Lets talk first about Are Owner Wages Eligible For Employee Retention Credit :
Our team here what do these guys doing everybody in this room is assisting teach people about ERC and uh constantly offer a beautiful breakfast and have individuals really learn about the program we need to head to the space where we are able to show 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 countless dollars so these are duplicate copies of the letters that go to customers verifying that the check is on the way I suggest you know if you simply begin to look at some of these here I mean this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s just I mean 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 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 know when you
get this you understand the check is chosen sure which’s when they pay so they don’t pay anything up until they in fact 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 transfer it into their bank account and they can truly rely on Wonder trust that the process has actually been ended up and how many you think you have actually processed considering that you started this we’re about 35 000 of these for
about six billion dollars wow so clearly they understand what they’re doing which’s what you require 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 truly crucial today the staff member retention credit which the majority of you have never heard of I definitely had not heard of it up until really just recently and discovered a lot about it because this is most likely the most affordable 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 expert with me this is Josh Fox he’s the founder and CEO of bottom line Principles they’re the largest processor of these ERC credits this is a 170 page program so it’s hard this isn’t like PPP we simply call 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 inform us all about it and how to get it and why I have actually ended up being yes the Ambassador and paid spokesperson for this I like 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 just start there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act used services three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone 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.
fix the cash money payroll tax refund alright go on sorry I simply need to make sure we got that point I imply that’s a big difference a loan versus cash cash I like money money that’s what we’re discussing okay 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 hard 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 staff member retention credit that person needed to be a staff member so I’m going to make the Presumption this cash is not for the owner not for individuals on the cap table not for investors it’s for employees right you had to have actually owned an organization however it’s based on you having W-2 staff members 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 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 proper so there were 6 quarters the program was open well walk us through the 6 quarters so you had quarters 2 three and 4 of 2020 and you had quarters one two and 3 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 favorite part cash just how much can you return per staff member 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 five thousand dollars per worker 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 simply changed the rules in.
2021 versus since the mayhem of the pandemic so they wished to even get more to keep those employees 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 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 5 thousand in twenty twenty that’s twenty six thousand dollars per staff member that is since that’s a great deal of money it is now there’s a caution here the PPP cash would have to be minimized from the twenty 6 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 cash somewhere around 10 thousand dollars a person so let’s say hypothetically you owned a restaurant in New York City where I’m from and you had a hundred workers and you took PPP money you would still get a million dollar in the mail from the internal revenue service so it’s huge certainly now the huge question is why does nobody know about this because look when I initially became aware of this when I first fulfilled Josh you understand I have actually got lots of financial investments in lots of business I’m a significant advocate for entrepreneurship in America and make numerous lots of financial investments in business owners of which numerous suffered through the pandemic when I first became aware of this I called BS I don’t believe it due to the fact that I use the PPP we went through the cash center Banks to get it it was extremely easy to do we had our CEOs call the banks they got their loans and that were well should have and we utilized them carefully 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 contacted us to my political leader buddies Guv 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 individuals told me well you can’t get it because you took the PPP also not real so let’s ask Josh why does no one learn about the employee retention credit you know 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 extremely 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 just process procedure that’s all um and here there was mayhem due to the fact that remember in the original cares act you could not do both programs so if you had actually done PPP you could not do ERC in the original 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 made it clear to any person about how to.
do this does your CFO know how to do this not truly 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 business your accounting professional no your accountant’s never ever done this before unless you have an account that went into this company and bottom line my company Kevin has stayed in business considering that 2009 and we have actually been dealing with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 business so a lot of our big huge business clients have worked 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 government programs.
The worker retention tax credit is a broad based refundable tax credit created to motivate.
employers to keep employees on their payroll. The credit is 50% of as much as $10,000 in wages paid by an.
company whose organization 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 despite size including tax exempt organizations. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
services who take Small Business Loans.
2. To certify, the employer needs to meet one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s organization is totally or partly suspended by government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the equivalent quarter in 2019. As soon as the.
company’s gross receipts go above 80% of a comparable quarter in 2019 they no longer qualify.
after completion of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the certifying salaries paid up to $10,000 in total.
It is effective for earnings paid after March 13th and prior to December 31, 2020.
The definition of qualifying incomes varies by whether a company had, on average, basically than.
100 staff members in 2019.
Business that concentrate on ERC filing assistance usually provide expertise and assistance to help services browse the intricate process of declaring the credit. They can provide numerous services, including:.
How is the employee retention credit calculated? Are Owner Wages Eligible For Employee Retention Credit
Eligibility Evaluation: These companies will evaluate your business’s eligibility for the ERC based upon elements such as your industry, profits, and operations. They can assist determine if you meet the requirements for the credit and determine the optimum credit amount you can declare.
Documentation and Calculation: ERC filing services will assist in collecting the necessary paperwork, such as payroll records and monetary declarations, to support your claim. They will likewise help calculate the credit amount based upon qualified earnings and other qualifying costs.
Retroactive Claim Review: If you are qualified to declare the ERC for prior quarters, these companies can evaluate your previous payroll records and financials to recognize possible chances for retroactive credits. They can assist you change prior tax returns to declare these refunds.
Filing Assistance: Companies concentrating on ERC filings will prepare and send the necessary forms and documentation in your place. This consists of completing Type 941 or any other necessary tax forms.
Compliance and Updates: ERC policies and guidance have actually developed gradually. These companies stay upgraded with the latest changes and guarantee that your filings comply with the most current standards. If the Internal revenue service demands extra details or conducts an audit associated to your ERC claim, they can likewise provide ongoing support.
It is very important to research and vet any business offering ERC filing help to ensure their trustworthiness and knowledge. Try to find established companies with experience in tax and payroll services, or think about reaching out to relied on accounting companies or tax experts who use ERC filing support.
Remember that while these companies can provide important assistance, it’s constantly an excellent idea to have a standard understanding of the ERC requirements and process yourself. This will assist you make informed choices and make sure 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 motivate businesses to maintain and pay their employees throughout the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to eligible employers, consisting of for-profit organizations, tax-exempt companies, and certain governmental entities. To qualify, companies need to meet one of two criteria:.
Business operations were completely or partially suspended due to a government order related to COVID-19.
The business experienced a substantial decline in gross receipts. As discussed previously, for 2021, a substantial decline is defined as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a significant decline is defined 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.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount amounts to a percentage (up to 70%) of certified incomes paid to workers, consisting of certain health plan expenditures. The optimum credit per staff member is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, companies that got an Income Protection Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 allows businesses to declare the ERC even if they received a PPP loan. The same earnings can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively expanded and enhanced, allowing eligible employers to claim the credit for certified incomes paid as far back as March 13, 2020. This retroactive provision offers an opportunity for organizations to change prior-year tax returns and receive refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their employment tax returns, generally Type 941. If the credit exceeds the quantity of employment taxes owed, the excess can be refunded to the employer.
It’s important to note that the ERC arrangements and eligibility criteria have developed over time. The best strategy is to consult with a tax expert or check out the official internal revenue service site for the most detailed and current info regarding the ERC, consisting of any recent legal changes or updates.
To qualify for the ERC, an organization should meet among the following requirements:.
The business operations were fully or partly suspended due to a government order related to COVID-19.
The business experienced a considerable decrease in gross invoices. For 2021, a significant decrease is defined as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
The ERC is readily available to companies of all sizes, consisting of tax-exempt companies, however there are some exceptions. For example, federal government entities and services that received a PPP loan may have constraints on claiming the credit.
The process for claiming the ERC involves completing the required forms and consisting of the credit on your work income tax return (typically Type 941). The exact time it takes to process the credit can differ based on numerous aspects, consisting of the complexity of your business and the work of the internal revenue service. It’s advised to speak with a tax expert for assistance specific to your situation.
There are several business that can assist with the process of claiming the ERC. Some widely known companies that offer assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the information offered here is based upon basic knowledge and might not show the most current updates or changes to the ERC. It is necessary to consult with a tax expert or go to the main IRS site for the most accurate and current information relating to eligibility, claiming treatments, and readily available support.
Less than 100. The credit is based if the company had 100 or fewer employees on average in 2019.
on incomes paid to all employees whether they in fact worked or not. In other words, even if the.
employees worked full-time and got paid 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.
allowed just for wages paid to workers who did not work throughout the calendar quarter.
In both cases, “salaries” consists of not simply money payments however also a portion of the expense of employer.
supplied healthcare. Are Owner Wages Eligible For Employee Retention Credit
Employers can be right away reimbursed for the credit by lowering the quantity of payroll taxes they.