Lets talk first about Cares Act Employee Retention Credit Self Employed :
Our team here what do these people doing everyone in this room is assisting teach individuals about ERC and uh always provide a stunning breakfast and have people truly discover the program we need to head to the room where we are able to show a few of the checks that we are getting for companies and I ‘d like to see that what is this this is uh hundreds of millions of dollars actually Kevin hundreds of countless dollars so these are replicate copies of the letters that go to customers validating that the check is on the way I indicate you know if you simply 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 mean it’s just I mean think about how many real customers that went through the program yeah this is the very end this is the party at the end when the check is confirmed the numbers are verified and the check is on the mail in the mail from the internal revenue service heading to the customer so that’s how you’re able to track it you know when you
receive this you know the check is chosen sure and that’s when they pay so they don’t pay anything up until they actually get the cash they do not pay bottom line Wonder trust anything until this letter is confirmed the check is on the way they deposit it into their savings account and they can genuinely rely on Wonder trust that the procedure has actually been completed and how many you think you’ve processed because you began this we have to do with 35 000 of these for
about six billion dollars wow so clearly they understand 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 the majority of you have actually never heard of I certainly hadn’t heard of it up until extremely recently and found out a lot about it due to the fact that this is most likely the most affordable cost of capital for any small business anywhere
anytime if you have workers in between five and five hundred so I have actually got the professional with me this is Josh Fox he’s the founder and CEO of bottom line Ideas 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 simply call your bank manager and say give 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 love this program it’s going away soon you got to learn all 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 developed the cares Act and the cares act offered services three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody it makes a huge difference right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
remedy the money cash payroll tax refund all right go on sorry I just need to make certain we got that point I mean that’s a big difference a loan versus money money I like cash cash that’s what we’re talking about 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 initial cares Act is the ERC and yes Kevin it is a beautiful difficult check in the mail where you get real money from the IRS all right so let’s speak about how it works because it seems like to me if it’s a if it’s staff member 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 shareholders it’s for staff members right you needed to have owned a service but it’s based upon you having W-2 employees in America not 10.99. so 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 right so there were six quarters the program was open well stroll us through the six quarters so you had quarters 2 three and 4 of 2020 and you had quarters one 2 and three of 2021. okay so that’s how it’s determined you have to be on the W-2 during that duration now let’s talk my preferred part money just how much can you return per worker 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 wage to a maximum 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 an optimum of seven thousand per quarter how did that happen um they just changed the rules in.
2021 versus because the turmoil of the pandemic so they wanted 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 up to five 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 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 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 two you would lower the 26 000 so what we’re seeing usually Kevin is if you took PPP cash 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 cash you would still get a million dollar in the mail from the internal revenue service so it’s big obviously now the big concern is why does no one know about this due to the fact that look when I first heard about this when I initially fulfilled Josh you know I’ve got lots of investments in great deals of business I’m a major supporter for entrepreneurship in America and make numerous many financial investments in business owners of which lots of suffered through the pandemic when I first found out about this I called BS I do not believe it since I use the PPP we went through the money 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 deserved and we utilized them sensibly to survive during the pandemic so when I became aware of this I stated nah it can’t hold true however when I dug around I even called to my politician good friends Governor Senators they didn’t understand about it I indicate that’s how you know that’s how false information is that there’s no information out there then a bunch of individuals told me well you can’t get it because you took the PPP likewise not real so let’s ask Josh why does no one know about the employee retention credit you understand what’s fascinating you’re discussing the banks Kevin since in the PPP loan procedure 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 huge banks in our country and they would process procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s just procedure procedure that’s all um and here there was mayhem since keep in mind in the original cares act you might refrain from doing both programs so if you had actually done PPP you could refrain from doing ERC in the original program and when they changed the law in 2021 the banks were not doing ERC due to the fact that it’s not alone so you’re getting a tax refund so the federal government never ever made it clear to anyone 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 do not do it the payroll companies yeah a few of them are doing it as a payroll business your accounting professional no your accounting professional’s never done this before unless you have an account that entered into this business and bottom line my company Kevin has been in business considering that 2009 and we’ve been dealing with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 business so a lot of our big big corporate customers have actually dealt 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 developed to motivate.
companies to keep staff members on their payroll. The credit is 50% of up to $10,000 in earnings paid by an.
Because of COVID-19 or whose gross invoices, company whose business is fully or partially suspended.
decline by more than 50%.
1. The credit is offered to all employers regardless of size consisting of tax exempt companies. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) small.
services who take Small company Loans.
2. To certify, the company has to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s organization is fully or partly suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross invoices are listed below 50% of the comparable quarter in 2019. As soon as the.
company’s gross invoices exceed 80% of an equivalent quarter in 2019 they no longer qualify.
after completion of that quarter.
Calculation 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 before December 31, 2020.
The definition of certifying salaries differs by whether a company had, typically, more or less than.
100 staff members in 2019.
Business that focus on ERC filing support generally provide know-how and assistance to help businesses browse the intricate procedure of declaring the credit. They can use various services, consisting of:.
How is the employee retention credit calculated? Cares Act Employee Retention Credit Self Employed
Eligibility Assessment: These companies will examine your service’s eligibility for the ERC based on factors such as your industry, revenue, and operations. They can assist identify if you satisfy the requirements for the credit and determine the optimum credit quantity you can claim.
Documentation and Estimation: ERC filing services will help in collecting the required paperwork, such as payroll records and financial statements, to support your claim. They will also help compute the credit quantity based on eligible incomes and other qualifying expenses.
Retroactive Claim Review: If you are qualified to declare the ERC for prior quarters, these companies can examine your past payroll records and financials to identify prospective chances for retroactive credits. They can help you modify prior tax returns to claim these refunds.
Filing Support: Business focusing on ERC filings will prepare and submit the needed kinds and paperwork in your place. This includes finishing Kind 941 or any other required tax return.
Compliance and Updates: ERC guidelines and assistance have actually evolved gradually. These business stay upgraded with the current changes and make sure that your filings adhere to the most present standards. If the IRS requests additional details or performs an audit associated to your ERC claim, they can also supply continuous support.
It is essential to research study and vet any company offering ERC filing help to ensure their trustworthiness and knowledge. Try to find established companies with experience in tax and payroll services, or consider connecting to trusted accounting companies or tax professionals who offer ERC filing assistance.
Keep in mind that while these business can supply valuable help, it’s always an excellent concept to have a basic understanding of the ERC requirements and process yourself. This will assist you make informed decisions and ensure precise filings.
The Worker Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief procedures. The objective of the ERC is to motivate organizations to keep and pay their workers during the pandemic, even if their operations have actually been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to eligible employers, including for-profit organizations, tax-exempt organizations, and particular governmental entities. To certify, companies should fulfill one of two requirements:.
The business operations were completely or partially suspended due to a government order related to COVID-19.
The business experienced a substantial decline in gross receipts. As pointed out earlier, 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 decline is defined as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross receipts compared to the right away 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 (as much as 70%) of certified salaries paid to staff members, consisting of specific health insurance expenditures. 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, businesses that received an Income Defense Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 permits organizations to declare the ERC even if they got a PPP loan. Nevertheless, the exact same salaries can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and enhanced, allowing eligible employers to claim the credit for certified earnings paid as far back as March 13, 2020. This retroactive arrangement supplies an opportunity for services to modify prior-year tax returns and receive refunds.
Declaring the Credit: Employers can declare the ERC by reporting it on their employment income tax return, normally Form 941. The excess can be refunded to the company if the credit exceeds the amount of employment taxes owed.
It is very important to keep in mind that the ERC arrangements and eligibility criteria have developed in time. The very best strategy is to talk to a tax expert or go to the official IRS site for the most current and comprehensive details regarding the ERC, including any recent legislative changes or updates.
To get approved for the ERC, a company needs to satisfy among the following requirements:.
The business operations were fully or partly suspended due to a government order related to COVID-19.
The business experienced a considerable decrease in gross invoices. For 2021, a significant decrease is specified as a 20% decrease 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% decline in gross invoices compared to the immediately preceding quarter.
The ERC is readily available to organizations of all sizes, consisting of tax-exempt organizations, however there are some exceptions. For instance, government entities and organizations that received a PPP loan may have restrictions on claiming the credit.
The procedure for declaring the ERC includes completing the required kinds and including the credit on your employment tax return (usually Type 941). The exact time it requires to process the credit can differ based upon a number of elements, consisting of the complexity of your organization and the workload of the IRS. It’s advised to seek advice from a tax expert for guidance particular to your scenario.
There are numerous business that can help with the procedure of claiming the ERC. Some widely known business that offer support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the details offered here is based upon basic knowledge and might not reflect the most current 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 precise and up-to-date info regarding eligibility, claiming procedures, and readily available support.
Less than 100. The credit is based if the employer had 100 or fewer workers on average in 2019.
on earnings paid to all staff members whether they really worked or not. To put it simply, even if the.
employees worked full time and earned money for full-time work, the employer still gets the credit.
Greater than 100. The credit is if the company had more than 100 workers on average in 2019.
allowed just for earnings paid to workers who did not work throughout the calendar quarter.
In both cases, “salaries” consists of not just cash payments but likewise a part of the expense of employer.
supplied health care. Cares Act Employee Retention Credit Self Employed
Companies can be right away reimbursed for the credit by lowering the amount of payroll taxes they.