Lets talk first about Owner Wages For Employee Retention Credit :
Our group here what do these guys doing everybody in this space is assisting teach people about ERC and uh always provide a lovely breakfast and have people really learn more about the program we must head to the space 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 numerous millions of dollars literally Kevin hundreds of millions of dollars so these are duplicate copies of the letters that go to clients verifying that the check is on the method I mean you know if you just 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 imply it’s just I indicate think of how many actual clients that went through the program yeah this is the very end this is the party at the end when the check is verified the numbers are verified and the check is on the mail in the mail from the IRS heading to the consumer so that’s how you’re able to track it you know when you
receive this you know the check is gone for sure and that’s when they pay so they do not pay anything until they in fact receive the cash they don’t pay bottom line Wonder trust anything until this letter is confirmed the check is on the way they transfer it into their bank account and they can genuinely trust Wonder trust that the procedure has been finished and how many you believe you’ve processed because you started this we have to do with 35 000 of these for
about 6 billion dollars wow so clearly they understand what they’re doing which’s what you need you need specialists 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 Wonderful here you’re at my YouTube channel we’re discussing something really important today the staff member retention credit which most of you have never heard of I definitely had not become aware of it up until very just recently and learned a lot about it due to the fact that this is probably the lowest cost of capital for any small company anywhere
anytime if you have employees in between 5 and five hundred so I have actually got the expert with me this is Josh Fox he’s the creator and CEO of bottom line Concepts they’re the biggest processor of these ERC credits this is a 170 page program so it’s hard this isn’t like PPP we simply phone your bank manager and state give me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to tell all of us 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 going away very soon you got to learn everything about it let’s talk worker retention credit Josh Fox what is an ERC let’s just start there so throughout the Trump Administration when President Trump was enacted they developed the cares Act and the cares act used companies 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 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 just have to make certain we got that point I indicate that’s a big difference a loan versus cash cash I like money cash that’s what we’re talking about 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 initial cares Act is the ERC and yes Kevin it is a lovely difficult check in the mail where you get real cash from the internal revenue service all right so let’s talk about how it works because it sounds like to me if it’s a if it’s employee 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 investors it’s for workers right you had to have owned an organization however it’s based on you having W-2 workers 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 need to be on payroll for the very first 6 months of 2021 on the W-2 right so there were 6 quarters the program was open well stroll us through the six quarters so you had quarters two three and four of 2020 and you had quarters one 2 and three of 2021. all right so that’s how it’s determined you have to be on the W-2 throughout that duration now let’s talk my preferred part money how much can you return per employee that was on a W-2 in those six quarters so the estimation in 2020 to be precise Kevin is 50 of the worker’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 salary to a maximum of seven thousand per quarter how did that take place um they just changed the rules in.
2021 versus since the chaos 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 5 thousand Max and then 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 5 thousand in twenty twenty that’s twenty six thousand dollars per staff member that is since that’s a lot of money it is now there’s a caution here the PPP cash would need to be lowered 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 usually Kevin is if you took PPP money somewhere around ten thousand dollars an individual so let’s say 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 internal revenue service so it’s big obviously now the big question is why does no one understand about this due to the fact that look when I first became aware of this when I initially satisfied Josh you understand I have actually got great deals of investments in lots of business I’m a major supporter for entrepreneurship in America and make lots of lots of financial investments in business owners of which lots of suffered through the pandemic when I first heard about this I called BS I do not think it because I utilize the PPP we went through the cash 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 should have and we used them carefully to stay alive 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 called to my politician friends Guv Senators they didn’t know about it I mean that’s how you understand that’s how false information is that there’s no info out there then a bunch 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 no one understand about the worker retention credit you understand what’s interesting you’re talking about the banks Kevin since in the PPP loan process the federal government made it very 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 procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply process process that’s all um and here there was chaos since keep in mind in the initial cares act you could refrain from doing both programs so if you had actually done PPP you might refrain from doing ERC in the initial program and when they altered the law in 2021 the banks were not doing ERC since 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 truly she or he’s never 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 company your accounting professional no your accountant’s never done this prior to unless you have an account that entered into this organization and bottom line my firm Kevin has stayed in business since 2009 and we’ve been working with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 business so a lot of our big huge corporate customers have actually dealt with bottom line to recover other government programs we have actually done sales tax and utilize tax unemployment tax work chance tax credits research and development tax credits unclaimed home property tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit designed to encourage.
companies to keep employees on their payroll. The credit is 50% of approximately $10,000 in salaries paid by an.
employer whose company is totally or partially suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
1. The credit is readily available to all companies no matter size including tax exempt organizations. There are.
just 2 exceptions: (1) state and city governments and their instrumentalities and (2) little.
organizations who take Small company Loans.
2. To qualify, the employer needs to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s organization is fully or partially suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are below 50% of the comparable quarter in 2019. Once the.
employer’s gross invoices go above 80% of a comparable quarter in 2019 they no longer qualify.
after completion of that quarter.
Computation of the Credit.
The quantity of the credit is 50% of the certifying wages paid up to $10,000 in overall.
It is effective for earnings paid after March 13th and before December 31, 2020.
The definition of certifying incomes differs by whether an employer had, usually, basically than.
100 employees in 2019.
Business that specialize in ERC filing support typically supply knowledge and assistance to assist businesses navigate the intricate procedure of claiming the credit. They can provide various services, consisting of:.
How is the employee retention credit calculated? Owner Wages For Employee Retention Credit
Eligibility Evaluation: These companies will examine your service’s eligibility for the ERC based on factors such as your market, earnings, and operations. They can assist identify if you satisfy the requirements for the credit and determine the maximum credit quantity you can declare.
Documentation and Computation: ERC filing services will help in gathering the necessary paperwork, such as payroll records and financial declarations, to support your claim. They will also assist compute the credit quantity based upon eligible earnings and other qualifying expenses.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for prior quarters, these business can examine your past payroll records and financials to recognize potential chances for retroactive credits. They can help you amend prior income tax return to claim these refunds.
Filing Support: Companies concentrating on ERC filings will prepare and submit the needed forms and documents on your behalf. This includes completing Form 941 or any other necessary tax forms.
Compliance and Updates: ERC guidelines and assistance have evolved over time. These business remain upgraded with the latest modifications and guarantee that your filings adhere to the most existing guidelines. They can likewise supply continuous support if the IRS requests extra details or performs an audit related to your ERC claim.
It is necessary to research and vet any business offering ERC filing help to guarantee their credibility and proficiency. Try to find recognized companies with experience in tax and payroll services, or think about connecting to relied on accounting firms or tax professionals who use ERC submitting assistance.
Keep in mind that while these companies can supply valuable assistance, it’s always a great concept to have a standard understanding of the ERC requirements and process yourself. This will help you make notified decisions and make sure accurate filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief steps. The goal of the ERC is to encourage companies to keep and pay their workers throughout the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to eligible companies, including for-profit organizations, tax-exempt companies, and particular governmental entities. To qualify, companies should satisfy one of two requirements:.
The business operations were totally or partially suspended due to a government order related to COVID-19.
The business experienced a substantial decrease in gross receipts. As pointed out previously, for 2021, a significant decline is specified as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decline in gross invoices compared to the instantly preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit quantity amounts to a portion (approximately 70%) of certified salaries paid to workers, including certain health plan expenses. The optimum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, businesses that got an Income Defense Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 allows organizations to claim the ERC even if they received a PPP loan. However, the exact same wages can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively broadened and boosted, enabling qualified companies to claim the credit for qualified incomes paid as far back as March 13, 2020. This retroactive provision provides a chance for companies to modify prior-year income tax return and receive refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their employment income tax return, normally Kind 941. If the credit exceeds the quantity of employment taxes owed, the excess can be reimbursed to the company.
It’s important to keep in mind that the ERC provisions and eligibility requirements have developed with time. The best strategy is to consult with a tax expert or check out the main IRS website for the most up-to-date and comprehensive information regarding the ERC, consisting of any current legal modifications or updates.
To qualify for the ERC, a business needs to satisfy among the following requirements:.
The business operations were totally or partially suspended due to a federal government order related to COVID-19.
Business experienced a significant decline in gross receipts. For 2021, a substantial decrease is defined as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decline 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 available to businesses of all sizes, consisting of tax-exempt organizations, but there are some exceptions. For instance, federal government entities and organizations that got a PPP loan may have limitations on declaring the credit.
The procedure for declaring the ERC involves completing the essential forms and consisting of the credit on your work tax return (typically Form 941). The exact time it takes to process the credit can vary based on several aspects, including the intricacy of your business and the work of the internal revenue service. It’s recommended to consult with a tax professional for assistance particular to your situation.
There are numerous companies that can assist with the process of declaring the ERC. Some popular companies that provide assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the details provided here is based upon basic knowledge and may not reflect the most current updates or changes to the ERC. It is very important to seek advice from a tax expert or check out the official IRS website for the most current and precise details regarding eligibility, declaring procedures, and available help.
Less than 100. If the employer had 100 or fewer staff members typically in 2019, then the credit is based.
on incomes paid to all employees whether they really worked or not. Simply put, even if the.
workers worked full-time and made money for full time work, the employer still gets the credit.
Greater than 100. The credit is if the employer had more than 100 employees on average in 2019.
permitted only for earnings paid to staff members who did not work throughout the calendar quarter.
In both cases, “salaries” consists of not simply cash payments however also a portion of the cost of employer.
offered healthcare. Owner Wages For Employee Retention Credit
Companies can be immediately compensated for the credit by minimizing the quantity of payroll taxes they.