Lets talk first about What Are Gross Receipts For Employee Retention Credit :
Our team here what do these guys doing everyone in this room is assisting teach individuals about ERC and uh constantly provide a lovely breakfast and have individuals truly learn more about the program we should head to the room where we have the ability to show a few of the checks that we are getting for companies and I want to see that what is this this is uh hundreds of countless dollars actually Kevin hundreds of countless dollars so these are replicate copies of the letters that go to customers validating that the check is on the method I mean you know if you just 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 mean it’s just I mean think about 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 verified and the check is on the mail in the mail from the IRS 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 opted for sure and that’s when they pay so they do not pay anything until they really receive the cash they don’t pay bottom line Wonder trust anything until this letter is confirmed the check is on the method they deposit it into their checking account and they can truly trust Wonder trust that the procedure has actually been finished and the number of you think you have actually processed because you began this we’re about 35 000 of these for
about 6 billion dollars wow so plainly they understand what they’re doing which’s what you require you require experts on the other end of the phone to process this and get it to where you get among these that’s what matters all right Mr Wonderful here you’re at my YouTube channel we’re talking about something truly crucial today the employee retention credit which most of you have never heard of I definitely had not become aware of it till extremely just recently and discovered a lot about it since this is probably the most affordable cost of capital for any small company anywhere
anytime if you have staff members between five and five hundred so I’ve 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 phone your bank manager 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 representative for this I like this program it’s disappearing very soon you got to discover all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply begin there so throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act offered businesses three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody it makes a big distinction right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the cash money payroll tax refund fine go on sorry I just have to ensure we got that point I suggest that’s a big distinction a loan versus cash money I like cash money that’s what we’re speaking 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 lovely hard check in the mail where you get actual cash from the internal revenue service all right so let’s talk about how it works due to the fact that it seems like to me if it’s a if it’s staff member retention credit that person needed to be a worker so I’m going to make the Assumption this money is not for the owner not for individuals on the cap table not for investors it’s for employees right you needed to have actually owned a service however it’s based on you having W-2 employees in America not 10.99. so as long as you had W-2 staff members and you paid federal payroll taxes that’s why you would be eligible so you have 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 correct so there were six quarters the program was open well walk us through the six quarters so you had quarters two three and 4 of 2020 and you had quarters one 2 and three of 2021. all right 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 money just how much can you get back per worker that was on a W-2 in those six quarters so the calculation in 2020 to be exact Kevin is 50 of the employee’s income to an optimum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers escalated to 70 of the worker’s income to an optimum of seven thousand per quarter how did that happen um they just changed 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 approximately five thousand Max and then what takes place 21 000 Max in 2021 oh that’s how you create twenty 6 thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty six thousand dollars per staff member that is since that’s a lot of money it is now there’s a caveat here the PPP money would have to be reduced from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would lower the 26 000 so what we’re seeing typically Kevin is if you took PPP cash somewhere around 10 thousand dollars a person so let’s state hypothetically you owned a restaurant in New york city 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 big certainly now the big question is why does no one learn about this since look when I initially became aware of this when I first fulfilled Josh you know I’ve got lots of financial investments in great deals of business I’m a significant supporter for entrepreneurship in America and make many numerous investments in entrepreneurs of which many suffered through the pandemic when I first became aware of 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 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 carefully to survive during 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 political leader friends Guv Senators they didn’t know about it I mean that’s how you understand that’s how false information is that there’s no info out there then a lot of individuals told me well you can’t get it because you took the PPP also not true so let’s ask Josh why does no one learn about the staff member retention credit you understand what’s interesting you’re talking about the banks Kevin because in the PPP loan process 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 huge 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 simply process procedure that’s all um and here there was mayhem since 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 changed the law in 2021 the banks were refraining from doing ERC since it’s not alone so you’re getting a tax refund so the federal government never made it clear to anybody about how to.
do this does your CFO know how to do this not really she or he’s never done it previously 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 company your accounting professional no your accountant’s never ever done this prior to unless you have an account that went into this business and bottom line my firm Kevin has stayed in business considering that 2009 and we’ve been working with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 companies so a great deal of our huge huge corporate clients have actually worked with bottom line to recuperate other federal government programs we have actually done sales tax and utilize tax unemployment tax work opportunity tax credits research and development tax credits unclaimed home real estate tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit created to encourage.
employers to keep workers on their payroll. The credit is 50% of approximately $10,000 in incomes paid by an.
Because of COVID-19 or whose gross invoices, employer whose company is totally or partially suspended.
decrease by more than 50%.
1. The credit is offered to all employers regardless of size including tax exempt organizations. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
services who take Small Business Loans.
2. To certify, the company has to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s service is completely or partially suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the equivalent quarter in 2019. When the.
company’s gross invoices go above 80% of a similar quarter in 2019 they no longer certify.
after the end of that quarter.
Estimation of the Credit.
The quantity 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 prior to December 31, 2020.
The definition of certifying salaries varies by whether an employer had, usually, more or less than.
100 workers in 2019.
Companies that concentrate on ERC filing help usually provide expertise and support to assist businesses navigate the complicated process of declaring the credit. They can offer numerous services, including:.
How is the employee retention credit calculated? What Are Gross Receipts For Employee Retention Credit
Eligibility Evaluation: These business will evaluate your organization’s eligibility for the ERC based on elements such as your industry, earnings, and operations. If you meet the requirements for the credit and identify the maximum credit amount you can declare, they can help figure out.
Paperwork and Computation: ERC filing services will help in collecting the essential paperwork, such as payroll records and monetary statements, to support your claim. They will also help compute the credit amount based upon qualified salaries and other qualifying expenditures.
Retroactive Claim Review: If you are qualified to claim the ERC for previous quarters, these companies can evaluate your past payroll records and financials to identify possible opportunities for retroactive credits. They can assist you change previous income tax return to claim these refunds.
Filing Support: Business specializing in ERC filings will prepare and submit the required types and paperwork on your behalf. This includes finishing Kind 941 or any other required tax forms.
Compliance and Updates: ERC policies and assistance have actually progressed with time. These companies remain updated with the most recent modifications and guarantee that your filings abide by the most present guidelines. They can also offer ongoing assistance if the IRS requests extra info or carries out an audit related to your ERC claim.
It is essential to research study and vet any company providing ERC filing support 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 experts who offer ERC filing support.
Remember that while these companies can provide important assistance, it’s always an excellent concept to have a standard understanding of the ERC requirements and process yourself. This will help you make notified decisions and make sure 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 procedures. The objective of the ERC is to encourage companies to keep and pay their staff members throughout the pandemic, even if their operations have actually been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is available to eligible companies, consisting of for-profit services, tax-exempt companies, and specific governmental entities. To certify, companies need to meet one of two criteria:.
Business operations were completely or partly suspended due to a federal government order related to COVID-19.
The business experienced a significant decrease in gross invoices. As discussed earlier, for 2021, a substantial decline is specified as a 20% decline in gross invoices 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% 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 amounts to a portion (as much as 70%) of qualified salaries paid to workers, consisting of certain health plan costs. 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, services that received an Income Defense Program (PPP) loan were not eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 enables organizations to declare the ERC even if they received a PPP loan. The exact same incomes can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and boosted, enabling eligible companies to claim the credit for certified earnings paid as far back as March 13, 2020. This retroactive provision supplies a chance for businesses to modify prior-year tax returns and get refunds.
Claiming the Credit: Companies can declare the ERC by reporting it on their work tax returns, normally Kind 941. If the credit surpasses the amount of employment taxes owed, the excess can be refunded to the employer.
It’s important to keep in mind that the ERC provisions and eligibility criteria have actually developed with time. The very best course of action is to speak with a tax professional or check out the main internal revenue service website for the most updated and in-depth info regarding the ERC, consisting of any current legislative modifications or updates.
To receive the ERC, a business must fulfill among the following criteria:.
The business operations were completely or partly suspended due to a federal government order related to COVID-19.
The business experienced a considerable decrease in gross receipts. For 2021, a considerable decline is defined as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a substantial decrease is specified as a 20% decrease in gross receipts 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 organizations of all sizes, including tax-exempt organizations, however there are some exceptions. For example, federal government entities and organizations that received a PPP loan may have limitations on claiming the credit.
The procedure for declaring the ERC includes completing the essential forms and consisting of the credit on your employment tax return (usually Form 941). The exact time it requires to process the credit can vary based on several aspects, consisting of the complexity 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 numerous companies that can assist with the process of declaring the ERC. These consist of accounting companies, tax advisory services, and payroll service providers. Some popular companies that use help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research study and call these companies straight to ask about their charges and services.
Please keep in mind that the information provided here is based on basic knowledge and may not show the most current updates or modifications to the ERC. It is necessary to speak with a tax professional or visit the main IRS website for the most accurate and up-to-date info regarding eligibility, declaring procedures, and available help.
Less than 100. If the company had 100 or less employees on average in 2019, then the credit is based.
on earnings paid to all employees whether they really worked or not. To put it simply, even if the.
staff members worked full time and made money for full-time work, the employer still gets the credit.
Greater than 100. The credit is if the employer had more than 100 staff members on average in 2019.
enabled just for incomes paid to workers who did not work throughout the calendar quarter.
In both cases, “earnings” consists of not simply money payments but likewise a portion of the expense of employer.
supplied health care. What Are Gross Receipts For Employee Retention Credit
Companies can be immediately repaid for the credit by decreasing the quantity of payroll taxes they.