Lets talk first about Do Sole Proprietors Qualify For Employee Retention Credit :
Our group here what do these people doing everyone in this space is assisting teach individuals about ERC and uh constantly offer a gorgeous breakfast and have people truly learn about the program we need to head to the space where we have the ability to show some 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 hundreds of millions of dollars so these are replicate copies of the letters that go to clients verifying that the check is on the method I suggest you understand if you just start 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 just I suggest 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 verified the numbers are verified and the check is on the mail in the mail from the internal revenue service heading to the customer so that’s how you have the ability to track it you understand when you
receive this you know the check is gone for sure and that’s when they pay so they don’t pay anything up until they in fact receive the cash they do not pay bottom line Wonder trust anything up until this letter is confirmed the check is on the way they deposit it into their bank account and they can truly rely on Wonder trust that the procedure has been ended up and how many you think you have actually processed because you began 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 need you require 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 Fantastic here you’re at my YouTube channel we’re talking about something really important today the employee retention credit which most of you have never become aware of I definitely hadn’t become aware of it up until extremely recently and discovered a lot about it since this is most likely the most affordable expense of capital for any small company anywhere
anytime if you have employees in between five and five hundred so I have actually got the professional with me this is Josh Fox he’s the creator and CEO of bottom line Principles they’re the biggest processor of these ERC credits this is a 170 page program so it’s not easy this isn’t like PPP we just call your bank supervisor and state provide 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 ended up being yes the Ambassador and paid spokesperson for this I love this program it’s going away very soon you got to learn everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just start there so throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act offered organizations 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 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 alright go on sorry I just need to ensure we got that point I suggest that’s a big distinction a loan versus money cash I like money money 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 initial cares Act is the ERC and yes Kevin it is a beautiful difficult check in the mail where you get real cash from the internal revenue service 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 employee retention credit that person needed to be a worker so I’m going to make the Assumption 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 a business but 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 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 four of 2020 and you had quarters one 2 and three of 2021. fine so that’s how it’s measured you have to be on the W-2 during that duration now let’s talk my preferred part cash how much can you return per employee that was on a W-2 in those six quarters so the computation in 2020 to be exact Kevin is 50 of the worker’s salary to a maximum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers increased to 70 of the worker’s income to a maximum of seven thousand per quarter how did that occur um they just changed the rules in.
2021 versus because the chaos of the pandemic so they wanted 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 as much as 5 thousand Max and after that what happens 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 6 thousand dollars per staff member that is because that’s a great deal of money it is now there’s a caution here the PPP money would need to be minimized from the twenty 6 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 money someplace 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 staff members and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s big clearly now the big question is why does no one know about this since appearance when I first heard about this when I first met Josh you understand I’ve got great deals of financial investments in great deals of companies I’m a significant supporter for entrepreneurship in America and make many many financial investments in entrepreneurs of which lots of suffered through the pandemic when I first found out about this I called BS I do not think it due to the fact that I utilize 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 which were well deserved and we utilized them sensibly to stay alive throughout 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 political leader buddies Guv Senators they didn’t learn about it I mean that’s how you understand that’s how false information is that there’s no info out there then a lot of people informed me well you can’t get it due to the fact that you took the PPP likewise not true so let’s ask Josh why does nobody know about the worker retention credit you understand what’s intriguing you’re speaking about the banks Kevin because 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 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 procedure procedure that’s all um and here there was chaos because remember in the original cares act you could refrain from doing both programs so if you had 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 government never ever made it clear to anybody about how to.
do this does your CFO understand how to do this not actually he or she’s never ever done it before do the banks do it nope the banks don’t do it the payroll business yeah some of them are doing it as a payroll company your accounting professional no your accounting professional’s never done this before unless you have an account that entered into this company and bottom line my firm Kevin has been in business since 2009 and we have actually been working 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 corporate clients have actually worked with bottom line to recuperate other federal government programs we have actually 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 staff member retention tax credit is a broad based refundable tax credit developed to motivate.
companies to keep workers on their payroll. The credit is 50% of approximately $10,000 in incomes paid by an.
Since of COVID-19 or whose gross invoices, employer whose business is fully or partially suspended.
decline by more than 50%.
1. The credit is readily available to all employers despite 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 company needs to satisfy one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s business is totally or partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the company’s gross receipts are below 50% of the equivalent quarter in 2019. Once the.
employer’s gross invoices go above 80% of a comparable quarter in 2019 they no longer certify.
after completion of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the qualifying incomes paid up to $10,000 in total.
It works for incomes paid after March 13th and before December 31, 2020.
The meaning of certifying earnings varies by whether an employer had, usually, more or less than.
100 employees in 2019.
Companies that focus on ERC filing assistance generally offer competence and support to help businesses navigate the complicated process of claiming the credit. They can use numerous services, including:.
How is the employee retention credit calculated? Do Sole Proprietors Qualify For Employee Retention Credit
Eligibility Assessment: These business will evaluate your organization’s eligibility for the ERC based upon factors such as your market, revenue, and operations. If you meet the requirements for the credit and determine the optimum credit amount you can declare, they can assist figure out.
Documents and Estimation: ERC filing services will help in gathering the needed documents, such as payroll records and monetary statements, to support your claim. They will also assist calculate the credit amount based upon eligible salaries and other qualifying costs.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for prior quarters, these business can evaluate your previous payroll records and financials to identify prospective opportunities for retroactive credits. They can assist you amend previous income tax return to claim these refunds.
Filing Assistance: Companies concentrating on ERC filings will prepare and send the necessary kinds and documentation on your behalf. This consists of completing Type 941 or any other required tax return.
Compliance and Updates: ERC guidelines and assistance have developed gradually. These companies remain upgraded with the most recent changes and guarantee that your filings adhere to the most existing guidelines. They can also provide continuous assistance if the IRS demands extra details or carries out an audit related to your ERC claim.
It is necessary to research and veterinarian any company offering ERC filing support to ensure their reliability and know-how. Search for established companies with experience in tax and payroll services, or think about connecting to trusted accounting companies or tax specialists who offer ERC submitting assistance.
Remember that while these companies can offer valuable support, it’s constantly a good concept to have a standard understanding of the ERC requirements and process yourself. This will assist you make notified choices and ensure accurate filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief measures. The goal of the ERC is to encourage companies to retain and pay their employees throughout the pandemic, even if their operations have actually been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to eligible companies, consisting of for-profit organizations, tax-exempt organizations, and specific governmental entities. To certify, employers must meet one of two criteria:.
Business operations were fully or partly suspended due to a federal government order related to COVID-19.
The business experienced a significant decline in gross receipts. As pointed out previously, for 2021, a substantial decrease is specified as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decline in gross invoices compared to the right away preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity amounts to a portion (up to 70%) of qualified salaries paid to staff members, including certain health plan expenditures. The optimum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, organizations that received a Paycheck Security Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 allows services to declare the ERC even if they received a PPP loan. However, the exact same earnings can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and enhanced, allowing qualified employers to declare the credit for certified wages paid as far back as March 13, 2020. This retroactive arrangement supplies an opportunity for businesses to amend prior-year income tax return and get refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their employment tax returns, typically Form 941. The excess can be reimbursed to the employer if the credit surpasses the amount of employment taxes owed.
It is very important to keep in mind that the ERC arrangements and eligibility requirements have actually progressed in time. The best strategy is to consult with a tax expert or visit the main internal revenue service site for the most in-depth and current information regarding the ERC, consisting of any recent legal changes or updates.
To receive the ERC, an organization should satisfy among the following criteria:.
Business operations were completely or partially suspended due to a federal government order related to COVID-19.
The business experienced a substantial decline in gross receipts. 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 specified as a 20% decrease in gross invoices 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, including tax-exempt organizations, but there are some exceptions. For example, federal government entities and organizations that got a PPP loan might have restrictions on claiming the credit.
The process for declaring the ERC involves completing the needed kinds and consisting of the credit on your employment tax return (generally Kind 941). The exact time it takes to process the credit can differ based on a number of factors, including the complexity of your company and the work of the IRS. It’s suggested to seek advice from a tax expert for assistance particular to your situation.
There are several business that can aid with the process of declaring the ERC. These include accounting firms, tax advisory services, and payroll company. Some popular business that provide support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research study and contact these companies straight to ask about their services and costs.
Please keep in mind that the information supplied here is based on general understanding and may not reflect the most current updates or changes to the ERC. It is necessary to seek advice from a tax professional or visit the official IRS website for the most accurate and updated details relating to eligibility, claiming procedures, and readily available support.
Less than 100. If the employer had 100 or less staff members typically in 2019, then the credit is based.
on incomes paid to all workers whether they actually worked or not. To put it simply, even if the.
staff members worked full-time and got paid for full-time work, the employer still gets the credit.
Greater than 100. If the company had more than 100 workers usually in 2019, then the credit is.
permitted only for salaries paid to employees who did not work during the calendar quarter.
In both cases, “earnings” includes not simply cash payments however also a part of the expense of employer.
provided healthcare. Do Sole Proprietors Qualify For Employee Retention Credit
Companies can be instantly compensated for the credit by reducing the amount of payroll taxes they.