Lets talk first about Sole Proprietor Employee Retention Credit :
Our group here what do these men doing everybody in this room is helping teach individuals about ERC and uh always provide a beautiful breakfast and have people truly learn more about the program we must head to the room 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 numerous countless dollars actually Kevin hundreds of countless dollars so these are replicate copies of the letters that go to customers verifying that the check is on the way I imply you know if you just begin 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 mean it’s just I suggest think of the number of actual 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 know when you
get this you know the check is opted for sure and that’s when they pay so they don’t pay anything until they really get the money they don’t pay bottom line Wonder trust anything till this letter is confirmed the check is on the way they transfer it into their checking account and they can really rely on Wonder trust that the process has actually been completed and how many you believe you have actually processed because you started this we have to do with 35 000 of these for
about six billion dollars wow so plainly they know what they’re doing and that’s what you need 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 Fantastic here you’re at my YouTube channel we’re speaking about something truly crucial today the employee retention credit which the majority of you have actually never become aware of I definitely hadn’t heard of it up until extremely just recently and found out a lot about it due to the fact that this is most likely the lowest expense of capital for any small company anywhere
anytime if you have staff members between 5 and five hundred so I have actually got the expert 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 difficult this isn’t like PPP we simply call up your bank manager and state offer me a loan it does not 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’ve become yes the Ambassador and paid representative for this I love this program it’s disappearing soon you got to learn all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply start there so during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act used businesses three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everyone 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 money payroll tax refund okay go on sorry I simply need to make sure we got that point I mean that’s a big difference a loan versus money cash I like money money 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 original cares Act is the ERC and yes Kevin it is a gorgeous hard check in the mail where you get actual cash from the IRS all right so let’s talk about how it works due to the fact that it seems like to me if it’s a if it’s worker retention credit that person had to be an employee 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 staff members right you had to have actually owned a service however it’s based on you having W-2 workers in America not 10.99. so as long as you had W-2 workers 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 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 3 and 4 of 2020 and you had quarters one two and 3 of 2021. okay so that’s how it’s determined you have to be on the W-2 during that duration now let’s talk my preferred part money just how much can you get back per employee that was on a W-2 in those six quarters so the estimation in 2020 to be exact Kevin is 50 of the staff member’s income to a maximum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers escalated to 70 of the employee’s salary to an optimum of seven thousand per quarter how did that occur um they just changed 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 as much as five thousand Max and then what occurs 21 000 Max in 2021 oh that’s how you develop twenty 6 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 since that’s a lot of cash 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 lower the 26 000 so what we’re seeing typically Kevin is if you took PPP cash somewhere around 10 thousand dollars an individual so let’s say hypothetically you owned a dining establishment 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 IRS so it’s big clearly now the big question is why does nobody know about this since appearance when I initially became aware of this when I first satisfied Josh you understand I have actually got lots of financial investments in lots of business I’m a major supporter for entrepreneurship in America and make many many financial investments in business owners of which lots of suffered through the pandemic when I initially found out about this I called BS I don’t believe it because I utilize the PPP we went through the money center Banks to get it it was really easy to do we had our CEOs call the banks they got their loans and that were well deserved and we utilized them wisely to stay alive throughout the pandemic so when I became aware of this I said nah it can’t hold true but when I dug around I even contacted us to my political leader buddies Governor Senators they didn’t understand about it I mean that’s how you know that’s how misinformation is that there’s no info out there then a lot of individuals informed me well you can’t get it due to the fact that you took the PPP also not real so let’s ask Josh why does nobody learn about the employee retention credit you understand what’s interesting you’re discussing the banks Kevin due to the fact that in the PPP loan process the federal government made it extremely clear that if you desired 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 turmoil due to the fact that keep in mind in the original cares act you might refrain from doing both programs so if you had done PPP you could refrain from doing ERC in the original program and when they changed the law in 2021 the banks were not doing ERC because 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 understand how to do this not really she or he’s never done it before do the banks do it nope the banks don’t do it the payroll business yeah a few of them are doing it as a payroll business your accountant no your accounting professional’s never ever done this prior to unless you have an account that entered into this service and bottom line my firm Kevin has stayed in business because 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 great deal 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 joblessness tax work opportunity tax credits research and development tax credits unclaimed property real estate tax all of these other federal government programs.
The worker retention tax credit is a broad based refundable tax credit created to encourage.
employers to keep workers on their payroll. The credit is 50% of up to $10,000 in wages paid by an.
Because of COVID-19 or whose gross receipts, company whose service is totally or partially suspended.
decline by more than 50%.
1. The credit is readily available to all companies regardless of size including tax exempt organizations. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) little.
services 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 employer’s service is completely or partly suspended by government order due to COVID-19.
during the calendar quarter or.
o the company’s gross invoices are listed below 50% of the similar 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 the end of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the qualifying wages paid up to $10,000 in total.
It works for wages paid after March 13th and prior to December 31, 2020.
The definition of qualifying salaries differs by whether a company had, usually, more or less than.
100 employees in 2019.
Business that focus on ERC filing help typically offer proficiency and assistance to assist businesses browse the intricate process of declaring the credit. They can provide different services, including:.
How is the employee retention credit calculated? Sole Proprietor Employee Retention Credit
Eligibility Assessment: These companies will examine your organization’s eligibility for the ERC based upon aspects such as your market, income, and operations. If you fulfill the requirements for the credit and recognize the optimum credit quantity you can declare, they can assist determine.
Documents and Computation: ERC filing services will help in collecting the required paperwork, such as payroll records and monetary declarations, to support your claim. They will likewise help compute the credit quantity based on qualified wages and other certifying costs.
Retroactive Claim Review: If you are eligible to claim the ERC for previous quarters, these companies can evaluate your previous payroll records and financials to determine potential chances for retroactive credits. They can assist you amend prior tax returns to declare these refunds.
Filing Support: Business specializing in ERC filings will prepare and send the essential forms and documents on your behalf. This consists of completing Kind 941 or any other required tax forms.
Compliance and Updates: ERC regulations and guidance have actually progressed with time. These companies remain updated with the latest modifications and make sure that your filings abide by the most existing standards. They can likewise offer ongoing assistance if the internal revenue service demands extra info or carries out an audit related to your ERC claim.
It is essential to research study and veterinarian any company providing ERC filing help to guarantee their reliability and know-how. Look for recognized firms with experience in tax and payroll services, or think about reaching out to relied on accounting companies or tax professionals who use ERC filing support.
Bear in mind that while these companies can provide important support, it’s always an excellent concept to have a basic understanding of the ERC requirements and procedure yourself. This will help you make notified choices and guarantee accurate filings.
The Employee 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 motivate organizations to retain and pay their staff members throughout the pandemic, even if their operations have actually been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to eligible employers, including for-profit companies, tax-exempt companies, and certain governmental entities. To certify, companies should meet one of two criteria:.
The business operations were totally or partly suspended due to a government order related to COVID-19.
The business experienced a significant decline in gross receipts. As mentioned earlier, for 2021, a significant decrease is specified as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a substantial decline is defined as a 20% decline in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross receipts 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 is equal to a percentage (up to 70%) of certified earnings paid to workers, consisting of particular health insurance costs. The maximum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, services that received an Income Protection Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 enables companies to claim the ERC even if they got a PPP loan. The same wages can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively broadened and improved, allowing qualified employers to claim the credit for certified earnings paid as far back as March 13, 2020. This retroactive arrangement supplies an opportunity for companies 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 goes beyond the quantity of work taxes owed, the excess can be reimbursed to the company.
It is essential to note that the ERC arrangements and eligibility requirements have actually progressed gradually. The best course of action is to seek advice from a tax expert or visit the official internal revenue service site for the most comprehensive and updated information concerning the ERC, consisting of any recent legal modifications or updates.
To get approved for the ERC, a company needs to fulfill among the following requirements:.
The business operations were fully or partly suspended due to a government order related to COVID-19.
Business experienced a substantial decrease in gross invoices. For 2021, a significant decrease is specified as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decline in gross receipts compared to the instantly preceding quarter.
The ERC is offered to businesses of all sizes, consisting of tax-exempt companies, but there are some exceptions. For instance, federal government entities and businesses that got a PPP loan may have constraints on claiming the credit.
The process for declaring the ERC includes completing the needed kinds and consisting of the credit on your employment tax return (typically Type 941). The exact time it requires to process the credit can differ based upon a number of factors, consisting of the complexity of your company and the work of the IRS. It’s suggested to seek advice from a tax expert for guidance specific to your scenario.
There are numerous companies that can assist with the procedure of claiming the ERC. Some widely known companies that use support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the info offered here is based on general knowledge and might not reflect the most current updates or changes to the ERC. It is essential to talk to a tax expert or check out the main internal revenue service website for the most up-to-date and precise information regarding eligibility, declaring procedures, and offered assistance.
Less than 100. If the company had 100 or less staff members on average in 2019, then the credit is based.
on salaries paid to all workers whether they actually worked or not. Simply put, even if the.
employees worked full time and made money for full-time work, the company still gets the credit.
Greater than 100. If the employer had more than 100 staff members on average in 2019, then the credit is.
allowed only for wages paid to staff members who did not work during the calendar quarter.
In both cases, “salaries” includes not simply cash payments however also a portion of the expense of company.
provided health care. Sole Proprietor Employee Retention Credit
Employers can be immediately reimbursed for the credit by minimizing the quantity of payroll taxes they.