Lets talk first about Employee Retention Credit For Owners :
Our team here what do these men doing everyone in this space is assisting teach individuals about ERC and uh constantly supply a stunning breakfast and have individuals truly learn about the program we should head to the space where we have the ability to display some of the checks that we are getting for business and I want to see that what is this this is uh hundreds of millions of dollars actually Kevin hundreds of countless dollars so these are duplicate copies of the letters that go to clients confirming that the check is on the method I mean you understand if you just start to 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 suggest it’s simply I imply think about the number of real customers 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 internal revenue service heading to the customer so that’s how you’re able to track it you know when you
receive this you understand the check is gone for sure and that’s when they pay so they don’t pay anything up until they in fact get the money they don’t pay bottom line Wonder trust anything until this letter is confirmed the check is on the way they transfer it into their savings account and they can truly trust Wonder trust that the procedure has been completed and how many you believe you have actually processed because you began this we’re about 35 000 of these for
about 6 billion dollars wow so plainly they know what they’re doing which’s what you need you require experts on the other end of the phone to process this and get it to where you get one of these that’s what matters all right Mr Terrific here you’re at my YouTube channel we’re talking about something actually crucial today the employee retention credit which the majority of you have never heard of I certainly hadn’t become aware of it up until extremely recently and discovered a lot about it due to the fact that this is most likely the most affordable cost of capital for any small business anywhere
anytime if you have staff members in between 5 and five hundred so I’ve got the expert with me this is Josh Fox he’s the creator and CEO of bottom line Concepts they’re the largest processor of these ERC credits this is a 170 page program so it’s challenging this isn’t like PPP we simply call up 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 all of us about it and how to get it and why I’ve ended up being yes the Ambassador and paid spokesperson for this I like this program it’s disappearing soon you got to discover all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just begin there so during the Trump Administration when President Trump was enacted they created the cares Act and the cares act provided services three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone it makes a big distinction right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the cash cash payroll tax refund fine go on sorry I just have to ensure we got that point I imply that’s a huge difference a loan versus money money I like money 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 beautiful difficult check in the mail where you get real cash from the IRS all right so let’s discuss how it works due to the fact that it sounds like to me if it’s a if it’s employee retention credit that individual had to be a staff member so I’m going to make the Assumption this cash is not for the owner not for individuals on the cap table not for shareholders it’s for employees right you needed to have actually owned a business however it’s based upon you having W-2 employees 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 very 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 3 and 4 of 2020 and you had quarters one 2 and 3 of 2021. fine so that’s how it’s determined you have to be on the W-2 throughout that period now let’s talk my favorite part money how much can you return per employee that was on a W-2 in those six quarters so the computation in 2020 to be precise Kevin is 50 of the staff member’s salary to a maximum 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 a maximum of 7 thousand per quarter how did that take place um they simply changed the rules in.
2021 versus since the chaos 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 approximately five thousand Max and after that what takes place 21 000 Max in 2021 oh that’s how you develop twenty 6 thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty 6 thousand dollars per staff member that is since that’s a lot of cash it is now there’s a caution here the PPP cash would need to be decreased 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 on average Kevin is if you took PPP cash someplace 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 employees and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s big obviously now the huge concern is why does no one understand about this since look when I initially heard about this when I initially met Josh you know I have actually got lots of financial investments in great deals of companies I’m a significant advocate for entrepreneurship in America and make many many financial investments in business owners of which many suffered through the pandemic when I initially became aware of this I called BS I do not think it due to the fact that I use the PPP we went through the cash center Banks to get it it was really easy to do we had our CEOs call the banks they got their loans which were well deserved and we used them sensibly 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 called to my political leader good friends Governor Senators they didn’t understand about it I suggest that’s how you understand that’s how false information is that there’s no details out there then a bunch of people told me well you can’t get it due to the fact that 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 interesting you’re discussing the banks Kevin because in the PPP loan procedure the federal government made it extremely clear that if you desired a PPP loan you would call Wells Fargo Citibank Bank of America any of the huge banks in our nation 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 chaos since keep in mind in the initial cares act you could refrain from doing 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 refraining from doing ERC due to the fact that it’s not alone so you’re getting a tax refund so the government never ever made it clear to anybody about how to.
do this does your CFO understand how to do this not actually he or she’s never done it before 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 accounting professional’s never done this prior to unless you have an account that went into this organization and bottom line my company Kevin has been in business considering that 2009 and we’ve been dealing with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 companies so a lot of our huge big business clients have dealt with bottom line to recuperate other government programs we have actually done sales tax and utilize tax joblessness tax work opportunity tax credits research and development tax credits unclaimed home real estate tax all of these other federal government programs.
The staff member 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 approximately $10,000 in salaries paid by an.
Since of COVID-19 or whose gross receipts, company whose organization is totally or partially suspended.
decrease by more than 50%.
1. The credit is available to all employers despite size consisting of tax exempt companies. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) small.
organizations who take Small company 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 organization is fully or partially suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross receipts are below 50% of the similar quarter in 2019. When the.
company’s gross invoices exceed 80% of a similar quarter in 2019 they no longer certify.
after completion of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the qualifying wages paid up to $10,000 in total.
It is effective for incomes paid after March 13th and before December 31, 2020.
The definition of qualifying incomes varies by whether an employer had, on average, more or less than.
100 staff members in 2019.
Business that concentrate on ERC filing support typically offer expertise and assistance to help companies browse the complex process of claiming the credit. They can use different services, including:.
How is the employee retention credit calculated? Employee Retention Credit For Owners
Eligibility Assessment: These business will examine your business’s eligibility for the ERC based upon factors such as your market, income, and operations. If you meet the requirements for the credit and identify the optimum credit amount you can claim, they can assist identify.
Paperwork and Calculation: ERC filing services will assist in gathering the necessary documentation, such as payroll records and financial declarations, to support your claim. They will likewise help compute the credit amount based upon qualified incomes and other qualifying costs.
Retroactive Claim Review: If you are eligible to declare the ERC for previous quarters, these business can review your past payroll records and financials to recognize possible opportunities for retroactive credits. They can help you modify previous income tax return to declare these refunds.
Filing Assistance: Business concentrating on ERC filings will prepare and send the essential kinds and documentation in your place. This consists of completing Type 941 or any other required tax return.
Compliance and Updates: ERC policies and assistance have evolved over time. These companies stay updated with the latest changes and guarantee that your filings comply with the most present standards. They can also supply ongoing assistance if the internal revenue service demands extra info or performs an audit related to your ERC claim.
It is necessary to research study and veterinarian any company using ERC filing support to ensure their trustworthiness and knowledge. Look for established companies with experience in tax and payroll services, or consider reaching out to relied on accounting companies or tax professionals who provide ERC filing assistance.
Remember that while these companies can offer important support, it’s constantly a great idea to have a basic understanding of the ERC requirements and procedure yourself. This will help you make notified choices and ensure accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief procedures. The goal of the ERC is to encourage organizations to retain 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 available to eligible employers, including for-profit organizations, tax-exempt companies, and specific governmental entities. To qualify, companies need to fulfill one of two criteria:.
Business operations were fully or partially suspended due to a government order related to COVID-19.
Business experienced a substantial decline in gross receipts. As discussed earlier, for 2021, a substantial decrease is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decrease 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.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount amounts to a percentage (up to 70%) of qualified earnings paid to workers, consisting of particular health insurance expenses. The maximum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, services that received a Paycheck Protection Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 permits services to claim the ERC even if they received a PPP loan. The exact same incomes can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and improved, allowing eligible companies to claim the credit for certified incomes paid as far back as March 13, 2020. This retroactive arrangement provides an opportunity for businesses to change prior-year income tax return and get refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their employment income tax return, normally Kind 941. If the credit exceeds the quantity of work taxes owed, the excess can be reimbursed to the employer.
It’s important to keep in mind that the ERC provisions and eligibility requirements have progressed over time. The best strategy is to speak with a tax expert or visit the main IRS website for the most updated and in-depth information regarding the ERC, consisting of any current legislative modifications or updates.
To get approved for the ERC, a service must meet one of the following criteria:.
The business operations were fully or partially suspended due to a government order related to COVID-19.
Business experienced a considerable decline in gross receipts. For 2021, a significant decrease is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decrease is specified as a 20% decline in gross invoices 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 services of all sizes, including tax-exempt companies, but there are some exceptions. For example, government entities and businesses that received a PPP loan may have restrictions on claiming the credit.
The procedure for claiming the ERC involves finishing the required kinds and including the credit on your employment tax return (normally Kind 941). The exact time it requires to process the credit can differ based on numerous factors, consisting of the complexity of your company and the workload of the IRS. It’s advised to consult with a tax expert for guidance specific to your scenario.
There are several business that can aid with the process of declaring the ERC. These consist of accounting firms, tax advisory services, and payroll company. Some well-known business that use help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research and get in touch with these companies straight to ask about their fees and services.
Please note that the info offered here is based upon general understanding and might not show the most recent updates or modifications to the ERC. It’s important to consult with a tax professional or check out the main internal revenue service site for the most accurate and up-to-date details relating to eligibility, claiming procedures, and available support.
Less than 100. If the employer had 100 or fewer employees typically in 2019, then the credit is based.
on wages paid to all workers whether they in fact worked or not. Simply put, even if the.
staff members worked full-time and earned money for full time work, the company still gets the credit.
Greater than 100. If the company had more than 100 employees typically in 2019, then the credit is.
enabled just for wages paid to employees who did not work throughout the calendar quarter.
In both cases, “salaries” includes not just cash payments but likewise a portion of the expense of employer.
supplied healthcare. Employee Retention Credit For Owners
Employers can be instantly repaid for the credit by lowering the amount of payroll taxes they.