Lets talk first about Employee Retention Credit For Self Employed :
Our group here what do these guys doing everyone in this space is helping teach people about ERC and uh always provide a gorgeous breakfast and have individuals really learn more about the program we ought to head to the space where we have the ability to display a few of the checks that we are getting for business and I ‘d like to see that what is this this is uh numerous millions of dollars actually Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to clients verifying that the check is on the way I mean you understand if you just begin to look at some of these here I suggest this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I mean it’s simply I mean consider how many actual customers 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 validated and the check is on the mail in the mail from the internal revenue service heading to the consumer so that’s how you’re able to track it you understand when you
get this you know the check is chosen sure which’s when they pay so they do not pay anything until they in fact get the cash they don’t 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 trust Wonder trust that the procedure has actually been finished and the number of you believe you’ve processed considering that you began this we’re about 35 000 of these for
about six billion dollars wow so clearly they understand what they’re doing and that’s what you require you need professionals 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 Wonderful here you’re at my YouTube channel we’re talking about something truly essential today the staff member retention credit which the majority of you have never become aware of I certainly had not heard of it up until extremely just recently and learned a lot about it because this is probably the lowest cost of capital for any small business anywhere
anytime if you have staff members between 5 and five hundred so I’ve got the professional 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 difficult this isn’t like PPP we just call your bank supervisor and state 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 disappearing very soon you got to learn all about it let’s talk worker retention credit Josh Fox what is an ERC let’s simply start there so during the Trump Administration when President Trump was enacted they created the cares Act and the cares act offered organizations three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everybody it makes a big difference right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
fix the money cash payroll tax refund fine go on sorry I simply need to ensure we got that point I indicate that’s a big difference a loan versus cash money I like money money that’s what we’re speaking about 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 gorgeous hard check in the mail where you get real money from the IRS 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 an employee so I’m going to make the Assumption this money is not for the owner not for individuals on the cap table not for shareholders it’s for employees right you needed to have actually owned an organization but it’s based upon you having W-2 employees in America not 10.99. so as long as you had W-2 employees and you paid federal payroll taxes that’s why you would be qualified so you need to be on payroll in 2020 on the W-2 and you have to be on payroll for the first 6 months of 2021 on the W-2 correct so there were six quarters the program was open well walk us through the six quarters so you had quarters two three and four of 2020 and you had quarters one 2 and three of 2021. okay so that’s how it’s measured you need to be on the W-2 throughout that period now let’s talk my favorite part money 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 specific Kevin is 50 of the employee’s income to a maximum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers skyrocketed 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 workers 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 happens 21 000 Max in 2021 oh that’s how you create twenty 6 thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per employee that is because that’s a lot of cash it is now there’s a caution here the PPP cash would have to be lowered 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 usually Kevin is if you took PPP money 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 workers and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s big clearly now the huge question is why does nobody know about this because appearance when I initially found out about this when I first satisfied Josh you understand I’ve got lots of financial investments in great deals of business I’m a significant advocate for entrepreneurship in America and make numerous many investments in entrepreneurs of which numerous suffered through the pandemic when I first heard about this I called BS I do not think it due to the fact that I utilize the PPP we went through the cash center Banks to get it it was very easy to do we had our CEOs call the banks they got their loans and that were well been worthy of and we utilized them wisely to survive throughout the pandemic so when I found out about this I said nah it can’t hold true but when I dug around I even contacted us to my political leader friends Guv Senators they didn’t learn about it I mean that’s how you understand that’s how false information is that there’s no details out there then a lot of individuals informed me well you can’t get it since you took the PPP also not real so let’s ask Josh why does no one understand about the staff member retention credit you know what’s fascinating you’re speaking about the banks Kevin due to the fact that in the PPP loan procedure the federal government made it really clear that if you desired a PPP loan you would call Wells Fargo Citibank Bank of America any of the big 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 chaos because remember in the original cares act you could refrain from doing both programs so if you had done PPP you might refrain from doing ERC in the original program and when they changed the law in 2021 the banks were refraining from doing ERC since it’s not alone so you’re getting a tax refund so the federal government never made it clear to anybody about how to.
do this does your CFO understand how to do this not actually he or she’s never ever done it before do the banks do it nope the banks don’t do it the payroll business 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 service and bottom line my firm Kevin has been in business because 2009 and we’ve been working with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 business so a great deal of our huge huge business clients have actually dealt with bottom line to recover other federal government programs we have actually done sales tax and utilize 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.
companies to keep workers on their payroll. The credit is 50% of up to $10,000 in incomes paid by an.
Because of COVID-19 or whose gross invoices, company whose organization is totally or partly suspended.
decline by more than 50%.
1. The credit is offered to all companies no matter size consisting of tax exempt companies. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) small.
companies who take Small company Loans.
2. To certify, the employer has to fulfill one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s business is completely or partly suspended by government order due to COVID-19.
during the calendar quarter or.
o the company’s gross receipts are below 50% of the equivalent quarter in 2019. As soon as the.
company’s gross receipts exceed 80% of a comparable quarter in 2019 they no longer certify.
after completion of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the certifying earnings paid up to $10,000 in overall.
It works for incomes paid after March 13th and before December 31, 2020.
The definition of qualifying salaries varies by whether an employer had, typically, more or less than.
100 workers in 2019.
Companies that specialize in ERC filing help usually provide expertise and assistance to help businesses navigate the complex procedure of claiming the credit. They can use various services, including:.
How is the employee retention credit calculated? Employee Retention Credit For Self Employed
Eligibility Assessment: These business will evaluate your company’s eligibility for the ERC based on elements such as your industry, earnings, and operations. They can assist figure out if you satisfy the requirements for the credit and recognize the maximum credit quantity you can claim.
Paperwork and Calculation: ERC filing services will assist in collecting the needed documentation, such as payroll records and monetary declarations, to support your claim. They will likewise help compute the credit amount based upon qualified incomes and other certifying costs.
Retroactive Claim Review: If you are qualified to declare the ERC for prior quarters, these business can examine your previous payroll records and financials to recognize prospective opportunities for retroactive credits. They can help you modify prior tax returns to claim these refunds.
Filing Assistance: Business concentrating on ERC filings will prepare and submit the essential kinds and paperwork on your behalf. This includes completing 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 make sure that your filings adhere to the most existing guidelines. If the Internal revenue service demands additional details or performs an audit associated to your ERC claim, they can likewise offer ongoing support.
It is very important to research study and veterinarian any company providing ERC filing assistance to ensure their reliability and know-how. Look for established firms with experience in tax and payroll services, or consider reaching out to relied on accounting firms or tax experts who provide ERC submitting assistance.
Remember that while these companies can offer valuable assistance, it’s constantly a good idea to have a fundamental understanding of the ERC requirements and procedure yourself. This will help you make notified choices and make sure precise filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief procedures. The goal of the ERC is to encourage services to retain and pay their workers throughout the pandemic, even if their operations have actually been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to eligible companies, including for-profit services, tax-exempt companies, and specific governmental entities. To certify, companies must satisfy one of two criteria:.
Business operations were fully or partly suspended due to a government order related to COVID-19.
The business experienced a substantial decrease in gross receipts. As discussed earlier, for 2021, a significant decline is defined as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decline in gross receipts 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 (approximately 70%) of qualified incomes paid to employees, consisting of particular health plan costs. 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, businesses that got a Paycheck Defense Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 allows businesses to declare the ERC even if they received a PPP loan. However, the very same earnings can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and boosted, allowing qualified companies to declare the credit for certified wages paid as far back as March 13, 2020. This retroactive provision offers a chance for organizations to amend prior-year tax returns and get refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their employment income tax return, generally Form 941. The excess can be reimbursed to the company if the credit surpasses the amount of work taxes owed.
It is very important to keep in mind that the ERC arrangements and eligibility requirements have evolved with time. The very best course of action is to seek advice from a tax professional or check out the official internal revenue service site for the most comprehensive and updated info relating to the ERC, consisting of any recent legislative modifications or updates.
To get approved for the ERC, a service must fulfill one of the following criteria:.
Business operations were totally or partly suspended due to a government order related to COVID-19.
The business experienced a substantial decrease in gross invoices. For 2021, a substantial decrease is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decrease is specified as a 20% decline in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the immediately preceding quarter.
The ERC is readily available to services of all sizes, consisting of tax-exempt companies, however there are some exceptions. For example, federal government entities and organizations that got a PPP loan may have limitations on declaring the credit.
The procedure for declaring the ERC includes finishing the necessary kinds and including the credit on your employment tax return (usually Form 941). The exact time it requires to process the credit can differ based upon several aspects, including the complexity of your company and the work of the internal revenue service. It’s advised to speak with a tax professional for guidance specific to your scenario.
There are numerous companies that can aid with the procedure of claiming the ERC. These consist of accounting companies, tax advisory services, and payroll service providers. Some widely known business that use support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research study and contact these companies straight to inquire about their services and fees.
Please note that the details offered here is based on basic knowledge and might not show the most recent updates or changes to the ERC. It’s important to seek advice from a tax expert or visit the official internal revenue service site for the most precise and up-to-date info concerning eligibility, claiming procedures, and offered assistance.
Less than 100. If the employer had 100 or fewer employees on average in 2019, then the credit is based.
on incomes paid to all staff members whether they actually worked or not. In other words, even if the.
staff members worked full time and made money for full-time work, the company still gets the credit.
Greater than 100. The credit is if the company had more than 100 workers on average in 2019.
permitted just for incomes paid to employees who did not work throughout the calendar quarter.
In both cases, “earnings” includes not simply money payments but likewise a portion of the expense of company.
supplied healthcare. Employee Retention Credit For Self Employed
Employers can be instantly reimbursed for the credit by decreasing the amount of payroll taxes they.