 and welcome to Restaurants Hawaii on Think Tech Hawaii. I am your host, Cheryl Matsuoka, the Executive Director of Hawaii Restaurant Association. And I'd like to introduce Siobhan Garcia, Hawaii Restaurant Association's Executive Assistant. Hey, Siobhan. Hi, Cheryl. Thank you for having me. Could you introduce our two guests? Yes, we want to welcome back John Gentile. He's the Chief Revenue Officer for ERC Today. And I want to welcome Abe Kwok, who is Managing Partner for Jade Dynasty Seafood Restaurant. He is also a, what is it, Vice Chair for the Hawaii Restaurant Association. Welcome to both of you. Thank you. Good to be here. Today we're answering more questions regarding the Employee Retention Tax Credit, also known, referred to as ERTC or ERC. But before we start, Siobhan, could you please state the disclaimer? Yes, we just want to remind everybody that the Hawaii Restaurant Association provides our members with referrals, not recommendations of potential companies to engage in their services. We do not guarantee the accuracy of the information concerning any company's products or services. We do not license, endorse, or recommend any particular company or service, nor do we make any judgment about the quality of service of any company. Consequently, we do urge our members to interview and conduct their own due diligence by checking references and customer comments before entering into a contract with any company. Thank you, Siobhan. So today, January 25th, 2022, we are discussing the ERTC updates. And, you know, Hawaii Restaurant Association's focus has been and will always be how, as an association, we may provide valuable information to help our members in the food service industry. Many of Hawaii Restaurant Association's initiatives help businesses, processes, and their bottom line. So today's discussion is a great example of how Hawaii Restaurant Association has been assisting Hawaii's restaurants and the whole food service industry to stay afloat and stay with their doors open. John, a long time ago, I learned the best way to explain something is to state what it isn't. So let's start from there. What, for businesses, especially business owners who are hearing about the ERTC for the first time, what isn't the ERTC? Well, it's definitely not a program that's ending anytime soon. I think a lot of individuals believe that with the infrastructure bill that was put, that was signed a few months ago, that it end ERC as we know it, which is 100% inaccurate. Businesses have up to three years from 2020 and 2021 to still apply. So a number of the organizations we talk to, or I frequently go out at night to dinner, 90% of the people I talk to believe ERC's done. Yeah, I agree. The other misconception is that they have to pay it back. You wanna touch on that, John? Correct, everyone thinks it's very similar to PPP or it's a loan, but it's not a loan at all. It's, you file through the IRS, you have to amend or business has to amend their 941s and then they have to file with IRS. And at this point, it's a retroactive service. So you have to go back and do an amendment and then the business receives literally a check in the mail that they don't have to pay it back. They can use it for anything within their business. They do have to pay taxes on it, but again, it's not a loan. Excellent. Now, is there anything else that the ERC is not? Before we have you review the 2021 guidelines and then move into the recovery startup business program, is there anything else that the ERC is not? You know, I wouldn't say there's really anything there. I think the number one misconception is A, it's a loan and B, it's ending or it's ended. So if businesses understand that one, it's not a loan and two, they have three years to amend, it's a great opportunity. Excellent. That's exactly it. I'd like to just mention this upfront because many people who are watching, you know, business owners who are watching this recording, you know, can learn from what you're stating. So let's start with 2021 as we discussed earlier. What are some of the changes? The biggest changes right now is one that the infrastructure bill eliminated Q4 for filing. So that was the only major change outside of another program that got put in place on August 1st, recall, we refer to it as the RSV, it's the Recovery Startup Business Credit. And, you know, we kind of joke internally about the fact that no one knows about the employer retention credit. Very few people know about the RSV. And the way that it states is that any business that opened up operations after February 15th, 2020 and has under $1 million in annual sales has the capability of qualifying for up to $50,000 in Q3 and $50,000 in Q4 2021. And the way that that $50,000 is equated is that a business can receive up to $7,000 per employee to very $10,000 in wages, 70% of $10,000. Very good, very good. Is there anything else that you would like to state, John, before we have Abe ask a few questions or make a few statements? The only thing I would say is, again, very few people know about it. And instead of trying to figure it out on your own, reach out to resources that make sense. If that means your payroll company, if that means your CPA, if that means a company like us, at the end of the day, it's a great opportunity. I mentioned last time there was a generational opportunity for everyone involved and that's exactly it. Since it's not alone, there's a lot of businesses that are hurting, especially in the restaurants. And with Omicron out now, we don't know what the future is with COVID. So again, do what you can to help business your employees and your livelihood and apply for the employer retention credit. Good points. And yes, John represents ERC today. And if you need his contact information, please reach out to me at infoatHawaiiRestaurant.org. And if you're not subscribed to our industry emails and newsletters, please subscribe. It's free, it's infoat. If you go to the website, hawaiirestaurant.org and just subscribe, it's free, you'll be kept up to date on programs such as the ERC. So John, anything else before I turn it over to Eve? The only thing I'll leave you with is, it does take businesses a fairly long time and I'm sure other people will back me up on this is that when a business does apply for it and they become eligible, they have to amend to 941, they have to send it to the IRS and the IRS unfortunately is overloaded with a significant amount of opportunity. So it's taking right now six to nine months to get paid from the IRS. We believe it'll be longer going into 2022, especially with the tax season coming up. So we did everything we can to help businesses and we were able to develop a funding solution for business. It's an option. So if a business wants to receive their ERC quicker than the six to nine month timeframe, we've been able to figure out an opportunity for them to get it in four to six weeks. So for more information on that, please reach out to us directly at ERC today or reach out to me directly as well. Awesome, John. All right, Eve, you have any questions for John? Well, it's a well said John and I just wanna ask on behalf of other business people, we have a lot of new ones and a lot of ones, they already apply the ERC. So for the new ones, they got to know this program. Besides, you know, get information from you, get your ability. Can they speak to the CPAs and other people as well? Absolutely, it's a great question. I forget to ask all the time. You know, shockingly, not a lot of payroll companies are doing your ERC. What's even more interesting is that less CPAs are doing it. So I always tell everyone, regardless if it's your CPAs doing it or not, reach out to them because they're your trusted advisor. They'll be able to provide you insight and if they're not doing it, they'll at least give you an opportunity of going to an organization like ERC today. Wonderful. We heard so many stories right of people who didn't think that they would be qualified. Yes, one of them is me. So I wanna tell you a little bit about my story. So as you know, J Dynasty Restaurants is one of the top Chinese restaurants we started in 2011. And when we reached to 2017 and 18, we reached to the peak. And it's hard to become number two, you know? You're number one. So when pandemic hits, you know, and we need help. You know, our business went down almost 80%. We had to literally close for a while. And we start looking for some brands and, you know, PPPs and to be honest with you, it's a lot of owners like me, it's a bigger head, but you wanted to, it looks like, oh, come on, we have to begging for money. So a lot of unwittingness over there, I can see some of my friends in the industry at that time when the PPP and when the ERC appears and they tend to hold off and say, well, I don't know why I should apply. You know what, I didn't take a, I didn't take a chance because I see the slide of my business and it's going down. We need help, we need help. We need all kinds of help. We were lucky to get some PPP funding help and the ERC will apply as well. And I just wanted to tell you fantastic stories. I got this information actually from Kauai Restaurant Association. I just joined the association not too long ago, but I got great information from Cheryl, from Siwan and from the website, you know, and who the content and what to do. And we went ahead and do that. And same as John, I mentioned it, we contacted our CPA right away and they are very knowledgeable and they get on it. They do all the work for us and unfortunately we didn't get it, right? So, but I want to tell you an amazing story is we opened another entity, it's called Dada, Siwan, Salon and Cafe. So it has a restaurant elements in there, 2021. We think that one is no chance, you know, everybody got the money, I don't think so. But you know what, I talked to Cheryl and I talked to Ryan Tanaka from the association. They say, you know what, try, okay? It's no harm to try to apply it. We have our CPA, we have our records, we have everything and Dada went to apply, actually not too long ago, four months ago, you know what, Dada got it, Dada got it. So we're waiting on the J Dynasty and we got it, Dada won. And we're gonna continue to look at it. It really helps, by the way, when we first opened the business during the pandemic time, just like any other owners, we're suffering. We have many hits on the cost, the rising costs, the inflation and employees and sometimes a lot of time, according to SIC and also the armor cons of patting. So you're not in a better shape, you know, we need help. Take out that proud hat a lot of time. So I did, you know, I went to apply and I'm in a very good shape now. So I got the money and we can operate it well. And we can use those money to take care of a lot of bills nowadays. And thanks for that. So with all the good changes, like John just mentioned, I think what we need to do is, as a business, as a owner, let's get the resources, get close to the help. And Hawaii Restaurant Association, it's been a great help to me and I'm glad I'm joining the club here. And I wanted to actually hopefully be a future leader to influence that, to get more of this kind of information to the small guys. You know, Hawaii has been suffering a lot of times from this pandemic time. And I think in the next two years, it's got to be challenged like this guys. So that's like what I learned, you know, filed it. Even you don't get it, but you at least you're in the system and the government is not gonna leave you behind and they're gonna fund it and you ultimately get it. You know, you might be get a surprise check tomorrow and say, wow, that really changed my plan, course of plan. Is that closing or pending? You can continue to pull out your good food, so. Thank you, Abe. Thank you so much. You're right. You know, one of the points that Abe brought up, John, and I forgot to mention it. You know, this show is Restaurants Hawaii and we cover the whole food service industry, but really and truly the ERC is for any business. John, you wanna touch upon that? Some of the types of businesses you've been able to help? Absolutely, that's another thing that people think about it's only for restaurants or the hospitality industry. We have done ERC in almost every industry. I don't think there's one I can even think that we haven't done, but people are surprised when we say churches, law firms, technology companies, hotels, it's been really, it's been staggering, but the most important thing is being activists in your community and wanting to help out as much people as possible because, so if people don't know about it, we all understand that and we're trying to help out as much as we can. I talk about it nonstop. My wife, I think it's tired of me talking about it honestly, but at the end of the day, it's about helping everyone and you see it on the news all the time is all that's other programs than the government that have gone away or aren't funding any opportunity anymore. The ERC has an open door policy. They're taking as many applications as they can. It might take some time to get paid, but we should all do our part in talking to across who it is because at the end of the day, you may or may not apply, but if you don't try, you'll never get it. That's been my motto. I tell you, John, I've been on local media TV stations, mentioning the ERC, I've been in talk shows and every opportunity I get, John, I mentioned the ERC and I welcome anyone to email me and info at hawaiirestaurant.org just in case and let me put you in touch with people like John so that we can help you keep your doors open. So now, Siobhan, do you have any questions for John? Yes, hi, John. Hi, Siobhan. You know, one of the things that you did mention for the startup businesses was that they can, if they opened a business after February 15th, is there a date when they have to, besides February 15th, is there an end date to that? And also, it is a two-part question. You mentioned employees too. Do they have to have a minimum or a maximum amount of employees? There's no minimum and there's no maximum. They just need to understand that they can get up to $7,000 per employee. So even though the $50,000 cap, let's say you have a new business and you only had five employees, well, you could only get $35,000 per quarter. But again, we have to analyze the wages that are better available. But it's a no-brainer. They should apply regardless. And it's, again, February 15th through the end of 2021. We are a business and we started in 20, gosh, the time flies. We started in 2021 and we took advantage of it as well. We are a new startup business and we are able to get $50,000 in Q3 and Q4. Now, what I have heard a little bit and, you know, correct me if I'm wrong, if it's a husband and wife that open a business, they wouldn't be included as part of the employees. Is that correct? Yeah, that's that's correct. It's they're excluded and then their employees are included. So that would be any family members or how does that work? It's typically media family. Someone just asked me earlier as what if my brother in law or cousin works for the company, they would be they would be included, but a media family is excluded. OK. And, you know, we kind of talked about the impact that the Infrastructure Investment Act had. Can you maybe explain why that actual act had something to do with the ERC? Well, I think a blindside of a lot of people. I think a lot of businesses thought that when the government had mentioned, hey, this is going to go through the end of 2021 and then the infrastructure bill got signed. Now, we have we've heard through some lobbyists that there is a push to get Q4 reenacted as well as potentially Q1 2022. Now, that's just I can't say that that's concrete, but we've heard that through some resources we have. But again, the infrastructure bill was put in place. A businesses cannot get Q4. They cannot claim for Q4 and eliminate that opportunity, which is unfortunate for a lot of businesses, because I think a lot of them are really counting on Q4. And the fact that I'm a crime hit really hard in all of the world, especially in the U.S. and Q4 and it's still affecting businesses now. I think it would be great if the government would reenact Q4, but unfortunately, they eliminated it. But inside the infrastructure bill, deep inside the infrastructure bill, it didn't include the RSV, which is nice. But, you know, when the infrastructure bill was signed, almost all the headlines said ERC ends. And unfortunately, they made a lot of people believe that that was the case. In fact, the last week of the count of year, we received more application one week than we had received in like two months because everyone thought it was ending. In fact, we still get people calling now and say, do I still have time to apply? I know it ended the last year. And they're very happy to hear that that wasn't the case. So, you know, we're full blown into tax season now. You know, if somebody hasn't amended their 941 and they come to you, what is your suggestion for them? And, you know, some people will want to go just through you versus a CPA. You know, can you tell us the benefits of doing it that way? Absolutely. You know, we were started from myself that I used to work, I previously worked at ADP and then my partner who had a CPA firm. So when we first went into business, that's how we got together. So we the CPA industry, the tax professional industry is allies for ERC today. We actually have about 50 CPA firms that we process ERC for. So what we found is that with tax season, as you just mentioned, the CPA community is getting really, really busy now. And but they're still getting, you know, requests from their clients to for support. So we have found that probably 25 percent of the CPA community that we've talked to actually has interest of doing ERC. And the ones that have not are trying to do their best for their clients to provide them a resource. There was a period of time that we were receiving probably three or four calls a day from CPA firms, which is which is pretty shocking. But now during tax season, I think we received 10 in two days. So again, again, I'm not excluding the CPA community. Obviously, they do a great job for their for their clients. But just understand, if you contact your CPA, your CPA doesn't do ERC or doesn't have a resource. We're that type of resource for you. That's good news for a lot of people, especially because you're saying so many of them are so busy and people are probably hearing this and saying, OK, I want to file now. I want to do this. Oh, absolutely. Absolutely. And the other thing is is payroll companies. There's tons of payroll companies out there. And some payroll companies do have something available. So I tell everyone, you know, exhaust your resources to get get this done. There's you'll eventually find someone that'll do it. Now, we this is all we do as of right now. So we've been able to really maximize credits. We haven't done done cross credits, meaning a payroll company did it or a CPA did it and we did it. And literally 90 percent of the time we maximize the credit. We get the more money than the CPA or the payroll company did. So, you know, I think the next question a lot of people would have is, is there a fee for your services? Absolutely. There's a fee. However, I think you appreciate this. I know you know this is the way that we do this is very different than most is we let any business come through here today and apply at no cost. And when I say no cost is no one knows if they qualify. And if you don't know your qualify, you don't know how much you're going to get. So businesses can go through our system and they can apply. And we give them a rough estimate of what that qualification is going to be. We request a lot of payroll information, as well as additional information about the business. And then once they're deemed they do qualify, we give them the option to move forward. And if they choose to do that, we ask for a minimal deposit up front anywhere between one and ten thousand dollars. And then we take a what I refer as a descending value of their credit. It starts at 15 percent and it goes down to five percent. So again, a very minimal amount up front, but they don't have to give us that until until they officially say, you know what, I like your service, we're going to move forward. If they do that, we finish the project and then the nine forty one give it to them, they send us the IRS in about six, seven, eight months. They get paid their check from that from the IRS. And then they pay us a balance of our fee. We did that because at the end of the day, we could do a credit of half, you know, 50,000 and we can do a credit of five hundred thousand in the exact same time frame. So we can't justify charges on the exact same amount for a credit that's larger. Well, thank you. That was really helpful information. And Cheryl, I'm going to move it to you. I know we're running out of time. Thank you. So, Siobhan, I'll have you re-mention the statement one more time and then we'll wrap it up. But, John, so much good information. This is going to be shared with all of our members and subscribers. So thanks again for giving us the opportunity. Thanks, John. Yes, thank you. And thank you to Ava as well. We do want to begin that the Hoy Restaurant Association provides our members with referrals, not recommendations of potential companies to engage in their services. And we do not guarantee the accuracy of the information concerning the company's products or services, and we do not license, endorse or recommend any particular company or service, nor do we make any judgments about the quality of the service of any company. Therefore, we do urge our members to interview and conduct their own due diligence by checking references and customer comments before entering into a contract with any company. Thank you, Siobhan. And again, everyone, please subscribe for our industry updates. You will get information just like today. We're going to be sending out this video recording to all of our subscribers and members. We're Hawaii Restaurant Association, the voice of Hawaii's restaurants and food service industry. Thank you for joining us, everyone. Be safe. Mahalo.