Lets talk first about Do Owner Wages Qualify For Employee Retention Credit :
Our group here what do these people doing everybody in this room is assisting teach individuals about ERC and uh constantly provide a beautiful breakfast and have people truly discover the program we must head to the room where we have the ability to show a few of the checks that we are getting for business and I ‘d like to see that what is this this is uh numerous millions of dollars actually Kevin hundreds of countless dollars so these are replicate copies of the letters that go to customers confirming that the check is on the method I imply you know if you just 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 mean it’s just I indicate think of the number of real 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 validated 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
receive this you know the check is chosen sure which’s when they pay so they don’t pay anything until they in fact get the cash they do not pay bottom line Wonder trust anything up until this letter is validated the check is on the method they transfer it into their checking account and they can truly trust Wonder trust that the process 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 six billion dollars wow so plainly they know what they’re doing and that’s what you require you require experts 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 Wonderful here you’re at my YouTube channel we’re speaking about something actually essential today the employee retention credit which most of you have never heard of I certainly hadn’t become aware of it up until very recently and learned a lot about it since this is probably the most affordable expense of capital for any small business anywhere
anytime if you have employees 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 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 simply phone your bank manager and say 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’ve become yes the Ambassador and paid spokesperson for this I like this program it’s going away very 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 throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act offered companies 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everyone it makes a big distinction right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
remedy the money money payroll tax refund alright go on sorry I simply need to make certain we got that point I suggest that’s a huge difference a loan versus money money I like money money that’s what we’re talking about all right 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 real money from the internal revenue service all right so let’s discuss how it works because it seems like to me if it’s a if it’s employee retention credit that individual needed to be an employee so I’m going to make the Presumption this money is not for the owner not for individuals on the cap table not for shareholders it’s for workers right you had to have owned a business 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 qualified 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 6 quarters the program was open well walk us through the six quarters so you had quarters 2 3 and four of 2020 and you had quarters one 2 and three of 2021. all right so that’s how it’s measured you need to be on the W-2 during that duration now let’s talk my preferred part cash just how much can you get back per employee that was on a W-2 in those six quarters so the computation in 2020 to be precise Kevin is 50 of the worker’s salary to an optimum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers escalated to 70 of the worker’s income to a maximum of seven thousand per quarter how did that occur um they just changed the rules in.
2021 versus since the turmoil of the pandemic so they wanted to even get more to keep those workers on payroll 100 so if you can get 5 000 per person Max in twenty that was 50 in 2020 as much as five thousand Max and after that what takes place 21 000 Max in 2021 oh that’s how you create twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty 6 thousand dollars per staff member that is because that’s a lot of cash it is now there’s a caveat here the PPP cash would need to be decreased from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would decrease the 26 000 so what we’re seeing typically Kevin is if you took PPP money somewhere around 10 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 employees and you took PPP money you would still get a million dollar in the mail from the IRS so it’s huge certainly now the huge question is why does nobody understand about this because look when I first became aware of this when I first met Josh you understand I’ve got lots of financial investments in lots of companies I’m a significant supporter for entrepreneurship in America and make lots of many 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 due to the fact that 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 wisely to survive throughout the pandemic so when I heard about this I said nah it can’t be true but when I dug around I even called to my politician good friends Governor Senators they didn’t understand about it I imply that’s how you know that’s how misinformation is that there’s no information out there then a bunch of people told me well you can’t get it due to the fact that you took the PPP likewise not true so let’s ask Josh why does nobody understand about the employee retention credit you understand what’s intriguing you’re speaking about the banks Kevin because in the PPP loan procedure 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 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 simply process procedure that’s all um and here there was mayhem since keep in mind in the initial cares act you could not do both programs so if you had done PPP you might refrain from doing ERC in the original program and when they changed 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 made it clear to any person about how to.
do this does your CFO understand how to do this not really he or she’s never ever done it in the past do the banks do it nope the banks don’t do it the payroll companies yeah some of them are doing it as a payroll business your accounting professional no your accountant’s never ever done this prior to unless you have an account that went into this business and bottom line my company Kevin has actually been in business considering that 2009 and we have actually been working with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 companies so a great deal of our big big corporate clients have dealt with bottom line to recuperate other federal government programs we have actually done sales tax and utilize tax joblessness tax work opportunity tax credits research and development tax credits unclaimed property real estate tax all of these other federal government programs.
The staff member retention tax credit is a broad based refundable tax credit designed to motivate.
employers to keep employees on their payroll. The credit is 50% of up to $10,000 in wages paid by an.
company whose service is totally or partly suspended because of COVID-19 or whose gross invoices.
decrease by more than 50%.
1. The credit is readily available to all companies regardless of size consisting of tax exempt companies. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
businesses who take Small Business Loans.
2. To qualify, the company has to fulfill one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s organization is totally or partially suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the similar quarter in 2019. When the.
company’s gross receipts exceed 80% of a comparable 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 qualifying earnings paid up to $10,000 in overall.
It is effective for incomes paid after March 13th and prior to December 31, 2020.
The definition of certifying earnings varies by whether an employer had, on average, basically than.
100 staff members in 2019.
Business that concentrate on ERC filing support usually provide know-how and assistance to assist services browse the complex procedure of declaring the credit. They can offer numerous services, consisting of:.
How is the employee retention credit calculated? Do Owner Wages Qualify For Employee Retention Credit
Eligibility Evaluation: These business will evaluate your business’s eligibility for the ERC based on elements such as your market, profits, and operations. They can help determine if you meet the requirements for the credit and determine the maximum credit amount you can declare.
Documents and Computation: ERC filing services will help in collecting the essential paperwork, such as payroll records and financial statements, to support your claim. They will likewise assist compute the credit amount based on qualified earnings and other certifying expenditures.
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 identify possible opportunities for retroactive credits. They can assist you amend previous income tax return to claim these refunds.
Filing Help: Business focusing on ERC filings will prepare and send the needed forms and paperwork in your place. This consists of finishing Type 941 or any other required tax forms.
Compliance and Updates: ERC guidelines and assistance have progressed with time. These business stay updated with the most recent changes and guarantee that your filings adhere to the most present standards. If the IRS requests additional details or conducts an audit related to your ERC claim, they can also offer ongoing assistance.
It is very important to research study and vet any business using ERC filing support to ensure their trustworthiness and proficiency. Try to find recognized companies with experience in tax and payroll services, or consider connecting to trusted accounting companies or tax specialists who offer ERC submitting assistance.
Bear in mind that while these companies can supply valuable help, it’s always an excellent concept to have a standard understanding of the ERC requirements and procedure yourself. This will help you make informed decisions and guarantee precise filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief steps. The goal of the ERC is to encourage services to keep and pay their staff members during the pandemic, even if their operations have actually been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is available to qualified companies, consisting of for-profit organizations, tax-exempt companies, and specific governmental entities. To certify, companies should fulfill one of two criteria:.
The business operations were fully or partly suspended due to a federal government order related to COVID-19.
Business experienced a considerable decrease in gross receipts. As discussed previously, for 2021, a substantial decline is specified as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decline in gross invoices 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 employer’s share of Social Security taxes. The credit amount is equal to a percentage (up to 70%) of qualified earnings paid to workers, including particular health plan expenditures. 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, companies that received a Paycheck Security Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 permits services to claim the ERC even if they got a PPP loan. The same wages can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and improved, permitting eligible companies to declare the credit for certified earnings paid as far back as March 13, 2020. This retroactive provision provides an opportunity for services to amend prior-year income tax return and receive refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their employment tax returns, typically Type 941. If the credit exceeds the quantity of employment taxes owed, the excess can be reimbursed to the company.
It’s important to note that the ERC provisions and eligibility criteria have evolved gradually. The best strategy is to seek advice from a tax expert or go to the official internal revenue service website for the most updated and in-depth details regarding the ERC, consisting of any recent legislative modifications or updates.
To receive the ERC, a company should satisfy one of the following criteria:.
The business operations were totally 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 substantial decrease 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% decline in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross receipts compared to the right away preceding quarter.
The ERC is offered to businesses of all sizes, consisting of tax-exempt organizations, however there are some exceptions. For example, government entities and companies that received a PPP loan might have restrictions on claiming the credit.
The process for declaring the ERC includes completing the essential kinds and consisting of the credit on your work tax return (usually Kind 941). The exact time it requires to process the credit can differ based upon several factors, including the intricacy of your organization and the work of the internal revenue service. It’s advised to consult with a tax professional for assistance particular to your scenario.
There are numerous business that can help with the procedure of claiming the ERC. These include accounting firms, tax advisory services, and payroll provider. Some widely known business that provide help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research and get in touch with these companies directly to inquire about their fees and services.
Please note that the details provided here is based on general knowledge and might not reflect the most current updates or changes to the ERC. It is very important to seek advice from a tax expert or visit the main IRS site for the most accurate and current 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 salaries paid to all workers whether they actually worked or not. To put it simply, even if the.
staff members worked full-time and earned money for full time work, the company still gets the credit.
Greater than 100. If the employer had more than 100 employees typically in 2019, then the credit is.
allowed just for earnings paid to workers who did not work throughout the calendar quarter.
In both cases, “salaries” includes not just cash payments however also a part of the cost of company.
offered healthcare. Do Owner Wages Qualify For Employee Retention Credit
Employers can be instantly reimbursed for the credit by reducing the amount of payroll taxes they.