Lets talk first about Can A Sole Proprietor Claim The Employee Retention Credit :
Our team here what do these guys doing everyone in this space is helping teach people about ERC and uh always offer a stunning breakfast and have individuals really 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 wish 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 clients validating that the check is on the method I mean you know if you just begin to 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 mean it’s simply I mean think about 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 verified the numbers are verified and the check is on the mail in the mail from the IRS 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 opted for sure and that’s when they pay so they do not pay anything up until they in fact receive the money they don’t pay bottom line Wonder trust anything till this letter is confirmed the check is on the method they transfer it into their checking account and they can really rely on Wonder trust that the process has been finished and how many you believe you have actually processed since you began this we’re about 35 000 of these for
about six billion dollars wow so plainly they know what they’re doing and that’s what you require you need 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 Terrific here you’re at my YouTube channel we’re talking about something really essential today the worker retention credit which most of you have actually never become aware of I certainly had not heard of it till really recently and learned a lot about it since this is most likely the most affordable cost of capital for any small business 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 biggest processor of these ERC credits this is a 170 page program so it’s challenging this isn’t like PPP we just phone your bank supervisor and say give 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’ve become yes the Ambassador and paid spokesperson for this I enjoy this program it’s going away very soon you got to learn all about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply start there so throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act used organizations three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone it makes a huge distinction right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
remedy the money money payroll tax refund alright go on sorry I just have to ensure we got that point I imply that’s a huge distinction a loan versus money cash I like cash cash that’s what we’re talking about 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 initial cares Act is the ERC and yes Kevin it is a beautiful difficult check in the mail where you get actual money from the internal revenue service 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 staff member retention credit that person had to be a worker so I’m going to make the Presumption this money is not for the owner not for individuals on the cap table not for investors it’s for employees right you needed to have actually owned a company however it’s based on you having W-2 employees in America not 10.99. As long as you had W-2 staff members 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 six 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 two three and four of 2020 and you had quarters one 2 and three of 2021. fine so that’s how it’s determined you have to be on the W-2 during that period now let’s talk my favorite part money how much can you return per worker that was on a W-2 in those 6 quarters so the computation in 2020 to be specific Kevin is 50 of the employee’s income to a maximum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s salary to a maximum of seven thousand per quarter how did that occur um they simply changed the rules in.
2021 versus because the turmoil of the pandemic so they wished 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 takes place 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 employee that is since that’s a lot of cash it is now there’s a caution here the PPP cash would need to be decreased from the twenty six 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 money someplace around ten thousand dollars an individual so let’s state hypothetically you owned a restaurant in New york city 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 IRS so it’s big clearly now the huge question is why does nobody understand about this since appearance when I first found out about this when I initially satisfied Josh you understand I’ve got great deals of investments in great deals of companies I’m a major supporter for entrepreneurship in America and make numerous lots of financial investments in entrepreneurs of which lots of suffered through the pandemic when I first found out about this I called BS I don’t think 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 and that were well should have and we utilized them sensibly to survive throughout the pandemic so when I found out about this I said nah it can’t be true but when I dug around I even contacted us to my political leader friends Guv Senators they didn’t know about it I mean that’s how you know that’s how misinformation is that there’s no information out there then a lot of people told me well you can’t get it since you took the PPP also not real so let’s ask Josh why does no one know about the employee retention credit you understand what’s interesting you’re talking about the banks Kevin due to the fact that in the PPP loan process the federal government made it really 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 process in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply process procedure that’s all um and here there was mayhem since remember in the original cares act you might refrain from doing both programs so if you had actually done PPP you could refrain from doing ERC in the original program and when they altered the law in 2021 the banks were not doing ERC due to the fact that it’s not alone so you’re getting a tax refund so the federal government never ever made it clear to anyone about how to.
do this does your CFO know how to do this not truly he or she’s never ever done it previously 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 accounting professional no your accountant’s never done this before unless you have an account that went into this company and bottom line my firm Kevin has been in business because 2009 and we’ve been working with the federal government and the state government to recover money for Fortune 500 Fortune 1000 business so a lot of our big big business clients have worked with bottom line to recuperate other government programs we have actually done sales tax and use tax joblessness tax work chance tax credits research and development tax credits unclaimed property property tax all of these other government programs.
The staff member retention tax credit is a broad based refundable tax credit created to motivate.
companies to keep employees on their payroll. The credit is 50% of as much as $10,000 in wages paid by an.
Since of COVID-19 or whose gross receipts, employer whose company is totally or partially suspended.
decline by more than 50%.
1. The credit is available to all employers regardless of size consisting of tax exempt organizations. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
companies who take Small Business Loans.
2. To qualify, the company needs to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s organization is fully or partly suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the similar quarter in 2019. Once the.
employer’s gross invoices go above 80% of a comparable quarter in 2019 they no longer certify.
after the end of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the qualifying earnings paid up to $10,000 in overall.
It is effective for wages paid after March 13th and before December 31, 2020.
The meaning of qualifying salaries varies by whether an employer had, typically, basically than.
100 employees in 2019.
Business that concentrate on ERC filing support generally offer proficiency and support to assist services navigate the intricate procedure of claiming the credit. They can offer various services, consisting of:.
How is the employee retention credit calculated? Can A Sole Proprietor Claim The Employee Retention Credit
Eligibility Evaluation: These companies will evaluate your company’s eligibility for the ERC based on factors such as your market, income, and operations. If you satisfy the requirements for the credit and recognize the maximum credit quantity you can declare, they can assist identify.
Documents and Calculation: ERC filing services will assist in gathering the necessary documentation, such as payroll records and financial declarations, to support your claim. They will also help compute the credit amount based upon eligible incomes and other certifying costs.
Retroactive Claim Review: If you are eligible to declare the ERC for previous quarters, these companies can review your past payroll records and financials to recognize prospective opportunities for retroactive credits. They can assist you amend prior income tax return to declare these refunds.
Filing Help: Business focusing on ERC filings will prepare and submit the needed types and documents in your place. This consists of completing Form 941 or any other necessary tax forms.
Compliance and Updates: ERC regulations and guidance have actually developed with time. These companies stay updated with the current modifications and ensure that your filings abide by the most existing standards. They can also supply continuous assistance if the IRS demands extra details or performs an audit related to your ERC claim.
It is very important to research study and vet any company offering ERC filing support to guarantee their credibility and know-how. Search for established firms with experience in tax and payroll services, or think about reaching out to relied on accounting companies or tax specialists who use ERC submitting assistance.
Remember that while these companies can supply valuable support, it’s constantly an excellent idea to have a fundamental understanding of the ERC requirements and process yourself. This will assist you make informed choices and guarantee accurate filings.
The Worker Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief measures. The goal of the ERC is to encourage services to retain and pay their staff members throughout the pandemic, even if their operations have actually been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is available to eligible employers, including for-profit organizations, tax-exempt organizations, and particular governmental entities. To certify, employers should meet one of two criteria:.
The business operations were totally or partly suspended due to a federal government order related to COVID-19.
Business experienced a substantial decrease in gross receipts. As pointed out earlier, for 2021, a considerable decline is specified as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decline is defined as a 20% decline in gross invoices compared to the very same quarter in 2019, or a 20% decrease in gross receipts compared to the immediately preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity amounts to a percentage (approximately 70%) of certified earnings paid to workers, consisting of specific health insurance costs. The optimum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, businesses that got an Income Defense Program (PPP) loan were not qualified 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 same salaries can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and boosted, allowing qualified companies to claim the credit for qualified incomes paid as far back as March 13, 2020. This retroactive provision offers an opportunity for organizations 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, usually Form 941. The excess can be reimbursed to the employer if the credit exceeds the amount of work taxes owed.
It is essential to note that the ERC provisions and eligibility criteria have actually developed in time. The best strategy is to speak with a tax professional or visit the main IRS site for the most up-to-date and in-depth information regarding the ERC, including any recent legislative modifications or updates.
To get approved for the ERC, a business should fulfill among the following criteria:.
Business operations were totally or partly suspended due to a government order related to COVID-19.
Business experienced a substantial decrease in gross receipts. For 2021, a significant decrease is defined as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
The ERC is available to organizations of all sizes, consisting of tax-exempt organizations, however there are some exceptions. For example, government entities and organizations that got a PPP loan might have constraints on declaring the credit.
The process for declaring the ERC includes completing the necessary types and including the credit on your work income tax return (generally Form 941). The exact time it requires to process the credit can differ based upon several aspects, consisting of the complexity of your company and the workload of the internal revenue service. It’s recommended to speak with a tax professional for guidance particular to your scenario.
There are a number of business that can assist with the process of claiming the ERC. Some well-known companies that provide assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the details provided here is based on basic knowledge and may not show the most current updates or modifications to the ERC. It is essential to seek advice from a tax professional or go to the main IRS site for the most precise and current information regarding eligibility, claiming procedures, and offered help.
Less than 100. The credit is based if the employer had 100 or fewer staff members on average in 2019.
on salaries paid to all workers whether they really worked or not. Simply put, even if the.
employees worked full-time and earned money for full-time work, the company still gets the credit.
Greater than 100. If the employer had more than 100 staff members usually in 2019, then the credit is.
enabled just for incomes paid to employees who did not work during the calendar quarter.
In both cases, “incomes” consists of not simply cash payments but also a part of the expense of company.
supplied health care. Can A Sole Proprietor Claim The Employee Retention Credit
Companies can be right away reimbursed for the credit by lowering the quantity of payroll taxes they.