Lets talk first about Employee Retention Credit Owner Compensation :
Our team here what do these people doing everyone in this room is helping teach individuals about ERC and uh constantly supply a gorgeous breakfast and have people truly find out 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 numerous millions of dollars literally Kevin numerous countless dollars so these are duplicate copies of the letters that go to clients verifying that the check is on the method I imply you understand if you just begin 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 imply it’s just I suggest 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 consumer so that’s how you’re able to track it you understand when you
receive this you understand the check is chosen sure and that’s when they pay so they don’t pay anything up until they actually get the money they do not pay bottom line Wonder trust anything till this letter is verified 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 ended up and the number of 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 require 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 speaking about something truly essential today the staff member retention credit which most of you have never become aware of I certainly hadn’t become aware of it up until really just recently and found out a lot about it due to the fact that this is probably the lowest cost of capital for any small business anywhere
anytime if you have staff members between five and five hundred so I’ve got the expert with me this is Josh Fox he’s the founder and CEO of bottom line Principles 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 phone your bank manager and say provide me a loan it doesn’t 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 ended up being yes the Ambassador and paid spokesperson for this I love this program it’s going away very soon you got to learn everything about it let’s talk worker 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 offered organizations 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everybody it makes a big difference right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
fix the money cash payroll tax refund okay go on sorry I just have to make sure we got that point I mean that’s a big difference a loan versus money money I like money money that’s what we’re talking 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 gorgeous difficult check in the mail where you get actual money from the IRS all right so let’s talk about how it works because it sounds like to me if it’s a if it’s staff member 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 people on the cap table not for investors it’s for employees right you had to have actually owned a company but it’s based on you having W-2 workers 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 need to be on payroll in 2020 on the W-2 and you need to be on payroll for the first 6 months of 2021 on the W-2 appropriate so there were six quarters the program was open well walk us through the 6 quarters so you had quarters 2 three and four of 2020 and you had quarters one 2 and 3 of 2021. alright 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 just how much can you return per worker that was on a W-2 in those six quarters so the calculation in 2020 to be exact Kevin is 50 of the employee’s income to a maximum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers escalated to 70 of the employee’s wage to an optimum of 7 thousand per quarter how did that occur um they just altered the rules in.
2021 versus since the turmoil of the pandemic so they wished 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 5 thousand Max and after that what happens 21 000 Max in 2021 oh that’s how you come up with twenty 6 thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per staff member that is because that’s a great deal of money it is now there’s a caution 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 lower the 26 000 so what we’re seeing usually Kevin is if you took PPP cash somewhere around ten 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 workers and you took PPP cash you would still get a million dollar in the mail from the IRS so it’s big clearly now the big question is why does nobody learn about this since look when I first found out about this when I first satisfied Josh you know I have actually got great deals of financial investments in lots of companies I’m a major supporter for entrepreneurship in America and make numerous lots of financial investments in entrepreneurs of which lots of suffered through the pandemic when I first became aware of this I called BS I do not think 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 which were well been worthy of and we utilized them sensibly to survive throughout the pandemic so when I heard about this I stated nah it can’t be true however when I dug around I even called to my political leader good friends Guv Senators they didn’t understand about it I imply that’s how you know that’s how false information is that there’s no info out there then a lot of people told me well you can’t get it due to the fact that you took the PPP also not true so let’s ask Josh why does no one learn about the staff member retention credit you know what’s fascinating you’re discussing the banks Kevin since in the PPP loan process the federal government made it really clear that if you desired a PPP loan you would call Wells Fargo Citibank Bank of America any of the big 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 procedure that’s all um and here there was turmoil because remember in the original cares act you could refrain from doing both programs so if you had actually done PPP you could not do ERC in the initial program and when they changed the law in 2021 the banks were refraining from doing ERC because it’s not alone so you’re getting a tax refund so the federal government never made it clear to any person about how to.
do this does your CFO understand how to do this not really she or he’s never done it in the past do the banks do it nope the banks do not do it the payroll business yeah a few of them are doing it as a payroll business your accounting professional no your accountant’s never ever done this before unless you have an account that went into this company and bottom line my company Kevin has stayed in business considering that 2009 and we’ve been working with the federal government and the state government to recover money for Fortune 500 Fortune 1000 business so a lot of our big big business customers have dealt with bottom line to recover other federal government programs we’ve done sales tax and use tax unemployment tax work chance tax credits research and development tax credits unclaimed property real estate tax all of these other government programs.
The staff member retention tax credit is a broad based refundable tax credit created to motivate.
employers to keep workers on their payroll. The credit is 50% of up to $10,000 in salaries paid by an.
Due to the fact that of COVID-19 or whose gross receipts, employer whose company is completely or partially suspended.
decline by more than 50%.
Accessibility.
1. The credit is available to all companies no matter size including tax exempt organizations. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) small.
services who take Small Business Loans.
2. To qualify, the company needs to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s organization is fully or partially suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross receipts are listed below 50% of the equivalent quarter in 2019. When the.
company’s gross invoices go above 80% of a similar quarter in 2019 they no longer certify.
after the end of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the qualifying salaries paid up to $10,000 in overall.
It works for salaries paid after March 13th and before December 31, 2020.
The meaning of certifying incomes differs by whether a company had, on average, basically than.
100 employees in 2019.
Business that concentrate on ERC filing support normally offer competence and assistance to help organizations browse the complicated process of claiming the credit. They can offer numerous services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Owner Compensation
Eligibility Assessment: These companies will evaluate your business’s eligibility for the ERC based upon elements such as your market, revenue, and operations. They can help determine if you satisfy the requirements for the credit and identify the optimum credit quantity you can claim.
Documents and Calculation: ERC filing services will help in gathering the needed documents, such as payroll records and financial declarations, to support your claim. They will likewise assist determine the credit amount based on eligible salaries and other qualifying expenses.
Retroactive Claim Evaluation: If you are eligible to claim the ERC for previous quarters, these business can examine your past payroll records and financials to determine potential opportunities for retroactive credits. They can help you modify prior income tax return to declare these refunds.
Filing Help: Companies focusing on ERC filings will prepare and send the necessary forms and documentation on your behalf. This consists of completing Form 941 or any other necessary tax return.
Compliance and Updates: ERC guidelines and assistance have evolved with time. These companies stay upgraded with the most recent modifications and ensure that your filings abide by the most present guidelines. They can also supply ongoing assistance if the IRS requests extra info or carries out an audit related to your ERC claim.
It’s important to research study and vet any company providing ERC filing assistance to guarantee their credibility and know-how. Search for recognized firms with experience in tax and payroll services, or consider connecting to trusted accounting companies or tax professionals who offer ERC submitting support.
Keep in mind that while these business can provide valuable help, it’s constantly an excellent idea to have a fundamental understanding of the ERC requirements and process yourself. This will assist you make informed choices and make sure precise filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief steps. The goal of the ERC is to motivate organizations 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 offered to eligible employers, consisting of for-profit services, tax-exempt companies, and certain governmental entities. To certify, employers should satisfy one of two requirements:.
The business operations were fully or partly suspended due to a government order related to COVID-19.
The business experienced a significant decrease in gross invoices. As discussed earlier, for 2021, a significant decline is defined as a 20% decrease in gross receipts compared to the 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 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 is equal to a portion (as much as 70%) of qualified wages paid to employees, consisting of specific health plan expenses. The maximum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, businesses that got a Paycheck Protection Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 allows services to claim the ERC even if they received a PPP loan. However, the very same incomes can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively broadened and boosted, enabling eligible employers to claim the credit for qualified salaries paid as far back as March 13, 2020. This retroactive arrangement supplies an opportunity for services to modify prior-year tax returns and get refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their employment tax returns, normally Kind 941. If the credit goes beyond the amount of work taxes owed, the excess can be reimbursed to the employer.
It is essential to note that the ERC arrangements and eligibility requirements have progressed with time. The best course of action is to seek advice from a tax professional or check out the official internal revenue service website for the most in-depth and updated details relating to the ERC, consisting of any current legal modifications or updates.
To receive the ERC, a service needs to meet one of the following requirements:.
Business operations were completely or partially suspended due to a federal government order related to COVID-19.
Business experienced a substantial decrease in gross receipts. For 2021, a considerable decline is specified as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decline in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
The ERC is available to services of all sizes, including tax-exempt companies, but there are some exceptions. Federal government entities and businesses that received a PPP loan might have restrictions on declaring the credit.
The procedure for claiming the ERC involves finishing the essential kinds and including the credit on your work tax return (generally Form 941). The exact time it requires to process the credit can vary based on a number of elements, consisting of the intricacy of your organization and the work of the internal revenue service. It’s suggested to speak with a tax professional for guidance particular to your scenario.
There are several business that can help with the procedure of claiming the ERC. Some well-known business that offer support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the information supplied here is based upon general knowledge and might not reflect the most recent updates or changes to the ERC. It is necessary to consult with a tax professional or visit the main IRS site for the most current and accurate details regarding eligibility, declaring procedures, and offered assistance.
Less than 100. The credit is based if the company had 100 or less workers on average in 2019.
on earnings paid to all workers whether they actually 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. If the employer had more than 100 employees on average in 2019, then the credit is.
permitted only for wages paid to employees who did not work throughout the calendar quarter.
In both cases, “salaries” consists of not just cash payments however likewise a part of the expense of company.
provided health care. Employee Retention Credit Owner Compensation
Payment.
Companies can be instantly compensated for the credit by reducing the quantity of payroll taxes they.