Lets talk first about Do Owner Wages Count For Employee Retention Credit :
Our team here what do these men doing everyone in this room is helping teach people about ERC and uh always supply a lovely breakfast and have people actually discover the program we should head to the room 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 numerous millions of dollars actually Kevin numerous countless dollars so these are duplicate copies of the letters that go to customers confirming that the check is on the way I suggest you know if you just start to look at a few of these here I mean this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I imply it’s simply I suggest think about the number of actual customers that went through the program yeah this is the very end this is the party at the end when the check is confirmed the numbers are confirmed and the check is on the mail in the mail from the IRS heading to the client so that’s how you’re able to track it you know when you
receive this you know the check is chosen sure and that’s when they pay so they don’t pay anything up until they actually get the cash they do not pay bottom line Wonder trust anything until this letter is verified the check is on the method they transfer it into their bank account and they can really trust Wonder trust that the process has been ended up and the number of you believe you’ve processed given that you began this we have to do with 35 000 of these for
about six billion dollars wow so plainly they understand what they’re doing which’s what you require you require specialists on the other end of the phone to process this and get it to where you get one of these that’s what matters all right Mr Fantastic here you’re at my YouTube channel we’re discussing something really essential today the employee retention credit which most of you have never become aware of I certainly hadn’t heard of it till really recently and discovered a lot about it since this is probably the lowest cost of capital for any small company anywhere
anytime if you have employees 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 Ideas 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 simply call up your bank supervisor and say offer me a loan it does not 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’ve ended up being yes the Ambassador and paid representative for this I love this program it’s going away soon you got to discover all about it let’s talk worker retention credit Josh Fox what is an ERC let’s just begin there so throughout the Trump Administration when President Trump was enacted they developed the cares Act and the cares act provided 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 cash payroll tax refund fine go on sorry I just have to make certain we got that point I mean that’s a huge distinction a loan versus money cash I like cash cash that’s what we’re discussing all right 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 beautiful difficult check in the mail where you get real cash from the IRS all right so let’s speak about how it works because it seems like to me if it’s a if it’s employee retention credit that individual needed to be a staff member so I’m going to make the Presumption this cash is not for the owner not for people on the cap table not for shareholders it’s for staff members right you needed to have actually owned a company however it’s based on you having W-2 staff members in America not 10.99. so as long as you had W-2 staff members and you paid federal payroll taxes that’s why you would be eligible so you need 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 6 quarters the program was open well walk us through the six quarters so you had quarters two 3 and four of 2020 and you had quarters one two and three of 2021. alright 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 computation in 2020 to be precise Kevin is 50 of the staff member’s wage to an optimum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers escalated to 70 of the staff member’s wage to an optimum of 7 thousand per quarter how did that happen um they simply altered the rules in.
2021 versus due to the fact that 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 approximately five thousand Max and after that what takes place 21 000 Max in 2021 oh that’s how you develop twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty six thousand dollars per worker that is because that’s a great deal of money 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 minimize 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 state hypothetically you owned a restaurant 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 IRS so it’s huge undoubtedly now the huge concern is why does nobody learn about this since look when I initially found out about this when I first satisfied Josh you understand I have actually got lots of investments in lots of companies I’m a significant supporter for entrepreneurship in America and make lots of numerous investments in business owners of which lots of suffered through the pandemic when I first heard about this I called BS I don’t believe it since I utilize 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 used them wisely to survive throughout the pandemic so when I found out about this I said nah it can’t be true however when I dug around I even contacted us to my politician friends Guv Senators they didn’t know about it I mean that’s how you understand that’s how misinformation is that there’s no info out there then a lot of people informed me well you can’t get it since you took the PPP also not real so let’s ask Josh why does nobody learn about the employee retention credit you know what’s intriguing you’re discussing the banks Kevin due to the fact that in the PPP loan procedure the federal government made it very 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 procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s just process process that’s all um and here there was chaos because keep in mind in the initial cares act you might not do 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 refraining from 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 any person about how to.
do this does your CFO know how to do this not actually she or he’s never ever done it previously do the banks do it nope the banks do not do it the payroll companies yeah some of them are doing it as a payroll company your accounting professional no your accountant’s never done this prior to unless you have an account that entered into this company and bottom line my firm Kevin has been in business given that 2009 and we’ve been working with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 companies so a lot of our big huge business clients have actually dealt with bottom line to recuperate other government programs we have actually done sales tax and use tax unemployment tax work chance tax credits research and development tax credits unclaimed home property tax all of these other government programs.
The staff member 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 approximately $10,000 in incomes paid by an.
Because of COVID-19 or whose gross invoices, employer whose organization is fully or partially suspended.
decrease by more than 50%.
1. The credit is offered to all employers no matter size including tax exempt organizations. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) small.
services who take Small Business Loans.
2. To certify, the company has to satisfy one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s company is fully or partially suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross receipts are listed below 50% of the comparable quarter in 2019. When the.
employer’s gross receipts exceed 80% of a similar quarter in 2019 they no longer certify.
after the end of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the qualifying wages paid up to $10,000 in total.
It is effective for incomes paid after March 13th and prior to December 31, 2020.
The definition of qualifying earnings differs by whether an employer had, typically, more or less than.
100 staff members in 2019.
Business that specialize in ERC filing assistance usually offer knowledge and assistance to assist companies navigate the complicated process of claiming the credit. They can offer numerous services, consisting of:.
How is the employee retention credit calculated? Do Owner Wages Count For Employee Retention Credit
Eligibility Assessment: These companies will examine your business’s eligibility for the ERC based on elements such as your industry, profits, and operations. If you satisfy the requirements for the credit and determine the maximum credit quantity you can claim, they can assist identify.
Documents and Computation: ERC filing services will help in gathering the required paperwork, such as payroll records and monetary statements, to support your claim. They will also assist calculate the credit amount based on eligible incomes and other qualifying expenses.
Retroactive Claim Review: If you are qualified to claim the ERC for prior quarters, these business can review your previous payroll records and financials to recognize potential chances for retroactive credits. They can help you modify prior income tax return to claim these refunds.
Filing Support: Business focusing on ERC filings will prepare and send the essential kinds and documentation on your behalf. This consists of completing Type 941 or any other required tax return.
Compliance and Updates: ERC policies and assistance have actually progressed with time. These business stay upgraded with the latest modifications and make sure that your filings abide by the most present guidelines. They can also provide ongoing support if the IRS requests extra info or conducts an audit related to your ERC claim.
It’s important to research and veterinarian any business using ERC filing assistance to guarantee their trustworthiness and competence. Search for established firms with experience in tax and payroll services, or think about reaching out to trusted accounting firms or tax experts who offer ERC submitting support.
Bear in mind that while these business can supply valuable assistance, it’s always an excellent concept to have a standard understanding of the ERC requirements and process yourself. This will assist you make notified choices and make sure accurate filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief measures. The objective of the ERC is to encourage companies to retain and pay their staff members throughout the pandemic, even if their operations have actually been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to eligible companies, including for-profit services, tax-exempt organizations, and specific governmental entities. To certify, companies should satisfy one of two requirements:.
The business operations were completely or partially suspended due to a federal government order related to COVID-19.
The business experienced a substantial decrease in gross receipts. As mentioned earlier, for 2021, a substantial decrease is specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount is equal to a portion (up to 70%) of certified earnings paid to staff members, consisting of specific 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 got a Paycheck Defense Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 permits organizations to claim the ERC even if they got a PPP loan. However, the very same wages can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and improved, allowing eligible employers to declare the credit for qualified earnings paid as far back as March 13, 2020. This retroactive provision provides an opportunity for businesses to amend prior-year tax returns and get refunds.
Claiming the Credit: Companies can declare the ERC by reporting it on their work income tax return, generally Form 941. The excess can be refunded to the employer if the credit goes beyond the quantity of employment taxes owed.
It is very important to note that the ERC provisions and eligibility requirements have actually evolved with time. The best strategy is to seek advice from a tax professional or go to the main internal revenue service website for the most in-depth and current information relating to the ERC, including any current legal changes or updates.
To get approved for the ERC, a service must satisfy one of the following requirements:.
The business operations were completely or partly suspended due to a federal government order related to COVID-19.
Business experienced a substantial decline in gross receipts. For 2021, a substantial decline is specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decline is defined as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the instantly preceding quarter.
The ERC is available to businesses of all sizes, consisting of tax-exempt organizations, however there are some exceptions. For instance, government entities and organizations that got a PPP loan may have constraints on declaring the credit.
The process for claiming the ERC involves finishing the needed kinds and including the credit on your employment income tax return (typically Type 941). The exact time it requires to process the credit can vary based upon a number of factors, consisting of the complexity of your company and the work of the internal revenue service. It’s advised to seek advice from a tax professional for guidance specific to your scenario.
There are several business that can help with the process of claiming the ERC. Some widely known companies that offer support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the details offered here is based upon general knowledge and might not reflect the most current updates or modifications to the ERC. It is very important to consult with a tax professional or check out the official IRS site for the most accurate and current details regarding eligibility, claiming procedures, and offered support.
Less than 100. If the company had 100 or less workers typically in 2019, then the credit is based.
on wages paid to all employees whether they in fact worked or not. In other words, even if the.
workers worked full-time and made money for full time work, the employer still gets the credit.
Greater than 100. If the employer had more than 100 staff members typically in 2019, then the credit is.
allowed just for wages paid to staff members who did not work during the calendar quarter.
In both cases, “earnings” includes not simply cash payments however also a portion of the cost of company.
provided health care. Do Owner Wages Count For Employee Retention Credit
Employers can be right away repaid for the credit by minimizing the quantity of payroll taxes they.