Lets talk first about Are Shareholders Eligible For Employee Retention Credit :
Our team here what do these guys doing everyone in this room is assisting teach individuals about ERC and uh constantly provide a gorgeous breakfast and have individuals truly find out about the program we must head to the space where we have the ability to display a few 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 millions of dollars so these are duplicate copies of the letters that go to customers confirming that the check is on the method I indicate you know if you simply begin to look at a few of these here I indicate this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s simply I imply think about the number of actual clients that went through the program yeah this is the very end this is the party at the end when the check is verified the numbers are confirmed and the check is on the mail in the mail from the internal revenue service heading to the client so that’s how you’re able to track it you know when you
get this you know the check is chosen sure and that’s when they pay so they do not pay anything up until they actually receive the money they don’t pay bottom line Wonder trust anything until this letter is validated the check is on the way they transfer it into their savings account and they can genuinely rely on Wonder trust that the procedure has been completed and the number of you think you have actually processed given that you started this we have to do with 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 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 Terrific here you’re at my YouTube channel we’re talking about something actually crucial today the employee retention credit which the majority of you have never become aware of I certainly hadn’t become aware of it till extremely just recently and discovered a lot about it due to the fact that this is probably the most affordable expense of capital for any small company anywhere
anytime if you have workers between 5 and five hundred so I’ve got the professional with me this is Josh Fox he’s the founder and CEO of bottom line Principles they’re the largest processor of these ERC credits this is a 170 page program so it’s hard this isn’t like PPP we just call up your bank manager and say offer 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’ve ended up being yes the Ambassador and paid spokesperson for this I love this program it’s disappearing 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 during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act provided companies 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everybody it makes a big difference 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 okay go on sorry I just need to ensure we got that point I suggest that’s a big difference a loan versus money cash I like cash money that’s what we’re discussing 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 original cares Act is the ERC and yes Kevin it is a beautiful hard check in the mail where you get actual money from the internal revenue service all right so let’s discuss how it works because it sounds like to me if it’s a if it’s staff member retention credit that person 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 shareholders it’s for employees right you needed to have owned an organization however it’s based upon you having W-2 staff members 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 need to be on payroll in 2020 on the W-2 and you need to be on payroll for the very first 6 months of 2021 on the W-2 correct so there were six quarters the program was open well stroll us through the 6 quarters so you had quarters 2 3 and 4 of 2020 and you had quarters one two and three of 2021. alright so that’s how it’s measured you need to be on the W-2 throughout that period now let’s talk my preferred part cash how much can you return per worker that was on a W-2 in those 6 quarters so the calculation in 2020 to be specific Kevin is 50 of the worker’s wage to an optimum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers increased to 70 of the employee’s income to a maximum of seven thousand per quarter how did that occur um they simply altered the rules in.
2021 versus due to the fact that the mayhem 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 five thousand Max and then what happens 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 6 thousand dollars per staff member 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 decreased from the twenty six 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 ten thousand dollars an individual so let’s state hypothetically you owned a dining establishment in New york city 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 obviously now the big concern is why does no one know about this due to the fact that appearance when I first heard about this when I first satisfied Josh you understand I’ve got lots of investments in great deals of companies I’m a significant advocate for entrepreneurship in America and make many many investments in business owners of which many suffered through the pandemic when I initially found out about this I called BS I don’t think it because I use 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 and that were well deserved and we used them wisely to survive during the pandemic so when I became aware of this I said nah it can’t be true but when I dug around I even called to my politician pals Governor Senators they didn’t understand about it I suggest that’s how you know that’s how false information is that there’s no info out there then a bunch of people told 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 no one know about the worker retention credit you know what’s interesting you’re speaking about the banks Kevin due to the fact that 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 huge 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 turmoil because remember in the original cares act you could not do both programs so if you had done PPP you could refrain from doing ERC in the initial 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 made it clear to anyone about how to.
do this does your CFO know how to do this not actually he or she’s never done it before do the banks do it nope the banks don’t 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 service and bottom line my firm Kevin has stayed in business considering that 2009 and we have actually been dealing with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 business so a lot of our huge huge business clients have actually worked with bottom line to recuperate other government programs we’ve done sales tax and utilize tax unemployment tax work opportunity tax credits research and development tax credits unclaimed home property tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit designed to motivate.
companies to keep workers on their payroll. The credit is 50% of up to $10,000 in earnings paid by an.
company whose service is totally or partially suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is offered to all companies despite size including tax exempt organizations. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
organizations who take Small Business Loans.
2. To qualify, the company has to fulfill one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s company is completely or partly suspended by government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross invoices are listed below 50% of the equivalent quarter in 2019. When the.
employer’s gross invoices exceed 80% of a comparable quarter in 2019 they no longer certify.
after the end of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the qualifying salaries paid up to $10,000 in total.
It is effective for earnings paid after March 13th and prior to December 31, 2020.
The definition of certifying salaries differs by whether an employer had, typically, basically than.
100 employees in 2019.
Companies that concentrate on ERC filing support generally offer knowledge and assistance to help services browse the complicated procedure of claiming the credit. They can provide numerous services, consisting of:.
How is the employee retention credit calculated? Are Shareholders Eligible For Employee Retention Credit
Eligibility Evaluation: These companies will examine your company’s eligibility for the ERC based on factors such as your market, profits, and operations. They can help determine if you satisfy the requirements for the credit and recognize the optimum credit quantity you can declare.
Paperwork and Calculation: ERC filing services will help in collecting the essential paperwork, such as payroll records and monetary statements, to support your claim. They will likewise assist calculate the credit amount based upon eligible salaries and other qualifying expenditures.
Retroactive Claim Review: If you are eligible to declare the ERC for previous quarters, these companies can examine your past payroll records and financials to identify prospective chances for retroactive credits. They can assist you change previous tax returns to declare these refunds.
Filing Assistance: Business specializing in ERC filings will prepare and send the needed types and documents in your place. This consists of completing Kind 941 or any other required tax return.
Compliance and Updates: ERC guidelines and assistance have actually progressed with time. These business remain updated with the latest modifications and ensure that your filings abide by the most existing guidelines. If the Internal revenue service requests extra details or conducts an audit related to your ERC claim, they can also provide ongoing support.
It’s important to research study and vet any business providing ERC filing assistance to ensure their reliability and know-how. Look for recognized firms with experience in tax and payroll services, or consider connecting to trusted accounting firms or tax professionals who offer ERC submitting support.
Remember that while these business can offer valuable support, it’s constantly a good concept to have a standard understanding of the ERC requirements and process yourself. This will help you make notified decisions and make sure precise filings.
The Worker Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief procedures. The objective of the ERC is to motivate companies to keep and pay their employees during the pandemic, even if their operations have actually been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to eligible companies, consisting of for-profit businesses, tax-exempt organizations, and specific governmental entities. To qualify, companies should meet one of two requirements:.
The business operations were completely or partly suspended due to a federal government order related to COVID-19.
The business experienced a significant decline in gross receipts. As mentioned previously, for 2021, a substantial decline is specified as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decrease 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 amount amounts to a portion (approximately 70%) of qualified incomes paid to employees, including certain health plan expenses. The maximum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, services that got a Paycheck Security Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 allows organizations to declare the ERC even if they got a PPP loan. The very same incomes can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively expanded and boosted, enabling eligible employers to declare the credit for certified salaries paid as far back as March 13, 2020. This retroactive arrangement provides a chance for companies to change prior-year income tax return and receive refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their employment income tax return, normally Type 941. If the credit surpasses the quantity of work taxes owed, the excess can be refunded to the company.
It’s important to keep in mind that the ERC provisions and eligibility requirements have actually developed gradually. The very best strategy is to talk to a tax expert or check out the official internal revenue service site for the most current and in-depth info regarding the ERC, including any current legal modifications or updates.
To receive the ERC, a service should meet one of the following criteria:.
Business operations were completely or partly suspended due to a federal government order related to COVID-19.
Business experienced a considerable decrease in gross receipts. For 2021, a significant decrease is defined as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decline in gross invoices compared to the instantly preceding quarter.
The ERC is readily available to organizations of all sizes, including tax-exempt companies, but there are some exceptions. For example, government entities and organizations that got a PPP loan may have restrictions on claiming the credit.
The process for claiming the ERC involves finishing the essential forms and consisting of the credit on your work tax return (generally Kind 941). The exact time it requires to process the credit can differ based upon a number of aspects, including the complexity of your business 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 companies that can assist with the process of declaring the ERC. Some well-known companies that provide assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the info offered here is based on basic understanding and might not reflect the most recent updates or modifications to the ERC. It is essential to speak with a tax expert or visit the official internal revenue service site for the most accurate and current info concerning eligibility, declaring treatments, and available assistance.
Less than 100. If the employer had 100 or less workers usually in 2019, then the credit is based.
on incomes paid to all employees whether they really worked or not. Simply put, even if the.
workers 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 employees on average in 2019, then the credit is.
enabled only for wages paid to staff members who did not work during the calendar quarter.
In both cases, “earnings” consists of not just cash payments however likewise a portion of the expense of employer.
provided health care. Are Shareholders Eligible For Employee Retention Credit
Companies can be right away repaid for the credit by lowering the quantity of payroll taxes they.