PPP money would have to be lowered from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would minimize the 26 000 so what we’re seeing on average Kevin is if you took PPP money somewhere around 10 thousand dollars an individual so let’s say hypothetically you owned a dining establishment in New york city City where I’m from and you had a hundred workers and you took PPP money you would still get a million dollar in the mail from the internal revenue service so it’s big obviously now the big question is why does no one know about this since look when I first became aware of this when I first satisfied Josh you know I’ve got great deals of financial investments in lots of companies I’m a significant advocate for entrepreneurship in America and make many many financial investments in entrepreneurs of which numerous suffered through the pandemic when I initially became aware of this I called BS I do not believe it because I utilize the PPP we went through the cash center Banks to get it it was very easy to do we had our CEOs call the banks they got their loans and that were well been worthy of and we used them wisely to stay alive throughout the pandemic so when I heard about this I stated nah it can’t hold true but when I dug around I even called to my politician good friends Guv Senators they didn’t learn about it I imply 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 because you took the PPP likewise not true so let’s ask Josh why does nobody know about the worker retention credit you understand what’s intriguing you’re discussing the banks Kevin due to the fact that 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 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 just process procedure that’s all um and here there was turmoil because remember in the original cares act you might not do both programs so if you had done PPP you could not do ERC in the original program and when they altered the law in 2021 the banks were not doing ERC because it’s not alone so you’re getting a tax refund so the federal government never ever made it clear to any person about how to.
do this does your CFO understand how to do this not actually 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 a few of them are doing it as a payroll business your accountant no your accountant’s never ever done this prior to unless you have an account that entered into this company and bottom line my firm Kevin has actually been in business since 2009 and we have actually been working with the federal government and the state government to recuperate money for Fortune 500 Fortune 1000 business so a great deal of our big huge corporate clients have dealt with bottom line to recover other federal government programs we’ve done sales tax and utilize tax unemployment tax work opportunity tax credits research and development tax credits unclaimed home property tax all of these other federal government programs.
The employee 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 approximately $10,000 in incomes paid by an.
Due to the fact that of COVID-19 or whose gross receipts, employer whose business is totally or partly suspended.
decrease by more than 50%.
1. The credit is available to all companies no matter size including tax exempt organizations. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) small.
services who take Small company Loans.
2. To certify, the company has to satisfy one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s business is fully or partially suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross receipts are listed below 50% of the equivalent quarter in 2019. As soon as the.
employer’s gross receipts go above 80% of a similar quarter in 2019 they no longer qualify.
after the end of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the qualifying salaries paid up to $10,000 in total.
It works for incomes paid after March 13th and before December 31, 2020.
The definition of qualifying salaries differs by whether a company had, typically, basically than.
100 staff members in 2019.
Business that focus on ERC filing support typically provide knowledge and support to help companies navigate the intricate procedure of declaring the credit. They can provide various services, including:.
How is the employee retention credit calculated? Employee Retention Credit And Payroll Tax Deferral
Eligibility Assessment: These companies will assess your company’s eligibility for the ERC based on elements such as your industry, earnings, and operations. They can assist determine if you fulfill the requirements for the credit and recognize the maximum credit amount you can declare.
Paperwork and Estimation: ERC filing services will help in collecting the needed paperwork, such as payroll records and financial statements, to support your claim. They will likewise assist calculate the credit quantity based upon qualified incomes and other qualifying expenses.
Retroactive Claim Review: If you are qualified to claim the ERC for prior quarters, these companies can evaluate your past payroll records and financials to recognize potential opportunities for retroactive credits. They can assist you modify previous income tax return to declare these refunds.
Filing Help: Business specializing in ERC filings will prepare and send the necessary kinds and documentation in your place. This consists of finishing Type 941 or any other necessary tax return.
Compliance and Updates: ERC policies and assistance have actually progressed over time. These companies remain upgraded with the current changes and ensure that your filings comply with the most current guidelines. If the Internal revenue service requests additional details or carries out an audit associated to your ERC claim, they can likewise offer continuous assistance.
It is necessary to research study and vet any business offering ERC filing support to guarantee their reliability and proficiency. Search for established firms with experience in tax and payroll services, or think about connecting to trusted accounting firms or tax professionals who provide ERC submitting assistance.
Bear in mind that while these business can supply important support, it’s always a good concept to have a basic understanding of the ERC requirements and process yourself. This will assist you make informed decisions and ensure precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief measures. The goal of the ERC is to motivate companies to maintain 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 readily available to qualified employers, including for-profit organizations, tax-exempt companies, and certain governmental entities. To qualify, employers must meet one of two requirements:.
Business operations were fully or partially suspended due to a federal government order related to COVID-19.
Business experienced a considerable decrease in gross receipts. As mentioned earlier, for 2021, a substantial decline is defined as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decrease 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 workers, consisting of certain health insurance expenses. 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, organizations that got an Income Protection Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 permits organizations to declare the ERC even if they got a PPP loan. The same salaries can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively broadened and improved, allowing qualified employers to declare the credit for certified salaries paid as far back as March 13, 2020. This retroactive provision provides an opportunity for businesses to change prior-year tax returns and get refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their employment income tax return, generally Kind 941. The excess can be reimbursed to the employer if the credit surpasses the amount of employment taxes owed.
It’s important to keep in mind that the ERC provisions and eligibility criteria have actually progressed over time. The best course of action is to consult with a tax professional or check out the main internal revenue service website for the most in-depth and current information regarding the ERC, consisting of any current legal modifications or updates.
To get approved for the ERC, an organization must meet one of the following requirements:.
The business operations were totally or partly suspended due to a government order related to COVID-19.
Business experienced a significant decrease in gross invoices. For 2021, a significant decrease is defined as a 20% decrease in gross receipts 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% decrease in gross receipts compared to the right away preceding quarter.
The ERC is readily available to organizations of all sizes, consisting of tax-exempt organizations, but there are some exceptions. For instance, government entities and services that received a PPP loan might have limitations on declaring the credit.
The process for claiming the ERC involves finishing the necessary kinds and including the credit on your work tax return (generally Type 941). The exact time it takes to process the credit can differ based upon a number of aspects, including the complexity of your organization and the workload of the IRS. It’s suggested to speak with a tax professional for guidance particular to your situation.
There are a number of companies that can aid with the process of claiming the ERC. These consist of accounting companies, tax advisory services, and payroll company. Some popular companies that offer help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research study and contact these companies directly to inquire about their services and fees.
Please note that the info supplied here is based on general knowledge and might not reflect the most recent updates or modifications to the ERC. It is essential to consult with a tax expert or visit the main IRS site for the most current and precise information concerning eligibility, declaring procedures, and offered assistance.
Less than 100. If the company had 100 or fewer workers typically in 2019, then the credit is based.
on incomes paid to all workers whether they in fact worked or not. In other words, even if the.
employees worked full-time and made money for full time work, the company still gets the credit.
Greater than 100. The credit is if the company had more than 100 employees on average in 2019.
allowed just for salaries paid to employees who did not work during the calendar quarter.
In both cases, “earnings” consists of not just cash payments but also a portion of the expense of employer.
provided health care. Employee Retention Credit And Payroll Tax Deferral
Employers can be instantly reimbursed for the credit by lowering the quantity of payroll taxes they.