Lets talk first about Do Self Employed Qualify For Employee Retention Credit :
Our group here what do these guys doing everyone in this space is helping teach individuals about ERC and uh constantly offer a beautiful breakfast and have individuals truly find out about the program we must head to the room where we have the ability to display a few of the checks that we are getting for companies and I want to see that what is this this is uh hundreds of millions of dollars literally Kevin numerous millions of dollars so these are replicate copies of the letters that go to customers validating that the check is on the method I suggest you know if you simply begin to look at some of these here I indicate this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I imply it’s simply I indicate think about the number of 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 confirmed and the check is on the mail in the mail from the internal revenue service heading to the client so that’s how you have the ability to track it you understand when you
get this you understand the check is opted for sure which’s when they pay so they don’t pay anything up until they really receive 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 bank account and they can truly trust Wonder trust that the process has actually been completed and how many you think you have actually processed considering that you started this we have to do with 35 000 of these for
about six billion dollars wow so plainly they know what they’re doing and that’s what you need you need 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 Terrific here you’re at my YouTube channel we’re speaking about something really important today the staff member retention credit which most of you have never heard of I certainly hadn’t heard of it up until very recently and learned a lot about it since this is probably the lowest cost of capital for any small company anywhere
anytime if you have employees between 5 and five hundred so I’ve got the professional with me this is Josh Fox he’s the founder and CEO of bottom line Ideas they’re the largest processor of these ERC credits this is a 170 page program so it’s difficult this isn’t like PPP we just call your bank supervisor and state 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 have actually become yes the Ambassador and paid spokesperson for this I enjoy this program it’s disappearing 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 provided services 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody it makes a big difference right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the cash cash payroll tax refund fine go on sorry I just have to make sure we got that point I mean that’s a huge distinction a loan versus cash money I like money cash 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 original cares Act is the ERC and yes Kevin it is a beautiful difficult check in the mail where you get actual cash from the IRS all right so let’s talk about how it works since it sounds like to me if it’s a if it’s worker retention credit that individual had to be an employee 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 staff members right you had to have actually owned a business however it’s based on you having W-2 workers 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 first six 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. all right so that’s how it’s determined you have to be on the W-2 throughout that period now let’s talk my favorite part cash just how much can you get back per worker that was on a W-2 in those six quarters so the computation in 2020 to be precise Kevin is 50 of the staff member’s income to an optimum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers escalated to 70 of the employee’s salary to a maximum of 7 thousand per quarter how did that occur um they just changed the rules in.
2021 versus since the chaos 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 then what occurs 21 000 Max in 2021 oh that’s how you create twenty 6 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 lot of cash it is now there’s a caveat 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 reduce the 26 000 so what we’re seeing on average Kevin is if you took PPP cash somewhere around 10 thousand dollars an individual so let’s state hypothetically you owned a dining establishment in New York City where I’m from and you had a hundred employees and you took PPP cash you would still get a million dollar in the mail from the IRS so it’s substantial clearly now the huge question is why does no one learn about this due to the fact that appearance when I first became aware of this when I first fulfilled Josh you understand I’ve got great deals of investments in great deals of companies I’m a major supporter for entrepreneurship in America and make numerous many financial investments in business owners of which many suffered through the pandemic when I initially heard about this I called BS I don’t 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 which were well deserved and we utilized them carefully to stay alive during the pandemic so when I heard about this I said nah it can’t be true however when I dug around I even contacted us to my political leader friends Governor Senators they didn’t know about it I imply that’s how you know that’s how false information is that there’s no information out there then a lot 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 nobody know about the employee retention credit you know what’s fascinating you’re discussing the banks Kevin due to the fact that 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 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 process procedure that’s all um and here there was mayhem because keep in mind in the original cares act you might not do both programs so if you had done PPP you might refrain from doing 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 ever made it clear to any person about how to.
do this does your CFO understand how to do this not actually she or he’s never ever done it before do the banks do it nope the banks do not do it the payroll companies yeah some of them are doing it as a payroll company your accountant no your accountant’s never done this prior to unless you have an account that went into this organization and bottom line my company Kevin has actually stayed in business considering that 2009 and we have actually been dealing with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 business so a lot of our big huge business clients have actually dealt with bottom line to recover other government programs we have actually done sales tax and use tax joblessness tax work opportunity tax credits research and development tax credits unclaimed property property tax all of these other government programs.
The employee 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 salaries paid by an.
Because of COVID-19 or whose gross receipts, company whose service is completely or partially suspended.
decrease by more than 50%.
1. The credit is readily available to all employers regardless of size consisting of tax exempt companies. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
services who take Small company Loans.
2. To qualify, the employer has to meet one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s business is completely or partly suspended by government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross invoices are listed below 50% of the equivalent 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.
Estimation of the Credit.
The amount of the credit is 50% of the certifying wages paid up to $10,000 in total.
It is effective for salaries paid after March 13th and prior to December 31, 2020.
The definition of certifying incomes varies by whether an employer had, on average, more or less than.
100 staff members in 2019.
Companies that specialize in ERC filing help typically offer know-how and assistance to assist services navigate the complicated procedure of claiming the credit. They can offer numerous services, including:.
How is the employee retention credit calculated? Do Self Employed Qualify For Employee Retention Credit
Eligibility Assessment: These business will examine your business’s eligibility for the ERC based on factors such as your market, revenue, and operations. If you fulfill the requirements for the credit and recognize the maximum credit quantity you can claim, they can assist figure out.
Documentation and Calculation: ERC filing services will assist in gathering the needed paperwork, such as payroll records and monetary declarations, to support your claim. They will likewise help compute the credit amount based upon qualified wages and other qualifying expenses.
Retroactive Claim Review: If you are qualified to claim the ERC for previous quarters, these companies can review your past payroll records and financials to identify potential opportunities for retroactive credits. They can assist you change prior tax returns to declare these refunds.
Filing Help: Companies specializing in ERC filings will prepare and submit the necessary kinds and documentation in your place. This includes finishing Form 941 or any other required tax return.
Compliance and Updates: ERC policies and guidance have developed with time. These companies stay upgraded with the latest changes and ensure that your filings abide by the most existing standards. They can also supply continuous assistance if the internal revenue service requests additional info or performs an audit related to your ERC claim.
It is essential to research study and veterinarian any company using ERC filing assistance to ensure their trustworthiness and expertise. Look for established firms with experience in tax and payroll services, or think about reaching out to trusted accounting companies or tax specialists who use ERC submitting assistance.
Keep in mind that while these companies can supply valuable assistance, it’s always an excellent idea to have a fundamental understanding of the ERC requirements and procedure yourself. This will help you make notified choices and ensure precise filings.
The Employee 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 encourage businesses to keep and pay their employees throughout the pandemic, even if their operations have actually been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is available to eligible companies, including for-profit services, tax-exempt companies, and certain governmental entities. To certify, employers need to fulfill one of two criteria:.
The business operations were completely or partially suspended due to a government order related to COVID-19.
Business experienced a substantial decline in gross receipts. As mentioned earlier, for 2021, a considerable decrease is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a significant decline 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 right away preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit amount amounts to a portion (as much as 70%) of certified wages paid to workers, consisting of specific health insurance 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, businesses that received a Paycheck Defense Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 enables services to claim the ERC even if they received a PPP loan. The very same salaries can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively expanded and boosted, permitting eligible employers to claim the credit for certified earnings paid as far back as March 13, 2020. This retroactive provision offers a chance for companies to modify prior-year income tax return and receive refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their work income tax return, typically Kind 941. The excess can be reimbursed to the company if the credit exceeds the amount of employment taxes owed.
It is essential to keep in mind that the ERC arrangements and eligibility criteria have progressed in time. The best strategy is to seek advice from a tax expert or go to the official internal revenue service website for the most current and detailed information relating to the ERC, consisting of any recent legal modifications or updates.
To get approved for the ERC, a business should fulfill one of the following criteria:.
Business operations were completely or partially suspended due to a government order related to COVID-19.
The business experienced a significant decline in gross invoices. For 2021, a substantial decrease is defined as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a substantial decrease is specified as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
The ERC is readily available to organizations of all sizes, including tax-exempt organizations, but there are some exceptions. Government entities and organizations that received a PPP loan may have limitations on declaring the credit.
The procedure for declaring the ERC includes completing the necessary types and including the credit on your work tax return (typically Kind 941). The exact time it requires to process the credit can differ based on several factors, consisting of the intricacy of your organization and the workload of the internal revenue service. It’s suggested to talk to a tax professional for guidance specific to your scenario.
There are a number of business that can help with the process of claiming the ERC. These include accounting companies, tax advisory services, and payroll provider. Some well-known companies that provide help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research and contact these business straight to ask about their charges and services.
Please note that the details provided here is based on general knowledge and might not show the most current updates or changes to the ERC. It is necessary to seek advice from a tax expert or visit the main internal revenue service site for the most up-to-date and accurate info concerning eligibility, declaring procedures, and offered assistance.
Less than 100. The credit is based if the employer had 100 or fewer employees on average in 2019.
on earnings paid to all staff members whether they really worked or not. In other words, 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 usually in 2019, then the credit is.
allowed just for earnings paid to staff members who did not work during the calendar quarter.
In both cases, “incomes” includes not simply money payments but likewise a part of the cost of company.
supplied healthcare. Do Self Employed Qualify For Employee Retention Credit
Companies can be right away repaid for the credit by decreasing the quantity of payroll taxes they.