Lets talk first about Are Part Time Employees Eligible For Employee Retention Credit :
Our group here what do these people doing everyone in this space is helping teach people about ERC and uh always provide a stunning breakfast and have people really learn about the program we ought to head to the room where we are able to display some of the checks that we are getting for business and I ‘d like to see that what is this this is uh hundreds of millions of dollars literally Kevin hundreds of countless dollars so these are replicate copies of the letters that go to customers confirming that the check is on the way I mean you know if you simply start to look at a few of these here I suggest this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I imply it’s simply I indicate think about how many 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 customer so that’s how you’re able to track it you know when you
get this you understand the check is opted for sure and that’s when they pay so they do not pay anything until they actually get the cash they do not pay bottom line Wonder trust anything till this letter is verified the check is on the way they deposit it into their checking account and they can genuinely rely on Wonder trust that the process has been ended up and how many you think you’ve processed since you began this we’re about 35 000 of these for
about 6 billion dollars wow so clearly they know what they’re doing and that’s what you need 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 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 heard of I definitely hadn’t heard of it up until very just recently and learned a lot about it because this is probably the lowest expense of capital for any small company anywhere
anytime if you have staff members in between five and five hundred so I’ve got the specialist 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 challenging this isn’t like PPP we just call your bank manager and state provide 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 soon you got to find out everything about it let’s talk worker retention credit Josh Fox what is an ERC let’s simply begin there so during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act used businesses 3 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.
correct the cash money payroll tax refund all right go on sorry I simply have to ensure we got that point I indicate that’s a big distinction a loan versus cash cash I like cash 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 tough 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 seems like to me if it’s a if it’s staff member retention credit that individual needed to be a staff member so I’m going to make the Assumption this money is not for the owner not for people on the cap table not for investors it’s for staff members right you had to have owned a business however it’s based upon 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 first six months of 2021 on the W-2 proper so there were six quarters the program was open well stroll us through the six quarters so you had quarters two three and 4 of 2020 and you had quarters one 2 and three of 2021. okay so that’s how it’s determined you need to be on the W-2 throughout that duration now let’s talk my favorite part money how much can you get back per staff member that was on a W-2 in those 6 quarters so the calculation in 2020 to be specific Kevin is 50 of the staff member’s salary to an optimum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers increased to 70 of the staff member’s income to a maximum of seven thousand per quarter how did that occur um they simply changed the rules in.
2021 versus because the chaos of the pandemic so they wanted 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 approximately five thousand Max and then what occurs 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 6 thousand dollars per employee that is because that’s a great deal of cash it is now there’s a caution here the PPP cash would have to be reduced 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 usually Kevin is if you took PPP money 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 employees and you took PPP money you would still get a million dollar in the mail from the internal revenue service so it’s huge undoubtedly now the big question is why does no one learn about this because appearance when I initially heard about this when I initially fulfilled Josh you understand I’ve got great deals of financial investments in great deals of business I’m a major supporter for entrepreneurship in America and make numerous numerous investments in business owners of which many suffered through the pandemic when I initially heard about this I called BS I do not believe it since I use the PPP we went through the money 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 been worthy of and we utilized them wisely to stay alive throughout the pandemic so when I heard about this I stated nah it can’t be true however when I dug around I even called to my politician good friends Governor Senators they didn’t know 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 since you took the PPP also not true so let’s ask Josh why does nobody learn about the staff member retention credit you know what’s interesting you’re speaking about the banks Kevin due to the fact that in the PPP loan procedure 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 country and they would process procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s just procedure process that’s all um and here there was turmoil because remember in the initial cares act you might not do both programs so if you had 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 anyone about how to.
do this does your CFO understand how to do this not actually she or he’s never done it in the past do the banks do it nope the banks do not do it the payroll companies yeah a few of them are doing it as a payroll company your accountant no your accounting professional’s never ever done this before unless you have an account that went into this business and bottom line my firm Kevin has actually stayed in business considering that 2009 and we have actually been working with the federal government and the state federal government to recuperate cash for Fortune 500 Fortune 1000 companies so a lot of our huge huge corporate customers have worked with bottom line to recover other 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 worker 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 approximately $10,000 in earnings paid by an.
company whose company is completely or partially suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
1. The credit is available to all companies no matter size consisting of tax exempt organizations. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) small.
organizations who take Small Business Loans.
2. To certify, the employer has to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s company is fully or partially suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross invoices are below 50% of the similar quarter in 2019. As soon as the.
company’s gross receipts exceed 80% of a similar quarter in 2019 they no longer qualify.
after the end of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the qualifying earnings paid up to $10,000 in total.
It is effective for earnings paid after March 13th and before December 31, 2020.
The definition of certifying incomes differs by whether a company had, typically, more or less than.
100 employees in 2019.
Business that specialize in ERC filing help typically offer competence and support to assist companies browse the intricate procedure of claiming the credit. They can offer various services, consisting of:.
How is the employee retention credit calculated? Are Part Time Employees Eligible For Employee Retention Credit
Eligibility Evaluation: These business will examine your service’s eligibility for the ERC based on factors such as your market, profits, and operations. They can assist identify if you fulfill the requirements for the credit and recognize the maximum credit quantity you can declare.
Documentation and Computation: ERC filing services will help in gathering the needed documentation, such as payroll records and monetary statements, to support your claim. They will likewise assist compute the credit quantity based on qualified incomes and other certifying expenditures.
Retroactive Claim Review: If you are qualified to claim the ERC for previous quarters, these business can evaluate your past payroll records and financials to recognize potential opportunities for retroactive credits. They can help you modify previous tax returns to declare these refunds.
Filing Help: Companies focusing on ERC filings will prepare and submit the required forms and documents in your place. This includes finishing Kind 941 or any other required tax return.
Compliance and Updates: ERC policies and guidance have actually developed over time. These business stay upgraded with the latest modifications and guarantee that your filings adhere to the most present guidelines. They can likewise supply continuous assistance if the IRS requests additional info or carries out an audit related to your ERC claim.
It is necessary to research study and vet any company providing ERC filing support to ensure their credibility and competence. Look for recognized companies with experience in tax and payroll services, or think about connecting to trusted accounting firms or tax experts who offer ERC filing assistance.
Keep in mind that while these companies can supply valuable help, it’s always an excellent idea to have a basic understanding of the ERC requirements and process yourself. This will help you make informed choices and guarantee precise filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief procedures. The objective of the ERC is to motivate services to keep and pay their workers throughout the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to qualified companies, including for-profit companies, tax-exempt organizations, and certain governmental entities. To certify, employers must meet one of two criteria:.
Business operations were fully or partly suspended due to a government order related to COVID-19.
Business experienced a significant decrease in gross receipts. As discussed previously, for 2021, a substantial decrease is defined as a 20% decrease in gross invoices compared to the exact 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% decrease in gross receipts compared to the immediately 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 (approximately 70%) of certified salaries paid to workers, including particular health insurance 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: At first, organizations that received an Income Security Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 enables organizations to claim the ERC even if they received a PPP loan. The very 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 eligible companies to claim the credit for qualified incomes paid as far back as March 13, 2020. This retroactive arrangement supplies a chance for businesses to amend prior-year tax returns and receive refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their work income tax return, typically Kind 941. The excess can be reimbursed to the company if the credit exceeds the amount of work taxes owed.
It is essential to note that the ERC arrangements and eligibility requirements have actually evolved gradually. The best course of action is to seek advice from a tax professional or check out the official internal revenue service website for the most in-depth and updated information concerning the ERC, including any recent legal modifications or updates.
To qualify for the ERC, an organization should meet among the following requirements:.
The business operations were fully or partially suspended due to a government order related to COVID-19.
The business experienced a considerable decline in gross receipts. For 2021, a considerable decrease is defined as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decline in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross invoices compared to the immediately preceding quarter.
The ERC is offered to organizations of all sizes, including tax-exempt organizations, however there are some exceptions. Government entities and businesses that received a PPP loan might have restrictions on declaring the credit.
The procedure for declaring the ERC involves completing the essential kinds and including the credit on your work tax return (generally Form 941). The exact time it takes to process the credit can vary based on numerous elements, consisting of the intricacy of your organization and the workload of the IRS. It’s suggested to seek advice from a tax expert for assistance specific to your situation.
There are a number of business that can help with the process of claiming the ERC. These consist of accounting firms, tax advisory services, and payroll company. Some well-known business that use assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research and call these business directly to ask about their services and fees.
Please keep in mind that the information supplied here is based on basic knowledge and may not show the most current updates or modifications to the ERC. It is necessary to speak with a tax expert or go to the official IRS site for the most up-to-date and accurate info regarding eligibility, claiming treatments, and offered assistance.
Less than 100. If the company had 100 or fewer workers usually in 2019, then the credit is based.
on incomes paid to all employees whether they in fact worked or not. To put it simply, even if the.
staff members worked full-time and earned money for full time work, the company still gets the credit.
Greater than 100. If the company had more than 100 staff members on average in 2019, then the credit is.
enabled just for wages paid to staff members who did not work throughout the calendar quarter.
In both cases, “wages” consists of not just money payments however also a portion of the cost of company.
provided healthcare. Are Part Time Employees Eligible For Employee Retention Credit
Companies can be immediately compensated for the credit by minimizing the quantity of payroll taxes they.