Lets talk first about 50 Owner Employee Retention Credit :
Our group here what do these people doing everybody in this room is helping teach individuals about ERC and uh constantly offer a gorgeous breakfast and have individuals truly find out about the program we must head to the room where we have the ability to show some of the checks that we are getting for business and I wish to see that what is this this is uh hundreds of countless dollars literally Kevin hundreds of millions of dollars so these are duplicate copies of the letters that go to clients validating that the check is on the way I imply you know if you simply start to take a look at some of these here I suggest this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s simply I indicate 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 verified the numbers are confirmed 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 understand the check is opted for 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 up until this letter is confirmed the check is on the way they deposit it into their bank account and they can really rely on Wonder trust that the procedure has been ended up and how many you believe you have actually processed because you started this we’re about 35 000 of these for
about 6 billion dollars wow so plainly they understand what they’re doing and that’s what you require you need specialists 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 Wonderful here you’re at my YouTube channel we’re discussing something really essential today the employee retention credit which most of you have actually never ever become aware of I certainly had not heard of it until very just recently and learned a lot about it since this is most likely the lowest expense of capital for any small company anywhere
anytime if you have employees 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 Principles they’re the largest processor of these ERC credits this is a 170 page program so it’s not easy this isn’t like PPP we just call 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 have actually become yes the Ambassador and paid spokesperson for this I love this program it’s going away soon you got to discover everything about it let’s talk employee 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 companies 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 distinction right there 2 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 simply have to make sure we got that point I suggest that’s a huge distinction a loan versus cash money I like cash cash that’s what we’re discussing okay 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 gorgeous tough check in the mail where you get actual money from the IRS all right so let’s discuss how it works because it seems like to me if it’s a if it’s worker retention credit that individual needed to be an employee so I’m going to make the Assumption this cash is not for the owner not for individuals on the cap table not for investors it’s for staff members right you had to have actually owned a service however it’s based upon you having W-2 employees in America not 10.99. As long as you had W-2 workers 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 appropriate so there were six quarters the program was open well walk us through the six quarters so you had quarters 2 three and 4 of 2020 and you had quarters one 2 and 3 of 2021. okay so that’s how it’s measured you have to be on the W-2 during that duration now let’s talk my favorite part money how much can you return per employee that was on a W-2 in those 6 quarters so the calculation in 2020 to be precise Kevin is 50 of the staff member’s income to a maximum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers increased to 70 of the staff member’s wage to a maximum of seven thousand per quarter how did that take place um they just changed the rules in.
2021 versus due to the fact that the chaos 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 approximately 5 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 six thousand dollars per employee that is because that’s a great deal of cash it is now there’s a caveat here the PPP money would need to be minimized from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would decrease the 26 000 so what we’re seeing on average Kevin is if you took PPP money somewhere around ten thousand dollars a person so let’s state hypothetically you owned a dining establishment in New york city 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 internal revenue service so it’s big obviously now the huge question is why does nobody understand about this since appearance when I initially became aware of this when I first met Josh you know I have actually got lots of investments in lots of companies I’m a significant supporter for entrepreneurship in America and make numerous lots of 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 really easy to do we had our CEOs call the banks they got their loans and that were well should have and we utilized them carefully to stay alive throughout the pandemic so when I found out about this I said nah it can’t be true however when I dug around I even called to my political leader pals Governor Senators they didn’t know about it I indicate that’s how you understand that’s how misinformation is that there’s no details out there then a lot of individuals informed me well you can’t get it due to the fact that you took the PPP also not real so let’s ask Josh why does nobody learn about the worker retention credit you know what’s fascinating you’re speaking about the banks Kevin because 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 big 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 turmoil due to the fact that keep in mind in the initial cares act you might refrain from doing both programs so if you had done PPP you might not do 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 federal government never made it clear to anyone about how to.
do this does your CFO understand how to do this not really she or he’s never ever done it before do the banks do it nope the banks don’t do it the payroll companies yeah a few of them are doing it as a payroll company your accountant no your accounting professional’s never done this before unless you have an account that went into this organization and bottom line my company Kevin has actually stayed in business given that 2009 and we have actually been working with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 business so a lot of our big huge corporate clients have dealt with bottom line to recover other federal government programs we have actually done sales tax and utilize tax unemployment tax work chance tax credits research and development tax credits unclaimed property property tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit created to encourage.
companies to keep staff members on their payroll. The credit is 50% of approximately $10,000 in incomes paid by an.
company whose service is fully or partly suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is available to all employers no matter size including tax exempt organizations. There are.
just two exceptions: (1) state and city governments and their instrumentalities and (2) little.
organizations who take Small Business Loans.
2. To qualify, the employer needs to fulfill one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s service is completely 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 go above 80% of a comparable quarter in 2019 they no longer certify.
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 is effective for earnings paid after March 13th and before December 31, 2020.
The definition of qualifying earnings varies by whether an employer had, typically, more or less than.
100 employees in 2019.
Business that concentrate on ERC filing assistance normally offer knowledge and support to help organizations navigate the intricate procedure of declaring the credit. They can provide various services, consisting of:.
How is the employee retention credit calculated? 50 Owner Employee Retention Credit
Eligibility Assessment: These business will examine your business’s eligibility for the ERC based upon elements such as your industry, income, and operations. They can assist identify if you satisfy the requirements for the credit and identify the optimum credit amount you can declare.
Documentation and Computation: ERC filing services will help in gathering the needed documents, such as payroll records and monetary declarations, to support your claim. They will likewise assist calculate the credit amount based upon qualified earnings and other certifying expenditures.
Retroactive Claim Evaluation: If you are eligible to claim the ERC for previous quarters, these business can evaluate your previous payroll records and financials to recognize prospective opportunities for retroactive credits. They can help you amend prior income tax return to claim these refunds.
Filing Support: Business concentrating on ERC filings will prepare and submit the necessary forms and documents in your place. This includes finishing Kind 941 or any other required tax return.
Compliance and Updates: ERC policies and assistance have evolved gradually. These companies stay upgraded with the most recent modifications and make sure that your filings adhere to the most existing guidelines. If the IRS requests additional details or conducts an audit related to your ERC claim, they can likewise supply continuous assistance.
It is necessary to research and vet any business using ERC filing support to ensure their reliability and competence. Search for established companies with experience in tax and payroll services, or think about connecting to trusted accounting companies or tax specialists who offer ERC submitting assistance.
Remember that while these business can offer valuable support, it’s constantly a great concept to have a basic understanding of the ERC requirements and procedure yourself. This will help you make notified decisions and ensure precise filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief measures. The objective of the ERC is to motivate organizations to retain and pay their staff members throughout the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to qualified companies, consisting of for-profit companies, tax-exempt organizations, and specific governmental entities. To certify, companies must meet one of two criteria:.
Business operations were fully or partly suspended due to a federal government order related to COVID-19.
The business experienced a considerable decrease in gross invoices. As discussed previously, for 2021, a significant decline is specified 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% decrease in gross invoices compared to the exact 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 employer’s share of Social Security taxes. The credit quantity amounts to a percentage (up to 70%) of certified incomes paid to employees, consisting of particular health plan expenditures. The maximum credit per staff member is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, organizations that got an Income Protection Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 allows businesses to claim the ERC even if they got a PPP loan. The same earnings can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively broadened and boosted, allowing qualified employers to claim the credit for certified salaries paid as far back as March 13, 2020. This retroactive arrangement provides a chance for companies to modify prior-year tax returns and receive refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their employment tax returns, generally Type 941. If the credit surpasses the quantity of employment taxes owed, the excess can be reimbursed to the employer.
It is necessary to keep in mind that the ERC arrangements and eligibility criteria have evolved in time. The best strategy is to consult with a tax expert or go to the main internal revenue service website for the most updated and comprehensive details relating to the ERC, including any recent legislative modifications or updates.
To get approved for the ERC, a service should meet one of the following requirements:.
Business operations were completely or partially suspended due to a government order related to COVID-19.
Business experienced a substantial decline in gross receipts. 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 decrease is defined as a 20% decline in gross invoices compared to the very same quarter in 2019, or a 20% decrease in gross receipts compared to the right away preceding quarter.
The ERC is readily available to companies of all sizes, consisting of tax-exempt companies, but there are some exceptions. Government entities and businesses that got a PPP loan might have constraints on declaring the credit.
The process for declaring the ERC includes finishing the essential forms and including the credit on your employment tax return (generally Form 941). The exact time it requires to process the credit can vary based upon a number of elements, consisting of the intricacy of your service and the work of the IRS. It’s suggested to consult with a tax expert for guidance specific to your situation.
There are a number of companies that can assist with the procedure of declaring the ERC. Some well-known business that provide help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the information provided here is based upon general understanding and may not reflect the most current updates or changes to the ERC. It’s important to consult with a tax professional or visit the main internal revenue service site for the most current and precise info regarding eligibility, claiming procedures, and available support.
Less than 100. If the employer had 100 or fewer staff members on average in 2019, then the credit is based.
on earnings paid to all staff members whether they actually worked or not. In other words, even if the.
staff members worked full-time and made money for full-time work, the employer still gets the credit.
Greater than 100. If the company had more than 100 employees usually in 2019, then the credit is.
allowed only for earnings paid to staff members who did not work during the calendar quarter.
In both cases, “wages” includes not just cash payments but likewise a portion of the expense of employer.
provided healthcare. 50 Owner Employee Retention Credit
Companies can be instantly repaid for the credit by minimizing the amount of payroll taxes they.