Lets talk first about Schedule C Employee Retention Credit :
Our team here what do these men doing everybody in this space is assisting teach people about ERC and uh constantly offer a lovely breakfast and have people truly learn about the program we need to head to the room where we are able to display some of the checks that we are getting for companies and I want to see that what is this this is uh numerous millions of dollars actually 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 suggest you know if you just begin to look at a few of these here I imply this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s simply I mean consider the number of real customers 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 internal revenue service heading to the consumer so that’s how you’re able to track it you understand when you
get this you understand the check is gone for sure which’s when they pay so they do not pay anything till they really get the money they don’t pay bottom line Wonder trust anything up until this letter is confirmed the check is on the way they deposit it into their checking account and they can genuinely trust Wonder trust that the process has been ended up and how many you believe you’ve processed given that you started this we’re about 35 000 of these for
about 6 billion dollars wow so plainly they know what they’re doing which’s what you require you require professionals 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 Fantastic here you’re at my YouTube channel we’re talking about something actually crucial today the staff member retention credit which the majority of you have never become aware of I definitely hadn’t become aware of it till extremely just recently and learned a lot about it due to the fact that this is most likely the lowest cost of capital for any small business anywhere
anytime if you have staff members in between five and five hundred so I’ve got the professional with me this is Josh Fox he’s the founder and CEO of bottom line Concepts 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 supervisor and state 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 ended up being yes the Ambassador and paid representative for this I love this program it’s disappearing very soon you got to find out all about it let’s talk worker retention credit Josh Fox what is an ERC let’s simply start there so throughout the Trump Administration when President Trump was enacted they developed the cares Act and the cares act offered businesses three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everybody it makes a huge difference right there 2 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 simply have to make certain we got that point I indicate that’s a huge distinction a loan versus cash money I like cash money that’s what we’re speaking 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 money from the IRS all right so let’s speak about how it works due to the fact that it sounds like to me if it’s a if it’s worker retention credit that individual had to be a worker so I’m going to make the Presumption this cash is not for the owner not for people on the cap table not for shareholders it’s for staff members right you needed to have actually owned a service but it’s based on you having W-2 employees in America not 10.99. As long as you had W-2 employees 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 appropriate so there were 6 quarters the program was open well walk us through the six quarters so you had quarters two 3 and four of 2020 and you had quarters one 2 and 3 of 2021. okay so that’s how it’s determined you need to be on the W-2 during that period now let’s talk my favorite part cash how much can you get back per worker that was on a W-2 in those 6 quarters so the computation in 2020 to be precise Kevin is 50 of the staff member’s wage to an optimum of 5 thousand dollars per staff member for the year of 2020 and in 2021 the numbers escalated to 70 of the employee’s wage to a maximum of seven thousand per quarter how did that happen 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 approximately 5 thousand Max and after that what happens 21 000 Max in 2021 oh that’s how you come up with twenty 6 thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty 6 thousand dollars per employee that is because that’s a great deal of money it is now there’s a caveat here the PPP cash would have to be reduced from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would minimize the 26 000 so what we’re seeing typically Kevin is if you took PPP money somewhere around ten 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 IRS so it’s substantial undoubtedly now the big question is why does no one know about this since appearance when I first became aware of this when I initially met Josh you understand I have actually got lots of investments in great deals of business I’m a major advocate for entrepreneurship in America and make lots of numerous investments in business owners of which many suffered through the pandemic when I initially found out about this I called BS I don’t think it since I use the PPP we went through the money center Banks to get it it was very easy to do we had our CEOs call the banks they got their loans and that were well been worthy of and we used them sensibly to survive during the pandemic so when I became aware of this I stated nah it can’t be true however when I dug around I even contacted us to my politician buddies Guv Senators they didn’t understand about it I suggest that’s how you understand that’s how misinformation 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 true so let’s ask Josh why does no one understand about the employee retention credit you understand what’s interesting you’re talking about the banks Kevin due to the fact that in the PPP loan process the federal government made it really 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 just process procedure that’s all um and here there was mayhem since keep in mind in the initial cares act you might refrain from doing both programs so if you had done PPP you could refrain from doing ERC in the initial 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 anyone about how to.
do this does your CFO know how to do this not really she or he’s never ever done it before do the banks do it nope the banks do not do it the payroll business 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 service and bottom line my firm Kevin has stayed in business considering that 2009 and we have actually been working with the federal government and the state federal government to recuperate money for Fortune 500 Fortune 1000 business so a great deal of our huge big corporate customers have actually dealt with bottom line to recuperate other federal government programs we have actually done sales tax and use tax joblessness tax work opportunity tax credits research and development tax credits unclaimed home property tax all of these other federal government programs.
The staff member 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 up to $10,000 in earnings paid by an.
company whose business is fully or partially suspended because of COVID-19 or whose gross invoices.
decrease by more than 50%.
1. The credit is offered to all companies no matter size consisting of tax exempt companies. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) little.
businesses who take Small company Loans.
2. To certify, the employer needs to satisfy one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s company is fully or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross invoices are listed below 50% of the comparable quarter in 2019. As soon as the.
employer’s gross receipts go above 80% of an equivalent quarter in 2019 they no longer qualify.
after the end of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the certifying incomes paid up to $10,000 in total.
It works for salaries paid after March 13th and prior to December 31, 2020.
The definition of certifying incomes varies by whether an employer had, usually, basically than.
100 staff members in 2019.
Companies that specialize in ERC filing help normally offer expertise and assistance to help companies browse the complex process of declaring the credit. They can provide different services, consisting of:.
How is the employee retention credit calculated? Schedule C Employee Retention Credit
Eligibility Evaluation: These business will examine your business’s eligibility for the ERC based upon aspects such as your industry, profits, and operations. They can help determine if you satisfy the requirements for the credit and recognize the maximum credit quantity you can claim.
Paperwork and Calculation: ERC filing services will help in gathering the needed documentation, such as payroll records and monetary declarations, to support your claim. They will also assist calculate the credit quantity based upon qualified salaries and other certifying costs.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for previous quarters, these companies can examine your previous payroll records and financials to identify potential opportunities for retroactive credits. They can assist you change previous tax returns to claim these refunds.
Filing Assistance: Business specializing in ERC filings will prepare and submit the essential forms and paperwork in your place. This consists of completing Type 941 or any other necessary tax return.
Compliance and Updates: ERC policies and assistance have evolved over time. These business stay updated with the current changes and ensure that your filings abide by the most existing guidelines. If the Internal revenue service demands additional info or carries out an audit related to your ERC claim, they can also provide continuous assistance.
It’s important to research study and veterinarian any company offering ERC filing help to ensure their trustworthiness and expertise. Try to find established companies with experience in tax and payroll services, or think about reaching out to relied on accounting companies or tax professionals who provide ERC filing assistance.
Bear in mind that while these companies can provide valuable help, it’s always a great concept to have a fundamental understanding of the ERC requirements and procedure yourself. This will help you make notified choices and ensure accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief steps. The objective of the ERC is to motivate businesses to retain and pay their workers throughout the pandemic, even if their operations have actually been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to eligible employers, including for-profit organizations, tax-exempt organizations, and certain governmental entities. To certify, employers need to meet one of two requirements:.
Business operations were completely or partly suspended due to a federal government order related to COVID-19.
The business experienced a significant decrease in gross receipts. As pointed out previously, for 2021, a substantial decline is defined as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decrease 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 instantly 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 percentage (up to 70%) of certified wages paid to staff members, including specific health plan expenses. 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 a Paycheck Protection Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 allows companies to declare the ERC even if they received a PPP loan. The exact same salaries can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and improved, allowing qualified companies to declare the credit for certified wages paid as far back as March 13, 2020. This retroactive provision supplies a chance for companies to amend prior-year tax returns and get refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their work tax returns, typically Form 941. The excess can be refunded to the company if the credit goes beyond the amount of employment taxes owed.
It’s important to keep in mind that the ERC arrangements and eligibility requirements have progressed gradually. The best course of action is to talk to a tax professional or check out the official IRS site for the most in-depth and current info regarding the ERC, consisting of any current legal changes or updates.
To qualify for the ERC, a business must meet among the following requirements:.
Business operations were fully or partially suspended due to a federal government order related to COVID-19.
Business experienced a significant decrease in gross invoices. For 2021, a considerable decline is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decrease is specified as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
The ERC is readily available to organizations of all sizes, including tax-exempt organizations, however there are some exceptions. For example, government entities and services that got a PPP loan might have constraints on declaring the credit.
The process for claiming the ERC involves finishing the necessary types and consisting of the credit on your employment tax return (typically Kind 941). The exact time it takes to process the credit can vary based upon numerous factors, consisting of the complexity of your business and the work of the internal revenue service. It’s advised to consult with a tax professional for guidance specific to your circumstance.
There are several business that can assist with the procedure of claiming the ERC. These include accounting companies, tax advisory services, and payroll service providers. Some well-known companies that use help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research study and get in touch with these companies directly to ask about their services and costs.
Please keep in mind that the information supplied here is based upon basic understanding and may not reflect the most recent updates or changes to the ERC. It’s important to consult with a tax professional or check out the main IRS website for the most precise and updated details relating to eligibility, claiming procedures, and readily available support.
Less than 100. The credit is based if the company had 100 or fewer employees on average in 2019.
on wages paid to all employees whether they in fact worked or not. In other words, even if the.
staff members worked full time and earned money for full-time work, the employer still gets the credit.
Greater than 100. If the employer had more than 100 workers typically in 2019, then the credit is.
permitted just for incomes paid to employees who did not work during the calendar quarter.
In both cases, “wages” includes not simply money payments but likewise a portion of the expense of employer.
provided healthcare. Schedule C Employee Retention Credit
Employers can be instantly repaid for the credit by lowering the amount of payroll taxes they.