Lets talk first about Employee Retention Credit American Rescue Plan :
Our team here what do these men doing everyone in this space is helping teach individuals about ERC and uh constantly offer a beautiful breakfast and have individuals actually 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 wish to see that what is this this is uh numerous countless dollars literally Kevin hundreds of countless dollars so these are duplicate copies of the letters that go to customers validating that the check is on the method I indicate you know if you simply start to look at some of these here I imply this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I mean it’s just I indicate think of the number of actual customers 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 IRS heading to the client so that’s how you have the ability to track it you understand when you
receive this you know the check is chosen sure and that’s when they pay so they don’t pay anything until they really receive the cash they do not pay bottom line Wonder trust anything until this letter is confirmed the check is on the method they deposit it into their bank account and they can truly rely on Wonder trust that the process has been finished and the number of you believe you’ve processed since you began this we have to do with 35 000 of these for
about six billion dollars wow so clearly they understand what they’re doing which’s what you need you need 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 speaking about something actually important today the employee retention credit which most of you have never heard of I certainly hadn’t heard of it till very recently and learned a lot about it due to the fact that 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 have actually got the specialist with me this is Josh Fox he’s the creator and CEO of bottom line Ideas they’re the biggest processor of these ERC credits this is a 170 page program so it’s not easy this isn’t like PPP we simply contact your bank manager 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 become yes the Ambassador and paid spokesperson for this I like this program it’s going away very soon you got to find out everything about it let’s talk staff member 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 provided companies 3 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 difference right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
fix the money cash payroll tax refund all right go on sorry I just need to ensure we got that point I indicate that’s a big distinction a loan versus money cash 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 original cares Act is the ERC and yes Kevin it is a gorgeous hard check in the mail where you get actual cash from the internal revenue service all right so let’s speak about how it works because it seems like to me if it’s a if it’s staff member 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 investors it’s for workers right you had to have actually owned a company but it’s based on you having W-2 workers in America not 10.99. so as long as you had W-2 employees and you paid federal payroll taxes that’s why you would be qualified so you need to be on payroll in 2020 on the W-2 and you have 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 two 3 and 4 of 2020 and you had quarters one two and 3 of 2021. all right so that’s how it’s determined 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 worker that was on a W-2 in those six quarters so the estimation in 2020 to be exact Kevin is 50 of the worker’s income to a maximum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers increased to 70 of the employee’s wage to a maximum of 7 thousand per quarter how did that happen um they just changed the rules in.
2021 versus because the chaos of the pandemic so they wished to even get more to keep those staff members 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 then what occurs 21 000 Max in 2021 oh that’s how you create twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty 6 thousand dollars per employee that is because that’s a great deal of cash it is now there’s a caveat here the PPP money would need to be lowered from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would reduce the 26 000 so what we’re seeing usually Kevin is if you took PPP money someplace around ten thousand dollars an individual so let’s say hypothetically you owned a restaurant in New york city City where I’m from and you had a hundred staff members and you took PPP money you would still get a million dollar in the mail from the internal revenue service so it’s big undoubtedly now the big concern is why does nobody understand about this due to the fact that look when I initially heard about this when I initially fulfilled Josh you understand I’ve got lots of financial investments in great deals of business I’m a significant advocate for entrepreneurship in America and make many many investments in entrepreneurs of which many suffered through the pandemic when I initially became aware of this I called BS I do not believe it due to the fact that I utilize the PPP we went through the cash center Banks to get it it was extremely easy to do we had our CEOs call the banks they got their loans and that were well should have and we used them sensibly to survive during the pandemic so when I heard about this I stated nah it can’t hold true however when I dug around I even contacted us to my politician pals Guv Senators they didn’t know about it I mean that’s how you understand that’s how misinformation is that there’s no info out there then a lot of people told me well you can’t get it since you took the PPP likewise not real so let’s ask Josh why does no one understand about the staff member retention credit you know what’s intriguing you’re speaking about the banks Kevin due to the fact that 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 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 procedure process that’s all um and here there was turmoil due to the fact that keep in mind in the original cares act you could refrain from doing both programs so if you had 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 due to the fact that 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 actually she or he’s never done it before do the banks do it nope the banks don’t do it the payroll business yeah some of them are doing it as a payroll company your accountant no your accountant’s never done this before unless you have an account that entered into this service and bottom line my company Kevin has actually stayed in business considering that 2009 and we’ve been dealing with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 business so a lot of our big huge business customers have actually dealt with bottom line to recuperate other government programs we’ve done sales tax and utilize tax joblessness tax work chance tax credits research and development tax credits unclaimed property real estate tax all of these other federal government programs.
The worker retention tax credit is a broad based refundable tax credit developed to encourage.
employers to keep employees on their payroll. The credit is 50% of approximately $10,000 in earnings paid by an.
Because of COVID-19 or whose gross receipts, employer whose organization is fully or partially suspended.
decrease by more than 50%.
1. The credit is offered to all employers no matter size including tax exempt organizations. There are.
just two exceptions: (1) state and city governments and their instrumentalities and (2) little.
companies who take Small Business Loans.
2. To qualify, the company needs to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s company is fully or partially suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross receipts are below 50% of the equivalent quarter in 2019. As soon as the.
company’s gross invoices exceed 80% of a comparable quarter in 2019 they no longer certify.
after the end of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the certifying wages paid up to $10,000 in overall.
It works for earnings paid after March 13th and prior to December 31, 2020.
The meaning of certifying wages differs by whether an employer had, on average, basically than.
100 employees in 2019.
Companies that concentrate on ERC filing support normally supply competence and support to assist businesses navigate the complicated procedure of claiming the credit. They can provide numerous services, including:.
How is the employee retention credit calculated? Employee Retention Credit American Rescue Plan
Eligibility Assessment: These companies will examine your service’s eligibility for the ERC based on aspects such as your market, profits, and operations. They can assist figure out if you meet the requirements for the credit and determine the maximum credit quantity you can claim.
Paperwork and Computation: ERC filing services will assist in collecting the needed documentation, such as payroll records and financial declarations, to support your claim. They will likewise help determine the credit quantity based on eligible earnings and other certifying costs.
Retroactive Claim Review: If you are qualified to declare the ERC for prior quarters, these business can review your previous payroll records and financials to recognize prospective opportunities for retroactive credits. They can assist you modify previous tax returns to declare these refunds.
Filing Help: Companies concentrating on ERC filings will prepare and send the needed types and documentation in your place. This includes completing Type 941 or any other necessary tax forms.
Compliance and Updates: ERC guidelines and guidance have actually progressed over time. These business stay updated with the latest modifications and make sure that your filings adhere to the most current guidelines. If the Internal revenue service demands extra information or conducts an audit related to your ERC claim, they can likewise provide continuous support.
It’s important to research study and vet any business offering ERC filing assistance to guarantee their reliability and knowledge. Look for recognized companies with experience in tax and payroll services, or think about reaching out to relied on accounting firms or tax specialists who offer ERC submitting assistance.
Remember that while these companies can supply important support, it’s constantly an excellent idea to have a basic understanding of the ERC requirements and process yourself. This will assist you make notified decisions and make sure precise filings.
The Worker 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 organizations to retain and pay their staff members throughout the pandemic, even if their operations have actually been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to qualified companies, consisting of for-profit services, tax-exempt organizations, and specific governmental entities. To qualify, companies need to 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 substantial decrease in gross invoices. As pointed out earlier, for 2021, a significant decrease is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decline in gross invoices compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount is equal to a percentage (approximately 70%) of certified wages paid to employees, consisting of particular health insurance expenses. The optimum 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 got an Income Security Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 enables services to claim the ERC even if they got a PPP loan. However, the very same earnings can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively expanded and boosted, enabling qualified companies to declare the credit for qualified earnings paid as far back as March 13, 2020. This retroactive arrangement offers a chance for businesses to modify prior-year tax returns and get refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their employment income tax return, normally Form 941. The excess can be refunded to the company if the credit exceeds the amount of work taxes owed.
It is very important to note that the ERC arrangements and eligibility criteria have actually evolved gradually. The best course of action is to speak with a tax professional or visit the main internal revenue service site for the most current and in-depth info regarding the ERC, including any current legislative changes or updates.
To qualify for the ERC, a company needs to satisfy one of the following requirements:.
The business operations were completely or partially suspended due to a federal government order related to COVID-19.
Business experienced a significant decline in gross receipts. For 2021, a considerable decrease is specified as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the right away preceding quarter.
The ERC is offered to organizations of all sizes, consisting of tax-exempt organizations, however there are some exceptions. For instance, federal government entities and organizations that got a PPP loan may have limitations on claiming the credit.
The process for claiming the ERC involves finishing the needed types and including the credit on your employment tax return (generally Kind 941). The exact time it requires to process the credit can vary based upon a number of aspects, consisting of the intricacy of your company and the work of the IRS. It’s advised to seek advice from a tax expert for assistance particular to your situation.
There are a number of business that can assist with the process of claiming the ERC. These consist of accounting firms, tax advisory services, and payroll service providers. Some well-known companies that use help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research study and contact these business straight to inquire about their services and costs.
Please keep in mind that the information provided here is based on basic understanding and might not reflect the most recent updates or modifications to the ERC. It is essential to seek advice from a tax professional or go to the main IRS website for the most up-to-date and accurate information relating to eligibility, claiming treatments, and available support.
Less than 100. If the employer had 100 or less staff members on average in 2019, then the credit is based.
on salaries paid to all employees whether they really worked or not. In other words, even if the.
employees worked full-time and made money for full time work, the company still gets the credit.
Greater than 100. If the company had more than 100 employees on average in 2019, then the credit is.
permitted just for wages paid to staff members who did not work during the calendar quarter.
In both cases, “salaries” consists of not simply cash payments however likewise a portion of the cost of company.
provided health care. Employee Retention Credit American Rescue Plan
Employers can be immediately reimbursed for the credit by decreasing the amount of payroll taxes they.