Lets talk first about Do Part Time Employees Count For Employee Retention Credit :
Our group here what do these guys doing everyone in this room is assisting teach people about ERC and uh always offer a lovely breakfast and have people really learn about the program we must head to the space where we have the ability to display a few of the checks that we are getting for companies and I want to see that what is this this is uh numerous millions of dollars literally Kevin hundreds of countless dollars so these are replicate copies of the letters that go to customers verifying that the check is on the method I mean you understand if you simply start to look at a few of these here I mean this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s just I mean think of the number of actual clients 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 confirmed and the check is on the mail in the mail from the internal revenue service heading to the customer so that’s how you have the ability to track it you understand when you
receive this you understand the check is chosen sure which’s when they pay so they don’t pay anything till they in fact get the money they do not pay bottom line Wonder trust anything until this letter is confirmed the check is on the way they deposit it into their bank account and they can truly trust Wonder trust that the process has been completed and the number of you believe you’ve processed considering that you began this we’re about 35 000 of these for
about six billion dollars wow so plainly they know what they’re doing and that’s what you require you need professionals 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 discussing something actually important today the worker retention credit which the majority of you have never ever become aware of I definitely hadn’t heard of it up until really just recently and discovered a lot about it because this is probably the most affordable cost of capital for any small business anywhere
anytime if you have employees between five and five hundred so I’ve got the expert 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 just call your bank supervisor and state offer me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to inform us all about it and how to get it and why I’ve ended up being yes the Ambassador and paid spokesperson for this I enjoy this program it’s going away soon you got to discover all about it let’s talk worker retention credit Josh Fox what is an ERC let’s simply start there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act offered services three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everyone it makes a huge difference right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
fix the cash money payroll tax refund okay go on sorry I simply need to ensure we got that point I mean that’s a huge difference a loan versus money money 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 initial cares Act is the ERC and yes Kevin it is a lovely difficult check in the mail where you get actual money from the internal revenue service all right so let’s discuss how it works since it seems like to me if it’s a if it’s worker retention credit that person needed to be a staff member so I’m going to make the Assumption this money 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 a business but it’s based upon you having W-2 employees 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 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 right so there were 6 quarters the program was open well walk us through the six quarters so you had quarters two 3 and 4 of 2020 and you had quarters one two and 3 of 2021. alright so that’s how it’s determined you have 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 employee 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 salary to an optimum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the worker’s salary to a maximum of 7 thousand per quarter how did that occur 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 five thousand Max and after that what takes place 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 six thousand dollars per employee that is because that’s a lot of cash it is now there’s a caveat here the PPP cash would need to be minimized 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 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 workers and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s substantial certainly now the big concern is why does no one know about this because appearance when I initially heard about this when I initially satisfied Josh you understand I have actually got great deals of financial investments in lots of business I’m a significant advocate for entrepreneurship in America and make lots of lots of investments in entrepreneurs of which many suffered through the pandemic when I first heard about this I called BS I do not believe it since I use the PPP we went through the money 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 been worthy of and we used them carefully to survive throughout the pandemic so when I found out about this I said nah it can’t hold true but when I dug around I even called to my political leader pals Guv Senators they didn’t know about it I indicate that’s how you understand that’s how misinformation is that there’s no details out there then a lot of individuals told me well you can’t get it due to the fact that you took the PPP likewise not true so let’s ask Josh why does nobody know about the worker retention credit you know what’s intriguing you’re speaking about the banks Kevin since in the PPP loan process 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 procedure 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 chaos since keep in mind in the original cares act you might not do both programs so if you had done PPP you might not do ERC in the original program and when they changed the law in 2021 the banks were not doing ERC because it’s not alone so you’re getting a tax refund so the federal government never made it clear to anyone about how to.
do this does your CFO know how to do this not truly she or he’s never ever done it before 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 went into this organization and bottom line my firm Kevin has been in business given that 2009 and we have actually been dealing with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 business so a great deal of our huge big business customers have actually dealt with bottom line to recover other federal government programs we have actually done sales tax and utilize 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 encourage.
companies to keep employees on their payroll. The credit is 50% of up to $10,000 in earnings paid by an.
company whose company is totally or partially suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
1. The credit is readily available to all companies no matter size including tax exempt companies. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) little.
organizations who take Small Business Loans.
2. To qualify, the employer has to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s business is fully or partially suspended by federal 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.
employer’s gross receipts go above 80% of a comparable quarter in 2019 they no longer qualify.
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 incomes paid after March 13th and before December 31, 2020.
The definition of qualifying wages varies by whether a company had, typically, more or less than.
100 employees in 2019.
Companies that focus on ERC filing assistance generally supply expertise and support to assist companies browse the complicated procedure of declaring the credit. They can use different services, including:.
How is the employee retention credit calculated? Do Part Time Employees Count For Employee Retention Credit
Eligibility Evaluation: These companies will evaluate your business’s eligibility for the ERC based on elements such as your industry, revenue, and operations. They can help figure out if you satisfy the requirements for the credit and recognize the optimum credit quantity you can declare.
Paperwork and Estimation: ERC filing services will help in collecting the needed documentation, such as payroll records and financial statements, to support your claim. They will likewise assist compute the credit quantity based upon eligible incomes and other qualifying expenditures.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for previous quarters, these business can examine your past payroll records and financials to identify potential opportunities for retroactive credits. They can help you modify prior income tax return to claim these refunds.
Filing Support: Business concentrating on ERC filings will prepare and send the necessary types and paperwork on your behalf. This includes completing Type 941 or any other necessary tax return.
Compliance and Updates: ERC regulations and assistance have actually evolved with time. These companies stay upgraded with the most recent changes and make sure that your filings adhere to the most present standards. If the Internal revenue service demands additional info or carries out an audit related to your ERC claim, they can likewise offer ongoing support.
It is very important to research and vet any business offering ERC filing help to ensure their trustworthiness and proficiency. Look for established firms with experience in tax and payroll services, or consider connecting to trusted accounting companies or tax professionals who use ERC submitting support.
Remember that while these business can provide valuable assistance, it’s always a great idea to have a basic understanding of the ERC requirements and process yourself. This will help you make informed choices and ensure accurate filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief steps. The objective of the ERC is to motivate companies to maintain and pay their staff members throughout the pandemic, even if their operations have actually been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to qualified employers, including for-profit organizations, tax-exempt companies, and particular governmental entities. To certify, companies need to meet one of two criteria:.
The business operations were totally or partly suspended due to a federal government order related to COVID-19.
The business experienced a significant decrease in gross invoices. As pointed out previously, for 2021, a significant decline is specified as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a considerable decline 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.
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 percentage (as much as 70%) of qualified earnings paid to workers, consisting of particular health plan expenses. The optimum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, companies that received an Income Security Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 allows businesses to claim the ERC even if they received a PPP loan. The very same wages can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively expanded and enhanced, permitting eligible employers to declare the credit for certified earnings paid as far back as March 13, 2020. This retroactive arrangement supplies an opportunity for services to change prior-year income tax return and receive refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their employment tax returns, typically Kind 941. The excess can be reimbursed to the company if the credit goes beyond the quantity of work taxes owed.
It is necessary to keep in mind that the ERC arrangements and eligibility requirements have actually progressed gradually. The very best strategy is to speak with a tax professional or go to the official internal revenue service website for the most detailed and updated details relating to the ERC, consisting of any recent legislative changes or updates.
To receive the ERC, a business should satisfy among the following requirements:.
The business operations were completely or partially suspended due to a federal government order related to COVID-19.
The business experienced a considerable decrease in gross receipts. 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 considerable decrease is defined as a 20% decline in gross receipts compared to the very same quarter in 2019, or a 20% decline in gross receipts compared to the right away preceding quarter.
The ERC is readily available to companies of all sizes, consisting of tax-exempt organizations, however there are some exceptions. For example, federal government entities and organizations that got a PPP loan may have constraints on declaring the credit.
The process for claiming the ERC includes finishing the required types and consisting of the credit on your work income tax return (normally Kind 941). The exact time it requires to process the credit can vary based upon several aspects, consisting of the complexity of your business and the work of the internal revenue service. It’s advised to speak with a tax professional for guidance specific to your situation.
There are numerous business that can aid with the process of claiming the ERC. These include accounting firms, tax advisory services, and payroll service providers. Some well-known companies that offer assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research study and contact these business directly to ask about their fees and services.
Please keep in mind that the information provided here is based upon general understanding and might not show the most recent updates or modifications to the ERC. It is essential to talk to a tax expert or check out the main IRS site for the most updated and precise info concerning eligibility, claiming procedures, and available assistance.
Less than 100. The credit is based if the employer had 100 or fewer workers on average in 2019.
on salaries paid to all workers whether they actually worked or not. In other words, even if the.
workers worked full-time and made money for full time work, the employer still gets the credit.
Greater than 100. If the company had more than 100 staff members usually in 2019, then the credit is.
allowed only for earnings paid to workers who did not work throughout the calendar quarter.
In both cases, “earnings” consists of not simply cash payments however also a portion of the expense of company.
provided health care. Do Part Time Employees Count For Employee Retention Credit
Employers can be immediately compensated for the credit by lowering the quantity of payroll taxes they.