Lets talk first about Employee Retention Credit Cares Act 2021 :
Our team here what do these people doing everyone in this space is assisting teach people about ERC and uh constantly offer a lovely breakfast and have individuals actually learn about the program we should head to the space 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 hundreds of countless dollars literally Kevin numerous millions of dollars so these are replicate copies of the letters that go to clients confirming that the check is on the way I suggest you know if you simply begin 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 suggest it’s just I indicate think about how many actual customers that went through the program yeah this is the very end this is the party at the end when the check is validated the numbers are confirmed and the check is on the mail in the mail from the internal revenue service heading to the customer 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 which’s when they pay so they do not pay anything until they actually get the cash they do not pay bottom line Wonder trust anything till this letter is validated the check is on the way they transfer it into their checking account and they can truly rely on Wonder trust that the process has been ended up and how many you think you have actually processed given that you began this we have to do with 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 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 Wonderful here you’re at my YouTube channel we’re talking about something actually important today the worker retention credit which most of you have never ever heard of I certainly had not heard of it until very just recently and discovered a lot about it since this is most likely the lowest cost of capital for any small company anywhere
anytime if you have employees in between 5 and five hundred so I’ve got the expert with me this is Josh Fox he’s the founder and CEO of bottom line Principles they’re the largest processor of these ERC credits this is a 170 page program so it’s challenging this isn’t like PPP we just call your bank supervisor and state give 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 love this program it’s going away soon you got to discover everything 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 created the cares Act and the cares act offered companies 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 distinction right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the money cash payroll tax refund all right go on sorry I just have to ensure we got that point I mean that’s a huge distinction a loan versus money cash 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 stunning hard check in the mail where you get actual money from the internal revenue service all right so let’s talk about how it works since it sounds like to me if it’s a if it’s employee retention credit that individual had to be an employee so I’m going to make the Assumption this money is not for the owner not for people on the cap table not for shareholders it’s for workers right you needed to have owned a service however it’s based upon 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 very first six months of 2021 on the W-2 proper so there were six quarters the program was open well walk us through the 6 quarters so you had quarters two 3 and four of 2020 and you had quarters one 2 and 3 of 2021. okay so that’s how it’s measured you need to be on the W-2 during that duration now let’s talk my favorite part cash just how much can you get back per staff member that was on a W-2 in those 6 quarters so the calculation in 2020 to be specific Kevin is 50 of the staff member’s income to an optimum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s income to a maximum of seven thousand per quarter how did that happen um they simply altered the rules in.
2021 versus due to the fact that the turmoil of the pandemic so they wished 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 up to five thousand Max and then what happens 21 000 Max in 2021 oh that’s how you create twenty 6 thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty 6 thousand dollars per employee that is because that’s a great deal of cash it is now there’s a caveat here the PPP money would have to be reduced from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would reduce the 26 000 so what we’re seeing on average Kevin is if you took PPP cash someplace around ten 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 staff members and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s substantial clearly now the huge question is why does no one know about this because look when I initially found out about this when I first satisfied Josh you understand I have actually got lots of investments in great deals of companies I’m a significant supporter for entrepreneurship in America and make numerous numerous investments in business owners of which numerous suffered through the pandemic when I initially heard about this I called BS I don’t believe it because I use 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 should have and we utilized them sensibly to stay alive throughout the pandemic so when I found out about this I stated nah it can’t be true however when I dug around I even called to my politician good friends Governor Senators they didn’t learn about it I indicate 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 since you took the PPP likewise not real so let’s ask Josh why does nobody understand about the worker retention credit you understand 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 very clear that if you wanted a PPP loan you would call Wells Fargo Citibank Bank of America any of the big banks in our country and they would process procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s just procedure procedure that’s all um and here there was mayhem due to the fact that keep in mind in the original cares act you could refrain from doing both programs so if you had done PPP you could refrain from doing ERC in the original program and when they altered the law in 2021 the banks were not doing ERC due to the fact that it’s not alone so you’re getting a tax refund so the government never ever made it clear to anybody about how to.
do this does your CFO know how to do this not actually he or she’s never done it in the past 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 done this before unless you have an account that entered into this service and bottom line my company Kevin has been in business since 2009 and we’ve been working with the federal government and the state federal government to recover cash for Fortune 500 Fortune 1000 companies so a great deal of our huge huge corporate clients have dealt with bottom line to recuperate other government programs we have actually done sales tax and use 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 developed to encourage.
companies to keep staff members on their payroll. The credit is 50% of as much as $10,000 in salaries paid by an.
company whose service is fully or partially suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is readily available to all companies despite size including tax exempt organizations. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) small.
organizations who take Small company Loans.
2. To certify, the employer has to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s business is fully or partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross invoices are listed below 50% of the comparable quarter in 2019. When the.
employer’s gross invoices exceed 80% of a similar 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 qualifying earnings paid up to $10,000 in overall.
It is effective for wages paid after March 13th and prior to December 31, 2020.
The definition of certifying earnings varies by whether a company had, usually, basically than.
100 staff members in 2019.
Companies that focus on ERC filing assistance typically provide know-how and assistance to help services navigate the complicated procedure of claiming the credit. They can provide numerous services, including:.
How is the employee retention credit calculated? Employee Retention Credit Cares Act 2021
Eligibility Assessment: These business will assess your service’s eligibility for the ERC based upon factors such as your industry, income, and operations. If you satisfy the requirements for the credit and identify the optimum credit amount you can claim, they can assist identify.
Paperwork and Calculation: ERC filing services will assist in gathering the essential documentation, such as payroll records and financial declarations, to support your claim. They will likewise help calculate the credit quantity based on eligible salaries and other certifying costs.
Retroactive Claim Evaluation: If you are eligible to claim the ERC for prior quarters, these business can examine your past payroll records and financials to recognize prospective chances for retroactive credits. They can assist you amend previous tax returns to declare these refunds.
Filing Support: Companies specializing in ERC filings will prepare and submit the required forms and documents in your place. This includes completing Kind 941 or any other required tax forms.
Compliance and Updates: ERC guidelines and guidance have progressed gradually. These business stay upgraded with the latest changes and ensure that your filings adhere to the most present guidelines. If the IRS requests extra details or conducts an audit associated to your ERC claim, they can also provide ongoing support.
It is essential to research and veterinarian any company providing ERC filing assistance to guarantee their reliability and proficiency. Look for established firms with experience in tax and payroll services, or think about reaching out to relied on accounting firms or tax specialists who provide ERC submitting support.
Remember that while these companies can provide important assistance, it’s always a great idea to have a basic understanding of the ERC requirements and procedure yourself. This will assist you make informed choices and ensure accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief procedures. The objective of the ERC is to encourage companies to retain and pay their staff members throughout the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to eligible companies, including for-profit services, tax-exempt companies, and certain governmental entities. To qualify, companies should meet one of two requirements:.
Business operations were totally or partially suspended due to a government order related to COVID-19.
The business experienced a considerable decline in gross invoices. As mentioned earlier, for 2021, a substantial decrease is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decrease is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decline in gross receipts compared to the right away preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit amount amounts to a portion (up to 70%) of qualified incomes paid to workers, including particular health insurance costs. The maximum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, services that got an Income Protection Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 enables organizations to declare the ERC even if they received a PPP loan. However, the same salaries can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively broadened and enhanced, permitting eligible companies to declare the credit for qualified incomes paid as far back as March 13, 2020. This retroactive provision supplies an opportunity for companies to modify prior-year tax returns and receive refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their work tax returns, typically Form 941. If the credit goes beyond the quantity of employment taxes owed, the excess can be reimbursed to the company.
It is necessary to keep in mind that the ERC arrangements and eligibility requirements have actually progressed in time. The very best strategy is to seek advice from a tax expert or visit the official internal revenue service site for the most comprehensive and up-to-date info concerning the ERC, consisting of any recent legal changes or updates.
To qualify for the ERC, a service must satisfy 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 substantial decrease in gross invoices. For 2021, a significant decline is specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decline in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the immediately preceding quarter.
The ERC is offered to services of all sizes, including tax-exempt organizations, but there are some exceptions. Federal government entities and services that received a PPP loan might have restrictions on declaring the credit.
The process for claiming the ERC includes completing the necessary kinds and including the credit on your work income tax return (typically Form 941). The exact time it requires to process the credit can differ based on a number of aspects, including the intricacy of your business and the workload of the IRS. It’s recommended to seek advice from a tax professional for guidance particular to your circumstance.
There are several companies that can help with the procedure of declaring the ERC. Some well-known companies that provide support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the details provided here is based upon general understanding and may not reflect the most recent updates or changes to the ERC. It is essential to consult with a tax expert or check out the official IRS site for the most current and accurate info regarding eligibility, claiming treatments, and available assistance.
Less than 100. The credit is based if the company had 100 or fewer employees on average in 2019.
on salaries paid to all staff members whether they really worked or not. To put it simply, even if the.
staff members worked full time and earned money for full-time work, the company still gets the credit.
Greater than 100. The credit is if the company had more than 100 workers on average in 2019.
allowed just for incomes paid to employees who did not work throughout the calendar quarter.
In both cases, “salaries” consists of not just money payments however likewise a portion of the expense of company.
offered healthcare. Employee Retention Credit Cares Act 2021
Companies can be immediately repaid for the credit by decreasing the quantity of payroll taxes they.