Lets talk first about Employee Retention Credit And Owner Wages :
Our team here what do these men doing everybody in this space is helping teach people about ERC and uh constantly provide a lovely breakfast and have individuals actually learn more about the program we should head to the space where we are able to show some of the checks that we are getting for business and I want to see that what is this this is uh hundreds of countless dollars actually Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to clients verifying that the check is on the way I indicate you know if you just start to take a look at some of these here I imply this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s simply I suggest think about how many 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 verified and the check is on the mail in the mail from the IRS heading to the client so that’s how you’re able to track it you know when you
get this you know the check is opted for sure and that’s when they pay so they do not pay anything until they really receive the cash they do not pay bottom line Wonder trust anything till this letter is confirmed the check is on the way they transfer it into their bank account and they can really rely on Wonder trust that the process has been finished and how many you think you’ve processed because you started this we have to do with 35 000 of these for
about six billion dollars wow so clearly they know what they’re doing and that’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 Terrific here you’re at my YouTube channel we’re talking about something actually crucial today the staff member retention credit which most of you have never become aware of I definitely hadn’t heard of it up until really recently and learned a lot about it since this is probably the lowest expense of capital for any small business anywhere
anytime if you have staff members between 5 and five hundred so I have actually got the expert with me this is Josh Fox he’s the creator and CEO of bottom line Concepts they’re the biggest processor of these ERC credits this is a 170 page program so it’s difficult this isn’t like PPP we just contact 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 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 discover everything about it let’s talk worker retention credit Josh Fox what is an ERC let’s simply begin there so throughout 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 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 cash payroll tax refund fine go on sorry I simply have to ensure we got that point I indicate that’s a huge difference a loan versus cash money I like money money that’s what we’re discussing 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 beautiful tough check in the mail where you get actual money from the internal revenue service all right so let’s speak about how it works since it seems like to me if it’s a if it’s staff member retention credit that person needed to be a staff member so I’m going to make the Presumption this cash is not for the owner not for people on the cap table not for shareholders it’s for staff members right you had to have owned a service but it’s based on you having W-2 employees 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 very first 6 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 two and 3 of 2021. okay so that’s how it’s determined you need to be on the W-2 during that period now let’s talk my favorite part money how much can you return per worker that was on a W-2 in those 6 quarters so the estimation in 2020 to be specific Kevin is 50 of the staff member’s salary to a maximum of 5 thousand dollars per staff member for the year of 2020 and in 2021 the numbers increased to 70 of the worker’s income to an optimum of seven thousand per quarter how did that occur um they simply changed the rules in.
2021 versus since the turmoil of the pandemic so they wished to even get more to keep those employees 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 occurs 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 staff member that is because that’s a great deal of money it is now there’s a caveat here the PPP cash would have to be lowered from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would lower the 26 000 so what we’re seeing on average Kevin is if you took PPP money somewhere around 10 thousand dollars an individual 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 IRS so it’s substantial obviously now the huge question is why does no one know about this due to the fact that appearance when I first found out about this when I initially satisfied Josh you know I have actually got lots of investments in great deals of business I’m a major advocate for entrepreneurship in America and make many numerous financial investments in entrepreneurs of which many suffered through the pandemic when I initially heard about this I called BS I do not believe it due to the fact that I utilize the PPP we went through the money center Banks to get it it was very easy to do we had our CEOs call the banks they got their loans which were well been worthy of and we utilized them sensibly to survive throughout the pandemic so when I found out about this I said nah it can’t be true but when I dug around I even contacted us to my politician pals Guv Senators they didn’t understand about it I imply that’s how you understand that’s how false information is that there’s no info out there then a bunch of individuals informed me well you can’t get it because you took the PPP also not real so let’s ask Josh why does no one know about the worker retention credit you understand what’s interesting you’re speaking about the banks Kevin because in the PPP loan process 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 just process process that’s all um and here there was mayhem because remember in the original cares act you could refrain from doing both programs so if you had done PPP you could refrain from doing ERC in the original program and when they altered the law in 2021 the banks were not doing ERC because 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 previously 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 company 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 actually been in business given that 2009 and we have actually been working with the federal government and the state federal government to recover cash for Fortune 500 Fortune 1000 companies so a great deal of our big huge corporate clients have actually dealt with bottom line to recover other government programs we have actually done sales tax and use tax unemployment tax work chance tax credits research and development tax credits unclaimed home property tax all of these other federal government programs.
The staff member retention tax credit is a broad based refundable tax credit created to motivate.
companies to keep employees on their payroll. The credit is 50% of approximately $10,000 in incomes paid by an.
Due to the fact that of COVID-19 or whose gross invoices, company whose business is totally or partially suspended.
decline by more than 50%.
1. The credit is offered to all employers despite size consisting of tax exempt organizations. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) little.
companies who take Small company Loans.
2. To certify, the employer has to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s organization is fully or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross receipts are below 50% of the comparable quarter in 2019. Once the.
company’s gross receipts exceed 80% of a comparable quarter in 2019 they no longer qualify.
after the end of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the qualifying incomes paid up to $10,000 in overall.
It works for incomes paid after March 13th and prior to December 31, 2020.
The meaning of certifying salaries varies by whether an employer had, typically, basically than.
100 workers in 2019.
Business that specialize in ERC filing help usually provide competence and support to assist services browse the intricate procedure of claiming the credit. They can offer various services, including:.
How is the employee retention credit calculated? Employee Retention Credit And Owner Wages
Eligibility Evaluation: These companies will examine your company’s eligibility for the ERC based upon factors such as your industry, earnings, and operations. They can help determine if you fulfill the requirements for the credit and determine the maximum credit quantity you can declare.
Documents and Computation: ERC filing services will help in collecting the needed paperwork, such as payroll records and monetary statements, to support your claim. They will also assist calculate the credit quantity based on eligible earnings and other certifying expenses.
Retroactive Claim Evaluation: If you are eligible to claim the ERC for prior quarters, these business can review your past payroll records and financials to identify possible opportunities for retroactive credits. They can help you change prior tax returns to claim these refunds.
Filing Help: Business concentrating on ERC filings will prepare and submit the necessary forms and paperwork on your behalf. This includes finishing Type 941 or any other required tax forms.
Compliance and Updates: ERC guidelines and guidance have actually progressed gradually. These business stay upgraded with the latest modifications and make sure that your filings comply with the most current standards. They can also supply continuous assistance if the IRS requests additional details or conducts an audit related to your ERC claim.
It is necessary to research and vet any business using ERC filing help to ensure their reliability and proficiency. Search for established companies with experience in tax and payroll services, or think about connecting to trusted accounting companies or tax experts who use ERC submitting assistance.
Bear in mind that while these companies can offer important assistance, it’s always an excellent idea to have a basic understanding of the ERC requirements and process yourself. This will help you make notified choices and ensure precise filings.
The Worker 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 organizations to maintain and pay their employees during the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to eligible employers, including for-profit businesses, tax-exempt companies, and specific governmental entities. To qualify, companies should fulfill one of two requirements:.
The business operations were fully or partially suspended due to a federal government order related to COVID-19.
The business experienced a significant decrease in gross receipts. As discussed earlier, for 2021, a substantial decline is defined as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decline in gross invoices compared to the very same quarter in 2019, or a 20% decline in gross invoices compared to the instantly preceding quarter.
Credit Quantity: 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 certified incomes paid to employees, consisting of certain health insurance 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: At first, organizations that got a Paycheck Defense Program (PPP) loan were not eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 allows organizations to declare the ERC even if they got a PPP loan. The very same earnings 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, permitting eligible employers to declare the credit for qualified incomes paid as far back as March 13, 2020. This retroactive arrangement provides a chance for companies to amend prior-year tax returns and get refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their employment income tax return, typically Kind 941. The excess can be reimbursed to the employer if the credit surpasses the quantity of employment taxes owed.
It is essential to keep in mind that the ERC provisions and eligibility requirements have actually evolved with time. The best strategy is to speak with a tax professional or check out the official IRS site for the most up-to-date and in-depth information regarding the ERC, consisting of any current legislative modifications or updates.
To qualify for the ERC, an organization must meet one of the following requirements:.
Business operations were completely or partially suspended due to a government order related to COVID-19.
The business experienced a considerable decline in gross receipts. For 2021, a significant decrease is defined as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decline in gross receipts compared to the right away preceding quarter.
The ERC is available to companies of all sizes, including tax-exempt companies, however there are some exceptions. Government entities and businesses that received a PPP loan may have constraints on declaring the credit.
The procedure for declaring the ERC includes finishing the required types and including the credit on your work income tax return (generally Form 941). The exact time it takes to process the credit can vary based upon numerous elements, consisting of the complexity of your organization and the work of the internal revenue service. It’s recommended to speak with a tax professional for assistance particular to your scenario.
There are several companies that can help with the procedure of declaring the ERC. Some widely known companies that use assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the info provided here is based upon general knowledge and may not show the most current updates or changes to the ERC. It is essential to speak with a tax expert or visit the official internal revenue service site for the most accurate and updated info relating to eligibility, declaring treatments, and readily available assistance.
Less than 100. The credit is based if the employer had 100 or less staff members on average in 2019.
on wages paid to all staff members whether they in fact worked or not. Simply put, even if the.
workers worked full-time and made money for full-time work, the employer still gets the credit.
Greater than 100. The credit is if the employer had more than 100 staff members on average in 2019.
permitted only for incomes paid to workers who did not work during the calendar quarter.
In both cases, “earnings” includes not just money payments but also a portion of the expense of company.
offered healthcare. Employee Retention Credit And Owner Wages
Employers can be instantly compensated for the credit by minimizing the amount of payroll taxes they.