Lets talk first about Employee Retention Credit Owners Wages :
Our group here what do these guys doing everyone in this room is helping teach people about ERC and uh always offer a lovely breakfast and have individuals truly learn about the program we must head to the space 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 numerous millions of dollars literally Kevin hundreds of countless dollars so these are replicate copies of the letters that go to customers confirming that the check is on the way I suggest you know if you just begin to 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 imply it’s simply I indicate consider how many actual customers 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 IRS heading to the customer so that’s how you have the ability to track it you understand when you
get this you know the check is opted for sure and that’s when they pay so they don’t pay anything till they in fact receive the cash they don’t pay bottom line Wonder trust anything till this letter is verified the check is on the method they deposit it into their bank account and they can genuinely rely on Wonder trust that the process has been finished and the number of you believe you’ve processed considering that you began this we have to do with 35 000 of these for
about 6 billion dollars wow so clearly they know what they’re doing and that’s what you require you require specialists 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 discussing something truly essential today the worker retention credit which the majority of you have actually never heard of I certainly hadn’t heard of it till really just recently and learned a lot about it due to the fact that this is most likely the lowest expense of capital for any small business anywhere
anytime if you have staff members in between 5 and five hundred so I have actually got the specialist 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 challenging this isn’t like PPP we just call up your bank manager and say give 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 ended up being yes the Ambassador and paid spokesperson for this I enjoy this program it’s going away soon you got to learn everything about it let’s talk employee 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 three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everyone 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.
correct the money cash payroll tax refund all right go on sorry I simply need to ensure we got that point I indicate that’s a huge distinction a loan versus cash cash I like cash cash that’s what we’re discussing alright 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 lovely difficult check in the mail where you get real cash from the IRS all right so let’s discuss how it works due to the fact that it sounds like to me if it’s a if it’s worker retention credit that person had to be a staff member 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 had to have actually owned a business but it’s based upon you having W-2 staff members 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 qualified 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 proper so there were six 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 period now let’s talk my favorite part cash just how much can you return 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 employee’s wage to a maximum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the worker’s salary to a maximum of seven thousand per quarter how did that happen um they just altered the rules in.
2021 versus because 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 up to 5 thousand Max and after that what occurs 21 000 Max in 2021 oh that’s how you come up with twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty 6 thousand dollars per worker that is because that’s a great deal of cash it is now there’s a caution here the PPP cash would need to be reduced from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would minimize 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 state hypothetically you owned a restaurant 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 IRS so it’s big obviously now the big concern is why does nobody understand about this because appearance when I first became aware of this when I initially satisfied Josh you understand I’ve got lots of financial investments in great deals of companies I’m a major 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 heard about this I called BS I don’t think it since I utilize 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 used them sensibly to survive throughout the pandemic so when I heard about this I stated nah it can’t hold true however when I dug around I even called to my political leader friends Guv Senators they didn’t know about it I suggest that’s how you know that’s how misinformation is that there’s no info out there then a bunch of people told me well you can’t get it since you took the PPP likewise not real so let’s ask Josh why does nobody learn about the employee retention credit you understand what’s fascinating you’re speaking about the banks Kevin due to the fact that 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 huge 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 simply process procedure that’s all um and here there was mayhem due to the fact that remember in the original cares act you might refrain from doing both programs so if you had done PPP you might not do ERC in the original program and when they changed 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 any person about how to.
do this does your CFO understand how to do this not really he or she’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 company your accountant no your accountant’s never done this before unless you have an account that entered into this company and bottom line my firm Kevin has stayed in business because 2009 and we’ve been dealing with the federal government and the state government to recover money for Fortune 500 Fortune 1000 business so a great deal of our big big business clients have actually dealt with bottom line to recuperate other government programs we’ve done sales tax and use tax joblessness tax work chance tax credits research and development tax credits unclaimed home real estate tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit created to encourage.
employers to keep employees on their payroll. The credit is 50% of as much as $10,000 in incomes paid by an.
Due to the fact that of COVID-19 or whose gross invoices, company whose organization is fully or partly suspended.
decline by more than 50%.
1. The credit is available to all employers regardless of 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 employer needs to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s business is fully 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. As soon as the.
company’s gross invoices go above 80% of a comparable quarter in 2019 they no longer qualify.
after the end of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the certifying earnings paid up to $10,000 in overall.
It works for salaries paid after March 13th and prior to December 31, 2020.
The meaning of qualifying wages varies by whether a company had, usually, basically than.
100 employees in 2019.
Companies that concentrate on ERC filing support generally provide know-how and assistance to assist organizations browse the intricate process of declaring the credit. They can provide various services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Owners Wages
Eligibility Assessment: These business will assess your business’s eligibility for the ERC based upon factors such as your market, income, and operations. They can assist figure out if you meet the requirements for the credit and recognize the maximum credit quantity you can declare.
Documents and Computation: ERC filing services will help in collecting the required documentation, such as payroll records and monetary statements, to support your claim. They will likewise help determine the credit amount based on eligible wages and other certifying costs.
Retroactive Claim Review: If you are qualified to declare the ERC for previous quarters, these business can evaluate your previous payroll records and financials to identify potential opportunities for retroactive credits. They can help you change prior tax returns to claim these refunds.
Filing Support: Companies focusing on ERC filings will prepare and send the essential forms and documentation on your behalf. This includes finishing Type 941 or any other necessary tax forms.
Compliance and Updates: ERC policies and guidance have developed in time. These companies remain updated with the current modifications and ensure that your filings abide by the most existing standards. They can likewise offer continuous support if the IRS requests additional details or conducts an audit related to your ERC claim.
It’s important to research study and vet any business offering ERC filing assistance to ensure their credibility and know-how. Search for established firms with experience in tax and payroll services, or think about reaching out to relied on accounting firms or tax specialists who offer ERC filing support.
Bear in mind that while these companies can provide valuable support, it’s constantly a great concept to have a fundamental understanding of the ERC requirements and procedure yourself. This will help you make notified decisions and ensure precise filings.
The Worker 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 services to retain 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 qualified employers, including for-profit businesses, tax-exempt companies, and specific governmental entities. To qualify, employers need to fulfill one of two requirements:.
The business operations were fully or partially suspended due to a federal government order related to COVID-19.
Business experienced a substantial decrease in gross invoices. As discussed previously, for 2021, a substantial decline is specified as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a substantial decline is specified as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decline in gross receipts 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 quantity is equal to a portion (as much as 70%) of certified incomes paid to staff members, consisting of specific health insurance costs. 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 received an Income Protection Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 allows organizations to claim the ERC even if they got a PPP loan. Nevertheless, the exact same incomes 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 eligible employers to declare the credit for certified incomes paid as far back as March 13, 2020. This retroactive provision provides an opportunity for businesses to amend prior-year income tax return and get refunds.
Claiming the Credit: Companies can declare the ERC by reporting it on their employment tax returns, generally Kind 941. The excess can be reimbursed to the company if the credit goes beyond the amount of employment taxes owed.
It is essential to note that the ERC arrangements and eligibility requirements have actually evolved in time. The very best strategy is to speak with a tax professional or visit the main internal revenue service site for the most detailed and up-to-date details relating to the ERC, consisting of any current legislative modifications or updates.
To receive the ERC, a service should satisfy among the following requirements:.
The business operations were totally or partly suspended due to a federal government order related to COVID-19.
The business experienced a considerable decline in gross receipts. For 2021, a significant decline is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decrease in gross receipts compared to the right away preceding quarter.
The ERC is readily available to services of all sizes, consisting of tax-exempt organizations, but there are some exceptions. Federal government entities and businesses that got a PPP loan might have constraints on claiming the credit.
The process for claiming the ERC includes finishing the essential kinds and consisting of the credit on your work income tax return (typically Kind 941). The exact time it requires to process the credit can vary based upon several elements, consisting of the complexity of your organization and the workload of the internal revenue service. It’s suggested to seek advice from a tax expert for assistance specific to your circumstance.
There are numerous companies that can aid with the process of declaring the ERC. These include accounting companies, tax advisory services, and payroll service providers. Some widely known business that offer support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research study and contact these business directly to inquire about their fees and services.
Please keep in mind that the information supplied here is based on general knowledge and might not reflect the most current updates or modifications to the ERC. It’s important to talk to a tax professional or check out the official IRS website for the most accurate and current info regarding eligibility, claiming procedures, and readily available support.
Less than 100. If the company had 100 or fewer workers on average in 2019, then the credit is based.
on salaries paid to all staff members whether they really worked or not. To put it simply, even if the.
workers worked full time and made money for full time work, the company still gets the credit.
Greater than 100. The credit is if the employer had more than 100 employees on average in 2019.
allowed only for earnings paid to employees who did not work throughout the calendar quarter.
In both cases, “wages” includes not simply money payments however also a portion of the expense of company.
offered healthcare. Employee Retention Credit Owners Wages
Employers can be instantly compensated for the credit by reducing the amount of payroll taxes they.