Lets talk first about Employee Retention Credit Accounting :
Our group here what do these guys doing everyone in this space is assisting teach individuals about ERC and uh always offer a beautiful breakfast and have people really learn more about the program we need to head to the room where we are able to show some of the checks that we are getting for companies and I wish to see that what is this this is uh numerous millions of dollars actually Kevin hundreds of countless dollars so these are replicate copies of the letters that go to customers confirming that the check is on the way I imply you know if you just begin to take a look at some of these here I indicate this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I imply it’s just I mean consider how many real 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 client so that’s how you’re able to track it you know when you
receive this you know the check is chosen sure which’s when they pay so they do not pay anything up until they really get the money they do not pay bottom line Wonder trust anything up until this letter is verified the check is on the way they transfer it into their savings account and they can truly rely on Wonder trust that the procedure has actually been ended up and how many 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 need you need specialists 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 speaking about something really crucial today the employee retention credit which the majority of you have never become aware of I definitely had not become aware of it till very recently and found out a lot about it because this is most likely the most affordable cost of capital for any small company anywhere
anytime if you have staff members in between 5 and five hundred so I’ve got the specialist with me this is Josh Fox he’s the creator and CEO of bottom line Principles 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 simply phone 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 inform all of us about it and how to get it and why I have actually ended up being yes the Ambassador and paid spokesperson for this I love this program it’s disappearing very soon you got to learn all about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply begin there so throughout the Trump Administration when President Trump was enacted they developed the cares Act and the cares act offered 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 big difference right there two 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 simply need to ensure 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 all right 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 gorgeous tough check in the mail where you get actual money from the internal revenue service all right so let’s talk about how it works because it seems like to me if it’s a if it’s employee retention credit that individual needed to be a staff member so I’m going to make the Presumption this cash is not for the owner not for individuals on the cap table not for shareholders it’s for staff members right you needed to have owned an organization 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 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 correct so there were six quarters the program was open well stroll us through the 6 quarters so you had quarters two three and 4 of 2020 and you had quarters one 2 and three of 2021. alright so that’s how it’s determined you need to be on the W-2 throughout that period now let’s talk my preferred part money how much can you return per staff member that was on a W-2 in those 6 quarters so the calculation in 2020 to be precise Kevin is 50 of the employee’s salary to an optimum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the employee’s wage 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 mayhem 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 as much as 5 thousand Max and after that what happens 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 worker that is because that’s a lot of money it is now there’s a caveat here the PPP money would need to be reduced from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would decrease the 26 000 so what we’re seeing on average Kevin is if you took PPP money someplace around ten thousand dollars a person so let’s state hypothetically you owned a dining establishment in New York City where I’m from and you had a hundred workers and you took PPP money you would still get a million dollar in the mail from the IRS so it’s huge clearly now the huge concern is why does nobody understand about this since look when I initially found out about this when I first satisfied Josh you know I’ve got great deals of investments in great deals of business I’m a significant supporter for entrepreneurship in America and make many many investments in business owners of which numerous suffered through the pandemic when I first found out about this I called BS I don’t believe it because I use 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 should have and we used them carefully to stay alive throughout the pandemic so when I became aware of this I stated nah it can’t hold true however when I dug around I even contacted us to my political leader friends Guv Senators they didn’t learn about it I imply that’s how you understand that’s how misinformation is that there’s no information out there then a bunch of individuals informed me well you can’t get it since you took the PPP also not true so let’s ask Josh why does nobody understand about the employee retention credit you understand what’s fascinating you’re talking about the banks Kevin since in the PPP loan process 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 country and they would process process in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply procedure procedure that’s all um and here there was turmoil since remember in the initial cares act you could not do both programs so if you had actually done PPP you might not do 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 made it clear to anyone about how to.
do this does your CFO understand 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 don’t do it the payroll companies yeah some of them are doing it as a payroll business your accountant no your accountant’s never done this prior to unless you have an account that entered into this business and bottom line my company Kevin has been 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 business so a lot of our big huge business clients have actually worked with bottom line to recuperate 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 property property tax all of these other government programs.
The worker retention tax credit is a broad based refundable tax credit developed to motivate.
companies to keep employees on their payroll. The credit is 50% of as much as $10,000 in salaries paid by an.
Since of COVID-19 or whose gross invoices, company whose business is completely or partially suspended.
decline by more than 50%.
1. The credit is readily available to all companies regardless of size including tax exempt organizations. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) little.
businesses who take Small company Loans.
2. To certify, the company needs to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s company is completely or partly 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 comparable quarter in 2019. When the.
company’s gross invoices exceed 80% of a comparable 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 total.
It is effective for salaries paid after March 13th and prior to December 31, 2020.
The meaning of certifying incomes differs by whether an employer had, usually, basically than.
100 staff members in 2019.
Business that concentrate on ERC filing assistance normally offer expertise and assistance to assist organizations navigate the complex procedure of declaring the credit. They can offer various services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Accounting
Eligibility Evaluation: These business will assess your organization’s eligibility for the ERC based on elements such as your industry, revenue, and operations. They can assist determine if you satisfy the requirements for the credit and identify the optimum credit quantity you can declare.
Paperwork and Computation: ERC filing services will assist in gathering the needed documents, such as payroll records and monetary declarations, to support your claim. They will likewise help compute the credit quantity based upon eligible salaries and other qualifying expenditures.
Retroactive Claim Review: If you are eligible to declare the ERC for prior quarters, these companies can evaluate your past payroll records and financials to recognize possible chances for retroactive credits. They can assist you modify prior tax returns to claim these refunds.
Filing Support: Business concentrating on ERC filings will prepare and submit the essential kinds and documents on your behalf. This includes finishing Kind 941 or any other required tax return.
Compliance and Updates: ERC policies and guidance have actually evolved gradually. These companies stay updated with the current modifications and make sure that your filings comply with the most current guidelines. If the Internal revenue service requests additional info or carries out an audit associated to your ERC claim, they can also offer continuous support.
It is necessary to research and vet any company using ERC filing help to guarantee their trustworthiness and proficiency. Search for established firms with experience in tax and payroll services, or think about reaching out to relied on accounting companies or tax experts who provide ERC submitting assistance.
Remember that while these business can provide important support, it’s always a good idea to have a standard understanding of the ERC requirements and process yourself. This will assist you make informed decisions and make sure accurate filings.
The Worker Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief measures. The objective of the ERC is to encourage businesses to retain and pay their employees during 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 employers, consisting of for-profit businesses, tax-exempt companies, and particular governmental entities. To certify, employers must satisfy one of two criteria:.
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 invoices. As pointed out earlier, for 2021, a significant decrease is specified as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decline in gross receipts 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 company’s share of Social Security taxes. The credit amount amounts to a portion (approximately 70%) of certified earnings paid to staff members, including particular health plan expenditures. The maximum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, companies that got an Income Security 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. However, the very same earnings can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and enhanced, permitting qualified employers to declare the credit for certified wages paid as far back as March 13, 2020. This retroactive arrangement supplies a chance for businesses to amend prior-year tax returns and receive refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their employment tax returns, generally Type 941. The excess can be refunded to the company if the credit goes beyond the quantity of employment taxes owed.
It’s important to keep in mind that the ERC provisions and eligibility requirements have evolved over time. The best strategy is to speak with a tax professional or go to the main IRS website for the most detailed and up-to-date information concerning the ERC, including any recent legal modifications or updates.
To qualify for the ERC, a company needs to satisfy among the following criteria:.
The business operations were completely or partially suspended due to a federal government order related to COVID-19.
The business experienced a significant decline in gross receipts. For 2021, a significant decline is defined as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decline in gross invoices compared to the very same quarter in 2019, or a 20% decrease in gross receipts compared to the right away preceding quarter.
The ERC is available to companies of all sizes, consisting of tax-exempt companies, but there are some exceptions. Government entities and organizations that received a PPP loan may have limitations on declaring the credit.
The process for declaring the ERC involves finishing the needed types and consisting of the credit on your employment tax return (typically Type 941). The exact time it takes to process the credit can differ based upon several factors, consisting of the intricacy of your organization and the work of the IRS. It’s advised to seek advice from a tax professional for guidance specific to your circumstance.
There are numerous business that can assist with the process of claiming the ERC. Some popular companies that offer support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the info offered here is based on general knowledge and may not reflect the most current updates or changes to the ERC. It is very important to speak with a tax expert or visit the official internal revenue service site for the most accurate and updated details relating to eligibility, claiming treatments, and available assistance.
Less than 100. The credit is based if the company had 100 or fewer staff members on average in 2019.
on wages paid to all staff members whether they in fact worked or not. To put it simply, even if the.
employees worked full-time and got paid 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.
enabled only for earnings paid to workers who did not work during the calendar quarter.
In both cases, “earnings” includes not just cash payments but also a portion of the cost of employer.
offered healthcare. Employee Retention Credit Accounting
Employers can be instantly compensated for the credit by lowering the quantity of payroll taxes they.