Lets talk first about Do Shareholder Wages Qualify For Employee Retention Credit :
Our team here what do these guys doing everybody in this room is assisting teach people about ERC and uh constantly supply a gorgeous breakfast and have individuals really find out about the program we should head to the space where we have the ability to show a few of the checks that we are getting for companies and I wish to see that what is this this is uh numerous countless dollars literally Kevin numerous millions of dollars so these are replicate copies of the letters that go to customers confirming that the check is on the method I indicate you understand if you simply start to look at a few of these here I imply this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s just I indicate think about 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 validated the numbers are confirmed and the check is on the mail in the mail from the internal revenue service heading to the consumer so that’s how you’re able to track it you understand when you
get this you understand the check is gone for sure which’s when they pay so they do not pay anything till they in fact receive the money they do not pay bottom line Wonder trust anything until this letter is verified the check is on the way they deposit it into their bank account and they can really trust Wonder trust that the procedure has actually been completed and how many you believe you’ve processed since you began this we have to do with 35 000 of these for
about six billion dollars wow so clearly 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 Fantastic here you’re at my YouTube channel we’re discussing something truly essential today the employee retention credit which the majority of you have actually never ever heard of I certainly had not become aware of it up until really 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 in 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 Ideas they’re the largest processor of these ERC credits this is a 170 page program so it’s hard this isn’t like PPP we just call up your bank supervisor and say offer me a loan it does not 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 representative for this I enjoy this program it’s disappearing soon you got to find out everything about it let’s talk worker retention credit Josh Fox what is an ERC let’s just begin there so throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act offered businesses 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everybody it makes a huge distinction 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 alright go on sorry I just need to make certain we got that point I mean that’s a big distinction a loan versus money money I like cash 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 beautiful hard check in the mail where you get actual cash from the IRS all right so let’s talk about how it works due to the fact that it sounds 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 Presumption this money is not for the owner not for people on the cap table not for investors it’s for workers right you needed to have owned a company but it’s based upon you having W-2 employees in America not 10.99. so as long as you had W-2 workers and you paid federal payroll taxes that’s why you would be qualified so you need to be on payroll in 2020 on the W-2 and you need 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 three and four of 2020 and you had quarters one 2 and three of 2021. all right so that’s how it’s determined you need to be on the W-2 during that duration now let’s talk my favorite part cash how much can you get back per staff member that was on a W-2 in those 6 quarters so the calculation in 2020 to be specific Kevin is 50 of the employee’s salary to an optimum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers escalated to 70 of the employee’s income to an optimum of 7 thousand per quarter how did that take place um they simply changed the rules in.
2021 versus because the turmoil 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 then what takes place 21 000 Max in 2021 oh that’s how you develop twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per employee that is because that’s a lot of money it is now there’s a caution here the PPP money would need to be reduced from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would decrease the 26 000 so what we’re seeing usually 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 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 IRS so it’s big certainly now the huge concern is why does nobody learn about this due to the fact that look when I first became aware of this when I first satisfied Josh you understand I’ve got great deals of financial investments in lots of companies I’m a significant supporter for entrepreneurship in America and make many many investments in business owners of which numerous suffered through the pandemic when I initially became aware of this I called BS I don’t believe it because I utilize 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 and that were well should have and we used them sensibly 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 pals Guv Senators they didn’t understand about it I imply 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 because you took the PPP likewise not real so let’s ask Josh why does no one understand about the employee 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 huge 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 turmoil because remember in the original cares act you might refrain from doing both programs so if you had actually done PPP you might refrain from doing ERC in the initial program and when they altered the law in 2021 the banks were refraining from doing ERC since it’s not alone so you’re getting a tax refund so the government never made it clear to anybody about how to.
do this does your CFO know how to do this not truly she or he’s never done it before do the banks do it nope the banks don’t 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 went into this business and bottom line my company Kevin has actually stayed in business given that 2009 and we have actually been dealing with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 business so a great deal of our huge big business customers have worked with bottom line to recover other government programs we’ve done sales tax and utilize 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.
employers to keep employees on their payroll. The credit is 50% of as much as $10,000 in incomes paid by an.
company whose service is completely or partly suspended because of COVID-19 or whose gross invoices.
decrease by more than 50%.
1. The credit is offered to all employers no matter size including tax exempt organizations. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
businesses who take Small Business Loans.
2. To certify, the company has to satisfy one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s business is fully or partly 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 equivalent quarter in 2019. As soon as the.
company’s gross receipts go above 80% of a similar quarter in 2019 they no longer qualify.
after completion of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the certifying salaries paid up to $10,000 in total.
It works for wages paid after March 13th and prior to December 31, 2020.
The definition of certifying wages varies by whether a company had, typically, more or less than.
100 workers in 2019.
Business that focus on ERC filing support usually provide expertise and support to help organizations navigate the intricate process of claiming the credit. They can use various services, including:.
How is the employee retention credit calculated? Do Shareholder Wages Qualify For Employee Retention Credit
Eligibility Evaluation: These business will evaluate your company’s eligibility for the ERC based upon elements such as your market, earnings, and operations. They can assist determine if you satisfy the requirements for the credit and determine the optimum credit quantity you can declare.
Paperwork and Calculation: ERC filing services will assist in collecting the necessary documents, such as payroll records and monetary statements, to support your claim. They will likewise assist calculate the credit amount based on qualified earnings and other qualifying costs.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for prior quarters, these business can evaluate your previous payroll records and financials to determine possible opportunities for retroactive credits. They can help you change prior tax returns to claim these refunds.
Filing Assistance: Business specializing in ERC filings will prepare and submit the required types and paperwork in your place. This includes finishing Type 941 or any other necessary tax return.
Compliance and Updates: ERC regulations and guidance have actually developed over time. These business stay updated with the most recent modifications and ensure that your filings comply with the most existing guidelines. If the Internal revenue service demands extra info or performs an audit related to your ERC claim, they can likewise offer ongoing assistance.
It is essential to research and vet any business using ERC filing support to ensure their credibility and competence. Search for recognized firms with experience in tax and payroll services, or think about connecting to relied on accounting companies or tax professionals who provide ERC submitting support.
Bear in mind that while these companies can supply important assistance, it’s constantly a good idea to have a fundamental understanding of the ERC requirements and process yourself. This will help you make notified decisions and guarantee accurate filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief measures. The goal of the ERC is to motivate services to maintain and pay their workers during the pandemic, even if their operations have actually been impacted.
Here are some key points 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:.
The business operations were fully or partially suspended due to a federal government order related to COVID-19.
Business experienced a substantial decline in gross receipts. As discussed previously, 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 significant decline is specified as a 20% decrease in gross invoices 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 company’s share of Social Security taxes. The credit amount amounts to a percentage (approximately 70%) of certified wages paid to employees, consisting of certain health plan 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: Initially, services that got a Paycheck Protection Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 enables organizations to declare the ERC even if they received a PPP loan. Nevertheless, the very same wages can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively broadened and enhanced, permitting eligible employers to claim the credit for qualified earnings paid as far back as March 13, 2020. This retroactive provision offers an opportunity for companies to change prior-year tax returns and get refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their work tax returns, usually Form 941. The excess can be refunded to the employer if the credit goes beyond the amount of employment taxes owed.
It is essential to note that the ERC provisions and eligibility requirements have evolved gradually. The very best strategy is to speak with a tax professional or go to the official internal revenue service website for the most in-depth and up-to-date details regarding the ERC, consisting of any current legislative modifications or updates.
To get approved for the ERC, an organization needs to satisfy among the following criteria:.
The business operations were completely or partially suspended due to a federal government order related to COVID-19.
The business experienced a significant decrease in gross invoices. For 2021, a considerable decline is specified as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a substantial decline is specified as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
The ERC is available to businesses of all sizes, including tax-exempt organizations, but there are some exceptions. Government entities and services that got a PPP loan may have constraints on declaring the credit.
The process for claiming the ERC involves finishing the required forms and including the credit on your work tax return (typically Type 941). The exact time it requires to process the credit can vary based upon numerous factors, including the intricacy of your organization and the work of the internal revenue service. It’s suggested to speak with a tax expert for assistance particular to your circumstance.
There are a number of companies that can assist with the process of claiming the ERC. These include accounting companies, tax advisory services, and payroll service providers. Some popular companies that provide support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research and get in touch with these companies directly to inquire about their costs and services.
Please note that the details provided here is based on basic understanding and might not reflect the most recent updates or changes to the ERC. It is very important to speak with a tax professional or check out the main internal revenue service site for the most updated and accurate info concerning eligibility, declaring procedures, and available help.
Less than 100. The credit is based if the employer had 100 or fewer workers on average in 2019.
on earnings paid to all workers whether they really worked or not. In other words, 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 employer had more than 100 staff members typically in 2019, then the credit is.
permitted just for earnings paid to workers who did not work during the calendar quarter.
In both cases, “earnings” consists of not just money payments but also a portion of the cost of company.
supplied health care. Do Shareholder Wages Qualify For Employee Retention Credit
Employers can be instantly compensated for the credit by lowering the quantity of payroll taxes they.