Lets talk first about Paycheck Protection Program And Employee Retention Credit :
Our team here what do these people doing everyone in this space is assisting teach individuals about ERC and uh always provide a beautiful breakfast and have individuals actually learn more about the program we ought to head to the room where we are able to show some of the checks that we are getting for companies and I ‘d like to see that what is this this is uh numerous millions of dollars actually Kevin numerous millions of dollars so these are replicate copies of the letters that go to clients verifying that the check is on the way I suggest you understand if you simply start to 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 indicate it’s simply I suggest think of the number of actual clients 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 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 understand when you
get this you understand the check is chosen sure which’s when they pay so they don’t pay anything up until they in fact receive the cash they do not pay bottom line Wonder trust anything until this letter is validated the check is on the method they deposit it into their bank account and they can really rely on Wonder trust that the procedure has been ended up and how many you think you have actually processed because 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 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 Wonderful here you’re at my YouTube channel we’re discussing something really essential today the employee retention credit which most of you have never heard of I definitely hadn’t become aware of it up until really just 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 employees between five and five hundred so I’ve got the professional with me this is Josh Fox he’s the founder and CEO of bottom line Concepts they’re the largest processor of these ERC credits this is a 170 page program so it’s not easy this isn’t like PPP we just call up your bank manager and say give 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 have actually become yes the Ambassador and paid spokesperson for this I enjoy this program it’s going away soon you got to learn everything about it let’s talk worker retention credit Josh Fox what is an ERC let’s simply start there so throughout the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act used services three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everybody 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 cash cash payroll tax refund alright go on sorry I simply need to ensure we got that point I indicate that’s a big difference a loan versus money cash I like cash 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 original cares Act is the ERC and yes Kevin it is a stunning difficult check in the mail where you get real money from the internal revenue service all right so let’s discuss how it works since it seems like to me if it’s a if it’s worker retention credit that individual had to be a worker so I’m going to make the Assumption this cash is not for the owner not for people on the cap table not for investors it’s for staff members right you needed to have actually owned a company however 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 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 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 two 3 and four of 2020 and you had quarters one two and 3 of 2021. alright so that’s how it’s measured you need to be on the W-2 throughout that duration now let’s talk my favorite part money just how much can you get back per employee that was on a W-2 in those six quarters so the computation in 2020 to be specific Kevin is 50 of the worker’s wage to a maximum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the staff member’s wage 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 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 approximately 5 thousand Max and after that what takes place 21 000 Max in 2021 oh that’s how you come up with twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty 6 thousand dollars per worker that is since that’s a great deal of money it is now there’s a caution here the PPP cash would need 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 money somewhere around 10 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 big obviously now the big concern is why does no one learn about this since appearance when I first became aware of this when I initially fulfilled Josh you know I’ve got lots of investments in lots of business I’m a significant supporter for entrepreneurship in America and make many lots of investments in business owners of which many suffered through the pandemic when I first found out about this I called BS I don’t think it since 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 which were well been worthy of and we used them sensibly to survive throughout the pandemic so when I found out about this I said nah it can’t hold true however when I dug around I even called to my politician good friends Guv Senators they didn’t understand about it I imply that’s how you know that’s how false information is that there’s no information out there then a lot of people informed me well you can’t get it due to the fact that you took the PPP also not true so let’s ask Josh why does no one know about the worker retention credit you know what’s intriguing you’re discussing the banks Kevin because in the PPP loan process the federal government made it really 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 procedure 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 mayhem due to the fact that remember in the original cares act you might not do both programs so if you had actually done PPP you might refrain from doing ERC in the initial 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 made it clear to any person about how to.
do this does your CFO know 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 business yeah a few of them are doing it as a payroll business your accounting professional no your accounting professional’s never ever done this before unless you have an account that went into this business and bottom line my company Kevin has stayed in business considering that 2009 and we’ve been working with the federal government and the state government to recuperate money for Fortune 500 Fortune 1000 companies so a lot of our huge huge corporate clients have actually dealt with bottom line to recover other government programs we’ve done sales tax and utilize tax unemployment tax work chance tax credits research and development tax credits unclaimed home property tax all of these other federal government programs.
The staff member retention tax credit is a broad based refundable tax credit designed to motivate.
companies to keep staff members on their payroll. The credit is 50% of up to $10,000 in earnings paid by an.
Because of COVID-19 or whose gross receipts, employer whose organization is totally or partly suspended.
decline by more than 50%.
1. The credit is offered to all companies no matter size including tax exempt organizations. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) little.
companies who take Small Business Loans.
2. To qualify, the employer needs to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s organization is totally or partially suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross receipts are listed below 50% of the equivalent quarter in 2019. Once the.
company’s gross receipts exceed 80% of a similar quarter in 2019 they no longer certify.
after completion of that quarter.
Computation of the Credit.
The quantity of the credit is 50% of the qualifying wages paid up to $10,000 in total.
It is effective for earnings paid after March 13th and before December 31, 2020.
The meaning of qualifying wages differs by whether a company had, usually, more or less than.
100 staff members in 2019.
Business that concentrate on ERC filing support typically supply competence and support to help services navigate the complex procedure of declaring the credit. They can use different services, including:.
How is the employee retention credit calculated? Paycheck Protection Program And Employee Retention Credit
Eligibility Assessment: These business will evaluate your business’s eligibility for the ERC based on aspects such as your industry, earnings, and operations. If you satisfy the requirements for the credit and identify the optimum credit amount you can declare, they can help figure out.
Documents and Estimation: ERC filing services will help in collecting the essential documents, such as payroll records and financial declarations, to support your claim. They will also assist calculate the credit quantity based upon eligible earnings and other qualifying expenses.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for previous quarters, these business can examine your past payroll records and financials to recognize prospective opportunities for retroactive credits. They can assist you modify previous tax returns to claim these refunds.
Filing Help: Companies specializing in ERC filings will prepare and send the necessary forms and documentation on your behalf. This includes finishing Form 941 or any other required tax forms.
Compliance and Updates: ERC regulations and guidance have actually progressed over time. These business remain upgraded with the latest modifications and guarantee that your filings abide by the most present guidelines. They can likewise supply continuous assistance if the IRS requests extra information or performs an audit related to your ERC claim.
It is very important to research and vet any business providing ERC filing support to guarantee their trustworthiness and knowledge. Try to find recognized firms with experience in tax and payroll services, or consider connecting to trusted accounting companies or tax specialists who provide ERC submitting support.
Keep in mind that while these business can provide important support, it’s always an excellent idea to have a basic understanding of the ERC requirements and procedure yourself. This will help you make informed decisions and guarantee precise filings.
The Staff Member 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 encourage companies to maintain and pay their workers during the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to eligible companies, consisting of for-profit services, tax-exempt companies, and particular governmental entities. To qualify, companies must meet one of two requirements:.
The business operations were completely or partly suspended due to a federal government order related to COVID-19.
The business experienced a substantial decline in gross receipts. As pointed out previously, for 2021, a significant decrease is specified as a 20% decline in gross invoices 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 same quarter in 2019, or a 20% decrease in gross invoices 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 amount amounts to a percentage (up to 70%) of qualified earnings paid to employees, consisting of particular health insurance expenditures. The optimum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, organizations that received a Paycheck Protection Program (PPP) loan were not eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 enables businesses to declare the ERC even if they got a PPP loan. The very same salaries can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and enhanced, allowing eligible employers to claim the credit for qualified wages paid as far back as March 13, 2020. This retroactive provision offers a chance for organizations to amend prior-year income tax return and get refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their employment income tax return, generally Kind 941. If the credit exceeds the amount of employment taxes owed, the excess can be refunded to the employer.
It is essential to keep in mind that the ERC provisions and eligibility criteria have actually developed with time. The best course of action is to consult with a tax expert or check out the main IRS website for the most comprehensive and up-to-date info relating to the ERC, consisting of any current legislative modifications or updates.
To qualify for the ERC, a company must meet one of the following requirements:.
The business operations were completely or partly suspended due to a government order related to COVID-19.
The business experienced a considerable decline in gross receipts. For 2021, a considerable decline is specified as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a considerable decrease is specified as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decline in gross invoices compared to the right away preceding quarter.
The ERC is offered to businesses of all sizes, consisting of tax-exempt organizations, but there are some exceptions. For example, government entities and companies that got a PPP loan might have constraints on declaring the credit.
The process for declaring the ERC includes completing the needed types and including the credit on your employment tax return (typically Kind 941). The exact time it requires to process the credit can vary based upon a number of elements, including the complexity of your company and the work of the internal revenue service. It’s suggested to speak with a tax professional for assistance specific to your circumstance.
There are numerous companies that can assist with the procedure of claiming the ERC. Some well-known business that provide support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the info provided here is based on general understanding and may not show the most current updates or modifications to the ERC. It is essential to consult with a tax professional or check out the official IRS site for the most current and precise details relating to eligibility, claiming treatments, and readily available support.
Less than 100. If the company had 100 or fewer staff members on average in 2019, then the credit is based.
on earnings paid to all workers whether they really worked or not. To put it simply, even if the.
workers worked full-time and earned money for full-time work, the company still gets the credit.
Greater than 100. The credit is if the employer had more than 100 staff members on average in 2019.
allowed only for incomes paid to employees who did not work throughout the calendar quarter.
In both cases, “salaries” includes not simply money payments but likewise a part of the expense of company.
offered healthcare. Paycheck Protection Program And Employee Retention Credit
Companies can be instantly repaid for the credit by decreasing the amount of payroll taxes they.