Lets talk first about Employee Retention Credit 2020 Owner Wages :
Our team here what do these guys doing everybody in this room is helping teach individuals about ERC and uh constantly supply a stunning breakfast and have individuals truly learn about the program we should head to the space where we have the ability 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 numerous countless dollars actually Kevin hundreds of millions of dollars so these are duplicate copies of the letters that go to customers validating that the check is on the way I indicate you understand if you simply start to take a 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 indicate consider 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 confirmed the numbers are confirmed and the check is on the mail in the mail from the internal revenue service heading to the customer so that’s how you have the ability to track it you understand when you
get this you understand the check is opted for sure which’s when they pay so they do not pay anything until they actually get the money they don’t pay bottom line Wonder trust anything till this letter is validated the check is on the method they deposit it into their bank account and they can truly rely on Wonder trust that the process has been ended up and the number of you believe you have actually processed because you started this we have to do with 35 000 of these for
about 6 billion dollars wow so plainly they know what they’re doing which’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 Wonderful here you’re at my YouTube channel we’re discussing something actually important today the staff member retention credit which the majority of you have actually never ever become aware of I certainly hadn’t become aware of it until extremely just recently and found out a lot about it since this is probably the most affordable cost of capital for any small business anywhere
anytime if you have workers between five and five hundred so I have actually got the expert 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 difficult this isn’t like PPP we simply call up your bank manager and say provide me a loan it doesn’t 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 ended up being yes the Ambassador and paid spokesperson for this I love this program it’s disappearing very soon you got to find out 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 services 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everybody it makes a huge difference right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the money cash payroll tax refund alright go on sorry I simply need to make sure we got that point I suggest that’s a huge distinction a loan versus cash cash I like cash money that’s what we’re discussing 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 beautiful tough check in the mail where you get real cash from the internal revenue service all right so let’s discuss how it works because it seems like to me if it’s a if it’s employee retention credit that individual had to be a staff member so I’m going to make the Presumption 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 owned a service however it’s based on you having W-2 employees in America not 10.99. As long as you had W-2 employees 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 correct so there were six 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 measured you have to be on the W-2 throughout that duration now let’s talk my preferred part cash 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 precise Kevin is 50 of the staff member’s wage to a maximum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers escalated to 70 of the staff member’s wage to a maximum 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 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 up to 5 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 five thousand in twenty twenty that’s twenty 6 thousand dollars per staff member that is since that’s a lot of money it is now there’s a caution here the PPP money would need to be lowered from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would reduce the 26 000 so what we’re seeing on average Kevin is if you took PPP cash someplace around 10 thousand dollars an individual so let’s state hypothetically you owned a dining establishment 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 no one learn about this due to the fact that look when I first found out about this when I initially met Josh you understand I have actually got great deals of financial investments in great deals of companies I’m a major advocate for entrepreneurship in America and make many numerous investments in entrepreneurs of which many suffered through the pandemic when I initially heard about this I called BS I don’t think it because I utilize the PPP we went through the money center Banks to get it it was very easy to do we had our CEOs call the banks they got their loans which were well should have and we utilized them sensibly to stay alive during the pandemic so when I found out about this I said nah it can’t hold true however when I dug around I even contacted us to my political leader friends Governor Senators they didn’t understand about it I indicate that’s how you know that’s how misinformation is that there’s no details out there then a lot of individuals informed me well you can’t get it because you took the PPP likewise not true so let’s ask Josh why does nobody understand about the worker retention credit you know what’s interesting you’re discussing the banks Kevin due to the fact that in the PPP loan process 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 simply procedure process that’s all um and here there was mayhem because keep in mind in the original cares act you could not do both programs so if you had actually done PPP you might not do ERC in the initial program and when they altered 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 government never made it clear to anybody about how to.
do this does your CFO know how to do this not truly he or she’s never done it previously do the banks do it nope the banks don’t do it the payroll companies yeah some of them are doing it as a payroll business your accounting professional no your accounting professional’s never done this before unless you have an account that went into this company and bottom line my company Kevin has stayed in business because 2009 and we have actually been working with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 companies so a great deal of our huge big corporate clients have worked with bottom line to recover other federal government programs we have actually done sales tax and use 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.
employers to keep staff members on their payroll. The credit is 50% of up to $10,000 in earnings paid by an.
Because of COVID-19 or whose gross receipts, company whose organization is completely or partly suspended.
decrease by more than 50%.
1. The credit is offered to all companies regardless of size consisting of tax exempt organizations. There are.
just two exceptions: (1) state and city governments and their instrumentalities and (2) little.
businesses who take Small Business Loans.
2. To certify, the employer needs to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s organization is completely or partially suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross invoices are below 50% of the comparable quarter in 2019. When the.
employer’s gross receipts go above 80% of an equivalent quarter in 2019 they no longer certify.
after completion of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the certifying earnings paid up to $10,000 in total.
It is effective for salaries paid after March 13th and before December 31, 2020.
The definition of qualifying earnings differs by whether an employer had, on average, more or less than.
100 workers in 2019.
Companies that focus on ERC filing support usually supply proficiency and assistance to assist organizations browse the intricate procedure of claiming the credit. They can provide various services, including:.
How is the employee retention credit calculated? Employee Retention Credit 2020 Owner Wages
Eligibility Evaluation: These business will evaluate your business’s eligibility for the ERC based upon aspects such as your market, earnings, and operations. They can assist determine if you fulfill the requirements for the credit and determine the optimum credit quantity you can claim.
Paperwork and Computation: ERC filing services will assist in collecting the required documentation, such as payroll records and financial statements, to support your claim. They will also help compute the credit amount based upon qualified incomes and other certifying expenses.
Retroactive Claim Review: If you are qualified to declare the ERC for previous quarters, these business can evaluate your past payroll records and financials to recognize possible chances for retroactive credits. They can assist you amend prior income tax return to claim these refunds.
Filing Support: Companies focusing on ERC filings will prepare and submit the required kinds and documentation on your behalf. This consists of completing Type 941 or any other required tax forms.
Compliance and Updates: ERC policies and guidance have actually evolved with time. These business stay updated with the most recent modifications and make sure that your filings adhere to the most present standards. They can also provide continuous support if the internal revenue service requests extra information or performs an audit related to your ERC claim.
It’s important to research study and veterinarian any company offering ERC filing help to ensure their reliability and know-how. Try to find established companies with experience in tax and payroll services, or consider connecting to relied on accounting companies or tax specialists who offer ERC filing assistance.
Remember that while these companies can supply valuable assistance, it’s constantly an excellent concept to have a fundamental understanding of the ERC requirements and procedure yourself. This will assist you make informed decisions 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 steps. The goal of the ERC is to encourage businesses 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 qualified companies, including for-profit services, tax-exempt companies, and certain governmental entities. To certify, employers need to meet one of two criteria:.
The business operations were totally or partially suspended due to a government order related to COVID-19.
Business experienced a considerable decrease in gross receipts. As discussed earlier, for 2021, a substantial decline is defined as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decline in gross invoices 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 amount is equal to a percentage (up to 70%) of certified earnings paid to workers, including specific health plan expenses. The maximum credit per staff member 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 Defense Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 permits services to declare the ERC even if they got a PPP loan. The very same incomes can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively expanded and improved, allowing eligible employers to claim the credit for certified wages paid as far back as March 13, 2020. This retroactive arrangement offers an opportunity for companies to modify prior-year tax returns and receive refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their work tax returns, typically Form 941. If the credit exceeds the amount of employment taxes owed, the excess can be refunded to the employer.
It is essential to note that the ERC provisions and eligibility criteria have actually progressed with time. The best strategy is to consult with a tax expert or visit the official internal revenue service site for the most updated and comprehensive info concerning the ERC, including any recent legal modifications or updates.
To qualify for the ERC, a business should meet one of the following criteria:.
The business operations were completely or partly suspended due to a federal government order related to COVID-19.
The business experienced a substantial decrease in gross invoices. For 2021, a significant decline is defined as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the right away preceding quarter.
The ERC is available to services of all sizes, consisting of tax-exempt companies, however there are some exceptions. Government entities and businesses that received a PPP loan may have constraints on declaring the credit.
The process for claiming the ERC includes finishing the needed forms and consisting of the credit on your work income tax return (usually Type 941). The exact time it takes to process the credit can differ based on a number of elements, consisting of the intricacy of your organization and the work of the IRS. It’s advised to speak with a tax expert for guidance particular to your circumstance.
There are a number of business that can aid with the process of declaring the ERC. These consist of accounting firms, tax advisory services, and payroll provider. Some well-known business that offer help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research and call these companies straight to inquire about their services and costs.
Please note that the details provided here is based on basic understanding and might not show the most recent updates or changes to the ERC. It is necessary to speak with a tax professional or check out the official internal revenue service site for the most accurate and current info relating to eligibility, declaring treatments, and offered assistance.
Less than 100. The credit is based if the company had 100 or less workers on average in 2019.
on salaries paid to all employees whether they in fact worked or not. Simply put, even if the.
employees worked full-time and made money for full time work, the employer still gets the credit.
Greater than 100. If the company had more than 100 staff members on average in 2019, then the credit is.
allowed just for salaries paid to workers who did not work throughout the calendar quarter.
In both cases, “earnings” includes not simply money payments but also a portion of the cost of company.
offered health care. Employee Retention Credit 2020 Owner Wages
Employers can be immediately repaid for the credit by lowering the amount of payroll taxes they.