Lets talk first about Square Payroll Employee Retention Credit :
Our group here what do these people doing everybody in this space is helping teach individuals about ERC and uh always supply a lovely breakfast and have people truly learn more about the program we must head to the room where we are able to show some of the checks that we are getting for business and I wish to see that what is this this is uh hundreds of millions of dollars actually Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to clients verifying that the check is on the method I suggest you understand if you simply begin to 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 imply it’s just I mean think about how many 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 verified and the check is on the mail in the mail from the internal revenue service heading to the consumer so that’s how you have the ability to track it you understand when you
get this you understand the check is gone for sure and that’s when they pay so they do not pay anything until they really 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 checking account and they can really rely on Wonder trust that the procedure has been finished and the number of you think you’ve processed since you started this we have to do with 35 000 of these for
about 6 billion dollars wow so plainly they know what they’re doing and that’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 discussing something actually essential today the employee retention credit which the majority of you have never heard of I definitely hadn’t heard of it until really recently and found out a lot about it because this is probably the lowest expense of capital for any small business anywhere
anytime if you have workers between 5 and five hundred so I have actually got the specialist 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 hard this isn’t like PPP we just contact your bank manager and say give 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 have actually ended up being yes the Ambassador and paid representative for this I love this program it’s going away very soon you got to find out all about it let’s talk worker retention credit Josh Fox what is an ERC let’s simply begin there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act offered businesses 3 chances 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 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 okay go on sorry I just need to make sure we got that point I imply that’s a huge distinction a loan versus cash money 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 beautiful hard check in the mail where you get actual cash from the IRS all right so let’s speak about how it works due to the fact that it sounds like to me if it’s a if it’s worker retention credit that individual 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 a company but it’s based on you having W-2 employees 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 need to be on payroll for the first 6 months of 2021 on the W-2 right so there were 6 quarters the program was open well stroll us through the 6 quarters so you had quarters two 3 and 4 of 2020 and you had quarters one two and three of 2021. fine so that’s how it’s measured you need to be on the W-2 during that period now let’s talk my preferred part cash just how much can you get back per employee that was on a W-2 in those 6 quarters so the computation in 2020 to be specific Kevin is 50 of the staff member’s wage to an optimum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers increased to 70 of the employee’s salary to an optimum of seven thousand per quarter how did that take place um they just changed the rules in.
2021 versus since the turmoil 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 as much as five thousand Max and after that what happens 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 six thousand dollars per employee that is because that’s a lot of money it is now there’s a caveat here the PPP cash would have to be minimized 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 cash 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 huge clearly now the big question is why does no one know about this due to the fact that look when I first heard about this when I initially satisfied Josh you know I have actually got lots of investments in lots of companies I’m a significant supporter for entrepreneurship in America and make numerous many investments in business owners of which many suffered through the pandemic when I initially found out about this I called BS I do not believe it due to the fact that I use the PPP we went through the cash center Banks to get it it was really easy to do we had our CEOs call the banks they got their loans and that were well should have and we used them wisely to stay alive throughout the pandemic so when I became aware of this I said nah it can’t hold true but when I dug around I even contacted us to my politician buddies Governor Senators they didn’t learn 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 told me well you can’t get it because you took the PPP likewise not true so let’s ask Josh why does no one understand about the worker retention credit you know what’s interesting you’re talking about the banks Kevin since in the PPP loan procedure the federal government made it extremely clear that if you wanted 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 mayhem due to the fact that remember in the original cares act you might refrain from doing both programs so if you had actually 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 federal government never ever made it clear to anyone about how to.
do this does your CFO know how to do this not really she or he’s never ever done it before do the banks do it nope the banks don’t do it the payroll companies yeah a few of them are doing it as a payroll company your accountant no your accounting professional’s never ever done this prior to unless you have an account that went into this company and bottom line my firm Kevin has actually stayed in business since 2009 and we have actually been dealing with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 companies so a lot of our big huge corporate clients have actually worked with bottom line to recover other federal government programs we have actually 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 federal government programs.
The employee retention tax credit is a broad based refundable tax credit created to motivate.
employers to keep workers on their payroll. The credit is 50% of as much as $10,000 in salaries paid by an.
company whose organization is fully or partly suspended because of COVID-19 or whose gross invoices.
decrease by more than 50%.
1. The credit is available to all companies regardless of size including tax exempt organizations. There are.
just two exceptions: (1) state and city governments and their instrumentalities and (2) little.
businesses who take Small Business Loans.
2. To qualify, the employer has to satisfy one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s organization is fully or partly 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 equivalent quarter in 2019. When the.
company’s gross receipts go above 80% of an equivalent 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 qualifying earnings paid up to $10,000 in total.
It is effective for earnings paid after March 13th and before December 31, 2020.
The definition of qualifying incomes varies by whether an employer had, on average, more or less than.
100 staff members in 2019.
Companies that concentrate on ERC filing assistance normally provide know-how and assistance to assist businesses navigate the complex procedure of declaring the credit. They can provide numerous services, including:.
How is the employee retention credit calculated? Square Payroll Employee Retention Credit
Eligibility Assessment: These business will assess your company’s eligibility for the ERC based on aspects such as your industry, earnings, and operations. If you fulfill the requirements for the credit and determine the maximum credit amount you can declare, they can assist determine.
Documents and Computation: ERC filing services will help in gathering the essential documents, such as payroll records and monetary declarations, to support your claim. They will also help determine the credit amount based on qualified wages and other certifying expenditures.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for prior quarters, these companies can evaluate your previous payroll records and financials to identify potential opportunities for retroactive credits. They can assist you modify previous income tax return to claim these refunds.
Filing Assistance: Business concentrating on ERC filings will prepare and send the required forms and paperwork on your behalf. This includes finishing Form 941 or any other required tax forms.
Compliance and Updates: ERC regulations and guidance have actually developed in time. These business remain updated with the current modifications and ensure that your filings adhere to the most present guidelines. They can likewise offer continuous support if the internal revenue service requests additional details or carries out an audit related to your ERC claim.
It is essential to research and vet any business using ERC filing help to guarantee their reliability and competence. Try to find established companies with experience in tax and payroll services, or consider reaching out to relied on accounting firms or tax specialists who provide ERC submitting assistance.
Keep in mind that while these business can provide important support, it’s constantly an excellent idea to have a fundamental understanding of the ERC requirements and process yourself. This will help you make informed decisions and ensure accurate filings.
The Worker Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief procedures. The objective of the ERC is to encourage organizations to retain and pay their employees during the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to eligible companies, including for-profit businesses, tax-exempt organizations, and specific governmental entities. To qualify, companies should satisfy one of two requirements:.
Business operations were fully or partially suspended due to a government order related to COVID-19.
The business experienced a significant decline in gross invoices. As discussed earlier, for 2021, a considerable decrease is specified as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decline in gross invoices compared to the right away preceding quarter.
Credit Quantity: 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 (as much as 70%) of certified salaries paid to employees, consisting of particular 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: At first, organizations that received an Income Protection Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 permits businesses to declare the ERC even if they got a PPP loan. Nevertheless, the exact same earnings can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and enhanced, permitting qualified employers to claim the credit for certified wages paid as far back as March 13, 2020. This retroactive provision offers an opportunity for organizations to change prior-year income tax return and get refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their employment tax returns, normally Form 941. The excess can be reimbursed to the company if the credit exceeds the amount of work taxes owed.
It is necessary to note that the ERC provisions and eligibility criteria have evolved in time. The very best strategy is to talk to a tax professional or visit the main internal revenue service site for the most current and detailed information concerning the ERC, consisting of any current legislative modifications or updates.
To receive the ERC, an organization must fulfill one of the following requirements:.
Business operations were totally or partially suspended due to a government order related to COVID-19.
The business experienced a considerable decrease in gross invoices. For 2021, a substantial decrease is defined as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a substantial decline is specified as a 20% decline in gross receipts compared to the exact 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 companies, but there are some exceptions. For example, government entities and organizations that received a PPP loan might have limitations on declaring the credit.
The procedure for claiming the ERC includes finishing the required types and including the credit on your employment income tax return (normally Form 941). The exact time it takes to process the credit can differ based upon several elements, including the intricacy of your organization and the workload of the internal revenue service. It’s recommended to talk to a tax professional for assistance particular to your scenario.
There are several companies that can aid with the process of declaring the ERC. These include accounting firms, tax advisory services, and payroll service providers. Some widely known companies that provide assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research and call these companies straight to inquire about their services and charges.
Please note that the details provided here is based on general knowledge and may not reflect the most recent updates or changes to the ERC. It is essential to speak with a tax professional or go to the official internal revenue service site for the most current and precise details relating to eligibility, claiming procedures, and available support.
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 actually worked or not. In other words, even if the.
staff members worked full time and earned money for full time work, the employer still gets the credit.
Greater than 100. If the employer had more than 100 employees usually in 2019, then the credit is.
enabled only for wages paid to employees who did not work throughout the calendar quarter.
In both cases, “incomes” consists of not simply cash payments but also a portion of the expense of employer.
supplied healthcare. Square Payroll Employee Retention Credit
Companies can be right away compensated for the credit by minimizing the amount of payroll taxes they.