Lets talk first about Employee Retention Credit For Sole Proprietor :
Our group here what do these people doing everybody in this space is helping teach people about ERC and uh constantly provide a stunning breakfast and have individuals really learn more about the program we should head to the space where we have the ability to show a few 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 literally Kevin numerous countless dollars so these are duplicate copies of the letters that go to customers confirming that the check is on the method I mean you know if you simply start to take a 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 just I indicate think about the number of actual clients that went through the program yeah this is the very end this is the celebration at the end when the check is validated 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 which’s when they pay so they don’t pay anything till they actually receive the money they do not pay bottom line Wonder trust anything until this letter is validated the check is on the method they transfer it into their checking account and they can really 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’re about 35 000 of these for
about 6 billion dollars wow so plainly they understand what they’re doing and that’s what you require you need experts 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 speaking about something really important today the employee retention credit which the majority of you have never become aware of I definitely hadn’t become aware of it until extremely 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 five and five hundred so I have actually got the professional with me this is Josh Fox he’s the founder and CEO of bottom line Principles they’re the biggest 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 supervisor and state provide 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 have actually become yes the Ambassador and paid representative for this I enjoy this program it’s disappearing very soon you got to learn all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just start there so during the Trump Administration when President Trump was enacted they created the cares Act and the cares act offered services 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 huge difference right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
remedy the money cash payroll tax refund okay go on sorry I simply have to ensure we got that point I indicate that’s a huge difference a loan versus cash cash I like cash cash 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 gorgeous tough check in the mail where you get real cash 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 worker retention credit that person had to be an employee 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 had to have actually owned a service however it’s based upon 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 have 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 appropriate 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 two and three of 2021. alright 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 just how much can you return per employee that was on a W-2 in those 6 quarters so the calculation in 2020 to be exact Kevin is 50 of the employee’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 employee’s wage to an optimum of seven thousand per quarter how did that occur um they just changed 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 then 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 six thousand dollars per staff member that is since that’s a lot of cash it is now there’s a caveat 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 two you would decrease the 26 000 so what we’re seeing usually Kevin is if you took PPP cash someplace around 10 thousand dollars an individual so let’s say hypothetically you owned a restaurant 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 IRS so it’s huge obviously now the huge concern is why does no one learn about this since look when I initially heard about this when I first fulfilled Josh you understand I have actually got great deals of investments in lots of business I’m a major supporter for entrepreneurship in America and make lots of many investments in entrepreneurs of which numerous suffered through the pandemic when I first heard 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 really easy to do we had our CEOs call the banks they got their loans which were well been worthy of and we utilized them wisely to survive during the pandemic so when I heard about this I said nah it can’t hold true but when I dug around I even called to my political leader buddies Guv Senators they didn’t learn about it I imply that’s how you understand that’s how false information is that there’s no info out there then a lot of people informed 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 learn 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 procedure the federal government made it very 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 just procedure process that’s all um and here there was mayhem since remember in the initial cares act you might refrain from doing both programs so if you had actually done PPP you could not do ERC in the initial program and when they changed the law in 2021 the banks were not 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 know how to do this not truly she or he’s never done it before do the banks do it nope the banks do not do it the payroll business yeah some of them are doing it as a payroll business your accounting professional no your accounting professional’s never done this prior to unless you have an account that went into this company and bottom line my company Kevin has stayed in business considering that 2009 and we have actually been dealing with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 companies so a great deal of our big big corporate clients have actually worked with bottom line to recuperate other federal government programs we’ve done sales tax and use tax unemployment tax work chance tax credits research and development tax credits unclaimed property property tax all of these other federal government programs.
The staff member retention tax credit is a broad based refundable tax credit created to encourage.
companies to keep staff members on their payroll. The credit is 50% of approximately $10,000 in incomes paid by an.
Due to the fact that of COVID-19 or whose gross receipts, employer whose organization is totally or partially suspended.
decrease by more than 50%.
1. The credit is readily available to all companies despite size including tax exempt organizations. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) small.
services who take Small company Loans.
2. To certify, the employer has to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s service is completely or partially suspended by government order due to COVID-19.
during 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 a comparable 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 wages paid up to $10,000 in total.
It works for wages paid after March 13th and before December 31, 2020.
The definition of qualifying earnings varies by whether a company had, on average, more or less than.
100 workers in 2019.
Business that specialize in ERC filing help usually provide expertise and support to help services navigate the complicated process of declaring the credit. They can use various services, including:.
How is the employee retention credit calculated? Employee Retention Credit For Sole Proprietor
Eligibility Assessment: These business will assess your service’s eligibility for the ERC based upon elements such as your market, revenue, and operations. If you satisfy the requirements for the credit and identify the optimum credit quantity you can declare, they can help identify.
Documents and Computation: ERC filing services will assist in collecting the necessary documentation, such as payroll records and monetary statements, to support your claim. They will also assist compute the credit quantity based on qualified wages and other qualifying expenditures.
Retroactive Claim Review: If you are qualified to declare the ERC for previous quarters, these companies can examine your past payroll records and financials to determine potential chances for retroactive credits. They can assist you change prior income tax return to declare these refunds.
Filing Assistance: Business concentrating on ERC filings will prepare and submit the needed forms and documentation on your behalf. This consists of completing Type 941 or any other required tax forms.
Compliance and Updates: ERC guidelines and assistance have progressed in time. These companies stay updated with the most recent changes and ensure that your filings abide by the most existing standards. They can also provide continuous support if the IRS requests additional details or conducts an audit related to your ERC claim.
It is necessary to research study and vet any company offering ERC filing help to ensure their credibility and know-how. Try to find recognized firms with experience in tax and payroll services, or consider reaching out to trusted accounting companies or tax experts who use ERC filing assistance.
Remember that while these business can offer valuable help, it’s always a good idea to have a fundamental understanding of the ERC requirements and process yourself. This will assist you make notified decisions and make sure precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief measures. The goal of the ERC is to motivate organizations to retain and pay their employees 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 qualified employers, including for-profit companies, tax-exempt companies, and certain governmental entities. To certify, employers need to satisfy one of two requirements:.
The business operations were totally or partially suspended due to a federal government order related to COVID-19.
Business experienced a significant decrease in gross receipts. As mentioned earlier, for 2021, a significant decline is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decline in gross invoices 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 quantity is equal to a portion (as much as 70%) of qualified salaries paid to workers, consisting of specific health plan expenses. The maximum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, organizations that got a Paycheck Security Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 allows companies to claim the ERC even if they got a PPP loan. The very same wages can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and boosted, permitting eligible companies to claim the credit for qualified wages paid as far back as March 13, 2020. This retroactive arrangement offers a chance for companies to change prior-year income tax return and get refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their employment income tax return, generally Kind 941. If the credit goes beyond the quantity of employment taxes owed, the excess can be reimbursed to the company.
It is necessary to keep in mind that the ERC provisions and eligibility criteria have progressed gradually. The very best course of action is to talk to a tax expert or visit the main IRS site for the most updated and in-depth info regarding the ERC, consisting of any current legislative changes or updates.
To get approved for the ERC, a business must fulfill one of the following criteria:.
The business operations were fully or partly suspended due to a federal government order related to COVID-19.
The business experienced a considerable decrease in gross invoices. For 2021, a considerable decrease is defined as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
The ERC is available to organizations of all sizes, including tax-exempt companies, but there are some exceptions. For instance, government entities and organizations that received a PPP loan may have restrictions on claiming the credit.
The process for declaring the ERC includes finishing the required forms and including the credit on your employment tax return (generally Kind 941). The exact time it takes to process the credit can vary based on a number of aspects, including the intricacy of your organization and the workload of the internal revenue service. It’s suggested to seek advice from a tax professional for assistance particular to your scenario.
There are numerous companies that can help with the procedure of claiming the ERC. Some popular companies that use assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the info supplied here is based upon general understanding and may not show the most current updates or modifications to the ERC. It’s important to seek advice from a tax expert or check out the official internal revenue service website for the most up-to-date and precise information concerning eligibility, declaring treatments, and offered help.
Less than 100. The credit is based if the employer had 100 or less employees on average in 2019.
on salaries paid to all employees whether they in fact worked or not. In other words, even if the.
staff members worked full time and earned money for full time work, the employer 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 workers who did not work throughout the calendar quarter.
In both cases, “earnings” includes not just cash payments but likewise a part of the expense of employer.
offered healthcare. Employee Retention Credit For Sole Proprietor
Employers can be instantly repaid for the credit by minimizing the quantity of payroll taxes they.