Lets talk first about Are Owner Employees Eligible For Employee Retention Credit :
Our group here what do these guys doing everybody in this space is assisting teach people about ERC and uh constantly supply a beautiful breakfast and have people truly learn more about the program we need to head to the space where we are able to show some of the checks that we are getting for companies and I want to see that what is this this is uh numerous countless dollars actually Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to customers validating that the check is on the method I mean you understand if you just start to take a look at a few of these here I suggest this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s just I imply 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 confirmed the numbers are validated and the check is on the mail in the mail from the internal revenue service 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 gone for sure and that’s when they pay so they do not pay anything till they really receive the cash they don’t pay bottom line Wonder trust anything till this letter is confirmed the check is on the way they transfer it into their checking account and they can really rely on Wonder trust that the process has been completed and the number of you think you’ve processed considering that you began this we’re about 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 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 Fantastic here you’re at my YouTube channel we’re discussing something really important today the worker retention credit which the majority of you have actually never heard of I certainly hadn’t become aware of it till really just recently and discovered a lot about it since this is most likely the lowest expense of capital for any small company 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 Principles they’re the largest processor of these ERC credits this is a 170 page program so it’s difficult this isn’t like PPP we simply call up your bank supervisor 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 spokesperson for this I love this program it’s going away very soon you got to learn all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just begin there so throughout the Trump Administration when President Trump was enacted they developed the cares Act and the cares act used organizations 3 chances 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.
remedy the money money payroll tax refund alright go on sorry I simply have to ensure we got that point I imply that’s a huge distinction a loan versus money money I like money money that’s what we’re discussing 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 gorgeous hard check in the mail where you get real money from the IRS all right so let’s talk about how it works since it sounds like to me if it’s a if it’s worker retention credit that individual needed to be a staff member so I’m going to make the Assumption this money is not for the owner not for people on the cap table not for shareholders it’s for workers right you needed to have owned a service but it’s based on you having W-2 workers in America not 10.99. As long as you had W-2 employees 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 first 6 months of 2021 on the W-2 proper so there were 6 quarters the program was open well stroll us through the six quarters so you had quarters two three and 4 of 2020 and you had quarters one two and three of 2021. alright so that’s how it’s determined you have to be on the W-2 during that period now let’s talk my favorite part cash 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 specific Kevin is 50 of the employee’s wage to a maximum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s salary to a maximum of seven thousand per quarter how did that happen um they just altered the rules in.
2021 versus since the mayhem of the pandemic so they wanted 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 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 five thousand in twenty twenty that’s twenty six thousand dollars per staff member that is since that’s a great deal of money it is now there’s a caution 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 two you would reduce the 26 000 so what we’re seeing on average Kevin is if you took PPP money somewhere around 10 thousand dollars a person so let’s state hypothetically you owned a restaurant 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 internal revenue service so it’s big undoubtedly now the huge concern is why does nobody understand about this due to the fact that appearance when I first heard about this when I first met Josh you understand I have actually got lots of investments in lots of companies I’m a major supporter for entrepreneurship in America and make lots of many financial investments in entrepreneurs of which numerous suffered through the pandemic when I first became aware of this I called BS I don’t think it because I use 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 which were well deserved and we utilized them wisely to survive throughout the pandemic so when I became aware of this I said nah it can’t hold true however when I dug around I even contacted us to my political leader buddies Governor Senators they didn’t understand about it I mean that’s how you understand that’s how false information is that there’s no information out there then a lot of people told me well you can’t get it since you took the PPP also not real so let’s ask Josh why does no one know about the staff member retention credit you understand what’s interesting you’re speaking about the banks Kevin because in the PPP loan procedure the federal government made it really 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 just process process that’s all um and here there was mayhem due to the fact that remember in the initial cares act you might refrain from doing both programs so if you had done PPP you might refrain from doing 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 government never made it clear to any person about how to.
do this does your CFO understand how to do this not really he or she’s never done it in the past do the banks do it nope the banks do not do it the payroll business yeah some of them are doing it as a payroll business your accountant no your accounting professional’s never ever done this prior to unless you have an account that entered into this business and bottom line my company Kevin has actually stayed in business considering that 2009 and we’ve been working with the federal government and the state federal government to recuperate money for Fortune 500 Fortune 1000 business so a great deal of our huge big business customers have dealt with bottom line to recover other federal government programs we’ve done sales tax and use tax joblessness tax work chance tax credits research and development tax credits unclaimed home property tax all of these other government programs.
The staff member retention tax credit is a broad based refundable tax credit designed to encourage.
companies to keep staff members on their payroll. The credit is 50% of approximately $10,000 in wages paid by an.
Due to the fact that of COVID-19 or whose gross invoices, company whose business is fully or partially suspended.
decline by more than 50%.
1. The credit is offered to all employers no matter size consisting of tax exempt companies. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
companies who take Small Business Loans.
2. To certify, the employer needs to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s company is completely or partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the company’s gross invoices are listed below 50% of the similar quarter in 2019. As soon as the.
company’s gross invoices exceed 80% of a similar quarter in 2019 they no longer certify.
after completion of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the qualifying earnings paid up to $10,000 in overall.
It is effective for wages paid after March 13th and prior to December 31, 2020.
The meaning of qualifying incomes differs by whether an employer had, on average, more or less than.
100 workers in 2019.
Business that concentrate on ERC filing assistance generally offer expertise and assistance to help organizations browse the complicated procedure of declaring the credit. They can offer numerous services, including:.
How is the employee retention credit calculated? Are Owner Employees Eligible For Employee Retention Credit
Eligibility Assessment: These companies will examine your company’s eligibility for the ERC based upon factors such as your market, earnings, and operations. They can assist identify if you fulfill the requirements for the credit and identify the maximum credit amount you can declare.
Documentation and Calculation: ERC filing services will help in collecting the necessary documents, such as payroll records and financial declarations, to support your claim. They will also assist calculate the credit quantity based upon qualified earnings and other certifying expenses.
Retroactive Claim Review: If you are qualified to claim the ERC for previous quarters, these companies can examine your past payroll records and financials to determine possible opportunities for retroactive credits. They can help you change prior tax returns to declare these refunds.
Filing Support: Companies focusing on ERC filings will prepare and submit the needed types and documents on your behalf. This includes completing Kind 941 or any other required tax return.
Compliance and Updates: ERC regulations and assistance have actually progressed in time. These business remain upgraded with the latest modifications and make sure that your filings adhere to the most existing guidelines. They can likewise offer ongoing support if the IRS demands additional info or performs an audit related to your ERC claim.
It’s important to research study and vet any company using ERC filing support to ensure their reliability and know-how. Look for established firms with experience in tax and payroll services, or think about connecting to trusted accounting companies or tax professionals who provide ERC submitting assistance.
Remember that while these business can supply important assistance, it’s constantly an excellent idea to have a basic understanding of the ERC requirements and process yourself. This will help you make informed choices and guarantee accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief measures. The goal of the ERC is to encourage organizations to keep 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 readily available to qualified companies, including for-profit companies, tax-exempt organizations, and specific governmental entities. To qualify, employers should satisfy one of two requirements:.
Business operations were fully or partly suspended due to a government order related to COVID-19.
Business experienced a significant decrease in gross receipts. As pointed out previously, for 2021, a significant decrease is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decrease 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 instantly preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity is equal to a percentage (as much as 70%) of qualified salaries paid to staff members, consisting of particular health plan expenditures. The optimum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, organizations that got a Paycheck Security Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 enables companies to claim the ERC even if they got a PPP loan. The exact same wages can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and improved, enabling qualified companies to declare the credit for qualified incomes paid as far back as March 13, 2020. This retroactive provision offers an opportunity for services to modify prior-year tax returns and receive refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their work income tax return, normally Type 941. If the credit exceeds the quantity of work taxes owed, the excess can be reimbursed to the company.
It is essential to keep in mind that the ERC arrangements and eligibility requirements have evolved over time. The best strategy is to talk to a tax professional or check out the main IRS website for the most up-to-date and detailed information concerning the ERC, consisting of any current legislative modifications or updates.
To receive the ERC, a company needs to meet among the following criteria:.
The business operations were fully or partially suspended due to a government order related to COVID-19.
Business experienced a substantial decline in gross invoices. For 2021, a substantial decrease is defined as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
The ERC is available to businesses of all sizes, including tax-exempt companies, but there are some exceptions. For example, government entities and businesses that got a PPP loan may have constraints on declaring the credit.
The procedure for claiming the ERC includes finishing the required kinds and including the credit on your employment income tax return (typically Form 941). The exact time it takes to process the credit can vary based on several elements, consisting of the intricacy of your company and the workload of the IRS. It’s recommended to consult with a tax professional for assistance particular to your situation.
There are several business that can help with the procedure of declaring the ERC. These include accounting companies, tax advisory services, and payroll company. Some popular business that offer support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research study and call these business straight to ask about their services and fees.
Please note that the details supplied here is based on basic understanding and may not show the most current updates or changes to the ERC. It is very important to talk to a tax expert or check out the main IRS site for the most current and precise info concerning eligibility, declaring procedures, and readily available support.
Less than 100. If the company had 100 or fewer staff members typically in 2019, then the credit is based.
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 made money for full time work, the company still gets the credit.
Greater than 100. If the company had more than 100 workers typically in 2019, then the credit is.
permitted only for incomes paid to employees who did not work during the calendar quarter.
In both cases, “salaries” includes not just money payments however likewise a portion of the expense of employer.
offered health care. Are Owner Employees Eligible For Employee Retention Credit
Companies can be instantly compensated for the credit by reducing the amount of payroll taxes they.