Lets talk first about Employee Retention Credit Reinstatement Act :
Our team here what do these people doing everyone in this space is helping teach people about ERC and uh always provide a lovely breakfast and have people truly find out about the program we ought to head to the space where we have the ability to show 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 hundreds of millions of dollars so these are duplicate copies of the letters that go to customers confirming that the check is on the method I indicate you know if you simply start to look at some of these here I suggest this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s just I suggest think of the number of actual 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 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 know the check is gone for sure which’s when they pay so they don’t pay anything up until they actually get the cash they do not pay bottom line Wonder trust anything up until this letter is confirmed the check is on the method they deposit it into their bank account and they can truly trust Wonder trust that the process has actually been completed and the number of you believe you have actually processed given that you started this we have to do with 35 000 of these for
about 6 billion dollars wow so plainly they understand what they’re doing and that’s what you need you require 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 Fantastic here you’re at my YouTube channel we’re talking about something truly essential today the worker retention credit which the majority of you have actually never ever heard of I certainly hadn’t become aware of it up until very just recently and learned a lot about it because this is most likely the most affordable cost of capital for any small company anywhere
anytime if you have employees in between 5 and five hundred so I’ve got the professional 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 simply call up your bank supervisor and state provide me a loan it does not 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 become yes the Ambassador and paid spokesperson for this I enjoy this program it’s disappearing soon you got to learn all about it let’s talk employee retention credit Josh Fox what is an ERC let’s just start there so throughout the Trump Administration when President Trump was enacted they created 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 nearly everybody 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.
fix the money money payroll tax refund alright go on sorry I simply need to make sure we got that point I suggest that’s a huge distinction a loan versus money cash I like cash cash that’s what we’re talking about alright 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 difficult check in the mail where you get real 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 an employee so I’m going to make the Assumption this cash is not for the owner not for people on the cap table not for shareholders it’s for employees right you had to have actually owned an organization but it’s based upon you having W-2 workers 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 qualified so you have to be on payroll in 2020 on the W-2 and you need to be on payroll for the first six 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 2 three and 4 of 2020 and you had quarters one 2 and three of 2021. fine 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 cash how much can you return per worker that was on a W-2 in those 6 quarters so the computation in 2020 to be precise Kevin is 50 of the employee’s income to an optimum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the employee’s income to a maximum of seven thousand per quarter how did that happen um they just changed the rules in.
2021 versus due to the fact that the mayhem 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 approximately five thousand Max and then what takes place 21 000 Max in 2021 oh that’s how you come up with twenty 6 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 money it is now there’s a caveat here the PPP cash would need to be decreased from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would reduce the 26 000 so what we’re seeing on average 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 money you would still get a million dollar in the mail from the IRS so it’s huge obviously now the big question is why does nobody understand about this since look when I first found out about this when I first fulfilled Josh you know I’ve got lots of financial investments in great deals of companies I’m a significant supporter for entrepreneurship in America and make lots of many financial investments in entrepreneurs of which lots of suffered through the pandemic when I first heard about this I called BS I don’t believe it due to the fact that 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 which were well should have and we utilized them sensibly to survive during the pandemic so when I became aware of this I said nah it can’t hold true but when I dug around I even called to my politician pals Guv Senators they didn’t learn about it I mean that’s how you know that’s how misinformation is that there’s no info out there then a lot of individuals informed me well you can’t get it due to the fact that you took the PPP likewise not real so let’s ask Josh why does nobody learn about the employee retention credit you understand what’s interesting you’re speaking about the banks Kevin since in the PPP loan procedure the federal government made it really clear that if you wanted a PPP loan you would call Wells Fargo Citibank Bank of America any of the huge banks in our country and they would process process in Canada a pre-pp loan there’s no loans in Canada by the way it’s just process process that’s all um and here there was mayhem because keep in mind in the initial cares act you could refrain from doing both programs so if you had actually done PPP you could not do ERC in the original program and when they altered the law in 2021 the banks were refraining from doing ERC because 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 truly she or he’s never ever done it in the past do the banks do it nope the banks do not do it the payroll business yeah some of them are doing it as a payroll company your accounting professional no your accountant’s never done this prior to unless you have an account that went into this company and bottom line my firm Kevin has stayed in business since 2009 and we have actually been working with the federal government and the state federal government to recover cash for Fortune 500 Fortune 1000 companies so a lot of our huge big corporate clients have actually worked with bottom line to recover other federal government programs we’ve done sales tax and use tax joblessness tax work opportunity tax credits research and development tax credits unclaimed home property tax all of these other government programs.
The staff member retention tax credit is a broad based refundable tax credit designed to motivate.
companies to keep employees on their payroll. The credit is 50% of up to $10,000 in salaries paid by an.
employer whose company is fully or partly suspended because of COVID-19 or whose gross invoices.
decrease by more than 50%.
1. The credit is offered to all employers regardless of size consisting of tax exempt companies. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
services who take Small company Loans.
2. To certify, the employer needs to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s service is fully or partially suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross invoices are listed below 50% of the similar quarter in 2019. As soon as the.
employer’s gross receipts go above 80% of a comparable quarter in 2019 they no longer certify.
after the end of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the certifying salaries paid up to $10,000 in overall.
It works for wages paid after March 13th and prior to December 31, 2020.
The definition of qualifying wages varies by whether an employer had, on average, more or less than.
100 workers in 2019.
Companies that focus on ERC filing assistance generally supply expertise and assistance to assist services navigate the complex procedure of claiming the credit. They can offer various services, including:.
How is the employee retention credit calculated? Employee Retention Credit Reinstatement Act
Eligibility Assessment: These companies will evaluate your service’s eligibility for the ERC based upon elements such as your industry, profits, and operations. They can assist determine if you fulfill the requirements for the credit and recognize the maximum credit quantity you can claim.
Paperwork and Computation: ERC filing services will help in collecting the necessary documents, such as payroll records and financial declarations, to support your claim. They will likewise assist compute the credit amount based on qualified salaries and other certifying costs.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for previous quarters, these companies can examine your previous payroll records and financials to identify potential chances for retroactive credits. They can help you amend prior income tax return to claim these refunds.
Filing Help: Companies concentrating on ERC filings will prepare and submit the necessary types and documentation in your place. This includes finishing Type 941 or any other required tax forms.
Compliance and Updates: ERC policies and assistance have actually progressed over time. These companies stay upgraded with the latest changes and guarantee that your filings abide by the most current guidelines. If the Internal revenue service demands additional info or conducts an audit associated to your ERC claim, they can likewise supply ongoing support.
It’s important to research study and vet any business offering ERC filing assistance to ensure their reliability and knowledge. Look for established companies with experience in tax and payroll services, or consider reaching out to trusted accounting companies or tax specialists who provide ERC filing assistance.
Bear in mind that while these business can supply valuable support, it’s constantly a good idea to have a fundamental understanding of the ERC requirements and procedure yourself. This will help you make informed choices and guarantee accurate filings.
The Staff Member 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 employees throughout the pandemic, even if their operations have actually been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to eligible companies, including for-profit companies, tax-exempt companies, and particular governmental entities. To certify, companies should fulfill one of two criteria:.
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 receipts. As pointed out earlier, for 2021, a significant decrease is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019, or a 20% decrease in gross receipts 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 amount is equal to a portion (approximately 70%) of qualified incomes paid to employees, consisting of specific health insurance expenditures. The optimum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, businesses that got a Paycheck Security Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 permits services to claim the ERC even if they got a PPP loan. However, the very same earnings can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and boosted, permitting qualified companies to declare the credit for qualified earnings paid as far back as March 13, 2020. This retroactive arrangement provides a chance for businesses to change prior-year tax returns and get refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their employment income tax return, normally Kind 941. The excess can be reimbursed to the employer if the credit goes beyond the quantity of work taxes owed.
It is essential to keep in mind that the ERC arrangements and eligibility criteria have actually developed in time. The very best course of action is to seek advice from a tax expert or go to the main internal revenue service site for the most current and in-depth details relating to the ERC, consisting of any recent legal changes or updates.
To get approved for the ERC, a business should fulfill one of the following criteria:.
Business operations were fully or partly suspended due to a government order related to COVID-19.
Business experienced a significant decrease in gross invoices. For 2021, a substantial decline is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decline in gross invoices compared to the immediately preceding quarter.
The ERC is available to companies of all sizes, consisting of tax-exempt organizations, but there are some exceptions. For instance, federal government entities and services that received a PPP loan might have limitations on declaring the credit.
The process for declaring the ERC involves completing the necessary types and including the credit on your employment income tax return (normally Form 941). The exact time it requires to process the credit can differ based upon numerous elements, including the complexity of your service and the work of the IRS. It’s recommended to seek advice from a tax expert for assistance specific to your scenario.
There are several business that can help with the process of declaring the ERC. Some well-known business that provide assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the details supplied here is based on basic knowledge and may not reflect the most recent updates or modifications to the ERC. It is very important to seek advice from a tax expert or visit the official internal revenue service site for the most updated and precise information regarding eligibility, declaring procedures, and offered support.
Less than 100. The credit is based if the employer had 100 or less staff members on average in 2019.
on incomes paid to all workers whether they really worked or not. In other words, 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 employees on average in 2019.
permitted just for earnings paid to staff members who did not work during the calendar quarter.
In both cases, “wages” includes not simply cash payments however also a part of the expense of company.
supplied healthcare. Employee Retention Credit Reinstatement Act
Companies can be immediately reimbursed for the credit by lowering the quantity of payroll taxes they.