Lets talk first about Employee Retention Credit Wages Paid To Owner :
Our team here what do these guys doing everyone in this space is assisting teach individuals about ERC and uh constantly supply a lovely breakfast and have individuals actually learn about the program we must head to the space where we are able to display a few of the checks that we are getting for companies and I ‘d like to see that what is this this is uh numerous countless dollars literally Kevin numerous countless dollars so these are replicate copies of the letters that go to clients confirming that the check is on the method I imply you know if you just begin to take a look at a few of these here I indicate this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s just I mean think of the number of actual 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 IRS heading to the customer so that’s how you have the ability to track it you know when you
receive this you know the check is chosen sure and that’s when they pay so they do not pay anything until they really get the cash 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 checking account and they can truly trust Wonder trust that the procedure has been completed and how many you think you have actually processed since you started this we have to do with 35 000 of these for
about 6 billion dollars wow so plainly they understand what they’re doing which’s what you require you require 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 Fantastic here you’re at my YouTube channel we’re speaking about something actually crucial today the staff member retention credit which most of you have actually never heard of I definitely hadn’t become aware of it up until very 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 staff members between 5 and five hundred so I’ve got the professional with me this is Josh Fox he’s the founder 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 just phone your bank supervisor and say 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 have actually become yes the Ambassador and paid spokesperson for this I like this program it’s going away very soon you got to discover all about it let’s talk employee 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 offered services 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody it makes a big distinction right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
remedy the cash money payroll tax refund fine go on sorry I just have to ensure we got that point I suggest that’s a huge difference a loan versus money money I like money cash 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 initial cares Act is the ERC and yes Kevin it is a stunning tough check in the mail where you get actual cash from the internal revenue service all right so let’s speak about how it works due to the fact that it seems like to me if it’s a if it’s employee retention credit that person needed to be a worker so I’m going to make the Assumption this money is not for the owner not for individuals on the cap table not for investors it’s for workers right you needed to have actually owned a service however it’s based on you having W-2 workers in America not 10.99. As long as you had W-2 staff members 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 appropriate so there were 6 quarters the program was open well stroll us through the 6 quarters so you had quarters two three and four of 2020 and you had quarters one two and three of 2021. all right so that’s how it’s measured you need to be on the W-2 during that period now let’s talk my favorite part money just how much can you return per worker that was on a W-2 in those 6 quarters so the estimation in 2020 to be precise Kevin is 50 of the employee’s income to an optimum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the worker’s income to a maximum of 7 thousand per quarter how did that occur um they just altered the rules in.
2021 versus because the turmoil of the pandemic so they wanted to even get more to keep those workers on payroll 100 so if you can get 5 000 per person Max in twenty that was 50 in 2020 up to five thousand Max and then what happens 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 lot of money it is now there’s a caveat here the PPP cash would have to be decreased from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would minimize the 26 000 so what we’re seeing on average Kevin is if you took PPP cash somewhere around 10 thousand dollars an individual so let’s say hypothetically you owned a restaurant in New York City where I’m from and you had a hundred employees and you took PPP money you would still get a million dollar in the mail from the internal revenue service so it’s huge undoubtedly now the big concern is why does no one learn about this since appearance when I initially found out about this when I initially satisfied Josh you understand I’ve got great deals of investments in great deals of business I’m a major supporter for entrepreneurship in America and make lots of lots of financial investments in entrepreneurs of which lots of suffered through the pandemic when I first found out about this I called BS I don’t think it since I utilize 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 been worthy of and we utilized them wisely 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 called to my political leader buddies Guv Senators they didn’t know about it I suggest that’s how you know that’s how misinformation is that there’s no details out there then a bunch of people informed me well you can’t get it since you took the PPP also not true so let’s ask Josh why does nobody understand about the staff member retention credit you know what’s interesting you’re speaking about the banks Kevin since in the PPP loan process the federal government made it very clear that if you wanted 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 process procedure that’s all um and here there was turmoil due to the fact that remember in the original cares act you could not do both programs so if you had done PPP you could not do ERC in the original program and when they changed the law in 2021 the banks were not doing ERC since 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 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 accountant’s never done this prior to unless you have an account that entered into this company and bottom line my firm Kevin has actually been in business because 2009 and we have actually been dealing with the federal government and the state government to recover money for Fortune 500 Fortune 1000 business so a great deal of our huge huge corporate customers have worked with bottom line to recuperate other government programs we’ve done sales tax and use tax unemployment tax work opportunity tax credits research and development tax credits unclaimed home real estate tax all of these other federal government programs.
The worker retention tax credit is a broad based refundable tax credit created to motivate.
employers to keep employees on their payroll. The credit is 50% of up to $10,000 in salaries paid by an.
company whose organization is fully or partly suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
1. The credit is available to all employers regardless of size consisting of tax exempt companies. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
services who take Small company Loans.
2. To certify, the employer needs to meet one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s service is fully or partly suspended by government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross invoices are listed below 50% of the similar quarter in 2019. When the.
employer’s gross invoices go above 80% of an equivalent quarter in 2019 they no longer certify.
after completion of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the qualifying earnings paid up to $10,000 in total.
It is effective for incomes paid after March 13th and before December 31, 2020.
The meaning of certifying incomes differs by whether an employer had, on average, basically than.
100 workers in 2019.
Companies that specialize in ERC filing support normally offer knowledge and assistance to help companies browse the intricate procedure of declaring the credit. They can offer various services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Wages Paid To Owner
Eligibility Evaluation: These business will evaluate your service’s eligibility for the ERC based upon elements such as your market, revenue, and operations. If you fulfill the requirements for the credit and recognize the optimum credit quantity you can declare, they can help identify.
Paperwork and Computation: ERC filing services will help in gathering the required documents, such as payroll records and financial declarations, to support your claim. They will also help compute the credit amount based upon qualified incomes and other qualifying expenditures.
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 recognize prospective opportunities for retroactive credits. They can help you change prior income tax return to declare these refunds.
Filing Support: Companies focusing on ERC filings will prepare and send the needed kinds and documentation in your place. This includes completing Form 941 or any other necessary tax return.
Compliance and Updates: ERC policies and guidance have progressed in time. These business remain upgraded with the latest modifications and guarantee that your filings comply with the most current guidelines. They can also offer ongoing assistance if the internal revenue service requests additional details or performs an audit related to your ERC claim.
It is essential to research study and vet any business using ERC filing assistance to ensure their reliability and know-how. Look for recognized firms with experience in tax and payroll services, or consider connecting to trusted accounting firms or tax experts who use ERC submitting support.
Remember that while these companies can supply important assistance, it’s always an excellent concept to have a fundamental understanding of the ERC requirements and procedure yourself. This will help you make informed choices and ensure precise filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief steps. The goal of the ERC is to encourage businesses to keep and pay their employees during the pandemic, even if their operations have been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is available to eligible employers, consisting of for-profit services, tax-exempt organizations, and certain governmental entities. To certify, companies must satisfy one of two requirements:.
Business operations were totally or partially suspended due to a federal government order related to COVID-19.
Business experienced a considerable decline in gross receipts. As discussed earlier, for 2021, a substantial decline is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decrease 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 quantity amounts to a percentage (up to 70%) of qualified incomes paid to workers, consisting of specific health plan 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, organizations that received an Income 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 same salaries can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and enhanced, enabling qualified employers to declare the credit for certified wages paid as far back as March 13, 2020. This retroactive provision provides an opportunity for companies to modify prior-year tax returns and get refunds.
Claiming the Credit: Companies can declare the ERC by reporting it on their work tax returns, generally Type 941. If the credit surpasses the quantity of work taxes owed, the excess can be refunded to the employer.
It is essential to keep in mind that the ERC provisions and eligibility criteria have developed in time. The best strategy is to consult with a tax expert or check out the official IRS site for the most in-depth and up-to-date info relating to the ERC, consisting of any recent legislative modifications or updates.
To get approved for the ERC, a service must fulfill among the following requirements:.
Business operations were completely or partly suspended due to a federal government order related to COVID-19.
Business experienced a significant decrease in gross receipts. For 2021, a substantial decrease is specified as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019, or a 20% decrease in gross receipts compared to the immediately preceding quarter.
The ERC is readily available to companies of all sizes, consisting of tax-exempt companies, however there are some exceptions. For instance, federal government entities and companies that got a PPP loan might have restrictions on declaring the credit.
The procedure for declaring the ERC includes completing the required types and including the credit on your employment tax return (generally Form 941). The exact time it takes to process the credit can differ based on several aspects, consisting of the complexity of your company and the work of the internal revenue service. It’s advised to talk to a tax expert for assistance particular to your circumstance.
There are several business that can aid with the process of claiming the ERC. These include accounting companies, tax advisory services, and payroll company. Some well-known business that offer support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research study and contact these business straight to inquire about their fees and services.
Please note that the info supplied here is based upon general understanding and may not reflect the most recent updates or modifications to the ERC. It’s important to seek advice from a tax expert or visit the main IRS website for the most accurate and up-to-date information regarding eligibility, declaring treatments, and readily available help.
Less than 100. The credit is based if the company had 100 or fewer workers on average in 2019.
on earnings paid to all employees whether they in fact worked or not. To put it simply, even if the.
staff members worked full time and got paid for full-time work, the company still gets the credit.
Greater than 100. The credit is if the company had more than 100 employees on average in 2019.
allowed only for wages paid to staff members who did not work during the calendar quarter.
In both cases, “earnings” includes not simply money payments but also a part of the cost of employer.
offered healthcare. Employee Retention Credit Wages Paid To Owner
Companies can be instantly reimbursed for the credit by minimizing the quantity of payroll taxes they.