Lets talk first about Do S Corp Owner Wages Qualify For Employee Retention Credit :
Our team here what do these guys doing everybody in this space is helping teach people about ERC and uh always offer a gorgeous breakfast and have people really learn more about the program we must head to the room where we are able to display some of the checks that we are getting for business and I want to see that what is this this is uh numerous countless dollars literally Kevin hundreds of millions of dollars so these are duplicate copies of the letters that go to clients verifying that the check is on the way I suggest you know if you just start 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 suggest it’s just I mean think of 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 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
receive this you know the check is gone for sure and that’s when they pay so they don’t pay anything till they really get the money they do not pay bottom line Wonder trust anything till this letter is confirmed the check is on the way they transfer it into their bank account and they can truly rely on Wonder trust that the process has been completed and how many you think you have actually processed because you started this we have to do with 35 000 of these for
about six billion dollars wow so plainly they know what they’re doing and that’s what you need 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 Wonderful here you’re at my YouTube channel we’re speaking about something really important today the staff member retention credit which most of you have never become aware of I certainly hadn’t heard of it until very recently and discovered a lot about it since this is most likely the most affordable cost of capital for any small business anywhere
anytime if you have employees in between five and five hundred so I’ve got the professional 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 challenging this isn’t like PPP we simply call up your bank manager and say provide 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 representative for this I love this program it’s going away very soon you got to discover all about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply begin there so during the Trump Administration when President Trump was enacted they created the cares Act and the cares act used companies 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody it makes a huge distinction right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the money cash payroll tax refund all right go on sorry I simply have to ensure we got that point I mean that’s a big 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 stunning tough check in the mail where you get real cash from the IRS all right so let’s discuss how it works due to the fact that it seems like to me if it’s a if it’s staff member retention credit that individual had 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 investors it’s for workers right you had to have actually owned a business but it’s based on 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 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 6 quarters the program was open well stroll us through the 6 quarters so you had quarters two 3 and 4 of 2020 and you had quarters one two and three of 2021. okay so that’s how it’s measured you need to be on the W-2 throughout that duration now let’s talk my preferred part money just how much can you return per employee that was on a W-2 in those 6 quarters so the computation in 2020 to be specific Kevin is 50 of the worker’s wage to an optimum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s income to a maximum of seven thousand per quarter how did that take place um they simply changed the rules in.
2021 versus because the chaos 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 happens 21 000 Max in 2021 oh that’s how you create 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 because that’s a great deal of cash it is now there’s a caution here the PPP money 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 money someplace around 10 thousand dollars an individual so let’s say 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 money you would still get a million dollar in the mail from the internal revenue service so it’s substantial undoubtedly now the big concern is why does nobody learn about this due to the fact that look when I first found out about this when I first fulfilled Josh you understand I’ve got great deals of investments in lots of companies 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 initially 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 and that were well should have and we used them wisely to survive during the pandemic so when I found out about this I said nah it can’t be true but when I dug around I even called to my politician buddies Guv Senators they didn’t learn about it I imply that’s how you know that’s how misinformation is that there’s no info out there then a bunch of individuals 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 know about the employee retention credit you understand what’s interesting you’re speaking about the banks Kevin since in the PPP loan process the federal government made it extremely clear that if you desired a PPP loan you would call Wells Fargo Citibank Bank of America any of the big banks in our country and they would process process in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply process process that’s all um and here there was turmoil due to the fact that keep in mind in the original cares act you might not do both programs so if you had actually done PPP you could refrain from doing ERC in the original program and when they altered the law in 2021 the banks were not doing ERC since it’s not alone so you’re getting a tax refund so the government never ever made it clear to anyone about how to.
do this does your CFO understand 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 accounting professional’s never done this prior to unless you have an account that went into this service and bottom line my company Kevin has stayed in business considering that 2009 and we’ve been working with the federal government and the state federal government to recuperate cash for Fortune 500 Fortune 1000 companies so a great deal of our big huge corporate customers have dealt with bottom line to recover other federal government programs we’ve done sales tax and use tax unemployment tax work chance tax credits research and development tax credits unclaimed home real estate tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit developed to encourage.
companies to keep staff members on their payroll. The credit is 50% of as much as $10,000 in earnings paid by an.
Due to the fact that of COVID-19 or whose gross receipts, employer whose service is completely or partially suspended.
decrease by more than 50%.
1. The credit is readily available to all employers regardless of size consisting of tax exempt organizations. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) small.
organizations who take Small company Loans.
2. To certify, the company needs to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s business is completely or partially suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross receipts are below 50% of the comparable quarter in 2019. Once the.
employer’s gross receipts exceed 80% of a comparable quarter in 2019 they no longer certify.
after the end of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the certifying incomes paid up to $10,000 in overall.
It works for wages paid after March 13th and before December 31, 2020.
The definition of certifying incomes varies by whether a company had, on average, basically than.
100 workers in 2019.
Companies that specialize in ERC filing help normally offer proficiency and assistance to assist services browse the complicated process of claiming the credit. They can provide various services, consisting of:.
How is the employee retention credit calculated? Do S Corp Owner Wages Qualify For Employee Retention Credit
Eligibility Evaluation: These business will examine your company’s eligibility for the ERC based on elements such as your market, profits, and operations. They can help figure out if you satisfy the requirements for the credit and determine the maximum credit amount you can claim.
Documentation and Estimation: ERC filing services will help in collecting the essential documentation, such as payroll records and monetary statements, to support your claim. They will likewise assist determine the credit amount based upon eligible earnings and other certifying expenses.
Retroactive Claim Review: If you are qualified to declare the ERC for previous quarters, these companies can review your past payroll records and financials to recognize possible opportunities for retroactive credits. They can help you modify prior income tax return to declare these refunds.
Filing Support: Companies concentrating on ERC filings will prepare and send the necessary kinds and documentation on your behalf. This includes completing Kind 941 or any other required tax return.
Compliance and Updates: ERC policies and guidance have evolved with time. These companies stay upgraded with the most recent changes and ensure that your filings abide by the most existing standards. They can likewise supply continuous support if the internal revenue service demands additional info or conducts an audit related to your ERC claim.
It’s important to research study and vet any business using ERC filing assistance to ensure their trustworthiness and expertise. Try to find recognized firms with experience in tax and payroll services, or consider connecting to relied on accounting firms or tax experts who provide ERC submitting assistance.
Remember that while these companies can offer important support, it’s always a great concept to have a standard understanding of the ERC requirements and procedure yourself. This will help you make notified decisions and guarantee precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief procedures. The objective of the ERC is to encourage companies to retain and pay their staff members throughout the pandemic, even if their operations have been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to qualified companies, consisting of for-profit organizations, tax-exempt companies, and certain governmental entities. To qualify, employers should satisfy one of two requirements:.
Business operations were totally or partially suspended due to a federal government order related to COVID-19.
Business experienced a considerable decrease in gross invoices. As mentioned earlier, for 2021, a considerable decline is specified as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decline in gross receipts compared to the exact same quarter in 2019, or a 20% decline in gross invoices compared to the immediately preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity amounts to a percentage (up to 70%) of certified salaries paid to workers, consisting of certain health insurance expenditures. The optimum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, companies that received a Paycheck Security Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 allows organizations to claim the ERC even if they got a PPP loan. The very same salaries can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and enhanced, enabling eligible employers to declare the credit for certified salaries paid as far back as March 13, 2020. This retroactive arrangement offers a chance for organizations to amend prior-year tax returns and receive refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their employment income tax return, typically Kind 941. The excess can be refunded to the employer if the credit goes beyond the amount of employment taxes owed.
It is very important to keep in mind that the ERC provisions and eligibility criteria have progressed over time. The very best course of action is to speak with a tax professional or check out the main internal revenue service website for the most in-depth and up-to-date info relating to 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 government order related to COVID-19.
The business experienced a significant decrease in gross invoices. For 2021, a significant decrease is specified as a 20% decline 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 receipts compared to the exact same quarter in 2019, or a 20% decline in gross receipts compared to the instantly preceding quarter.
The ERC is offered to services of all sizes, consisting of tax-exempt organizations, but there are some exceptions. Federal government entities and services that received a PPP loan might have restrictions on declaring the credit.
The procedure for declaring the ERC involves completing the necessary types and including the credit on your work income tax return (normally Type 941). The exact time it takes to process the credit can differ based upon several aspects, including the complexity of your organization and the workload of the internal revenue service. It’s recommended to speak with a tax expert for assistance specific to your scenario.
There are a number of business that can aid with the process of claiming the ERC. These consist of accounting companies, tax advisory services, and payroll service providers. Some well-known business that use help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research study and contact these companies straight to ask about their costs and services.
Please note that the information provided here is based on basic understanding and might not reflect the most recent updates or modifications to the ERC. It’s important to speak with a tax expert or check out the main internal revenue service website for the most up-to-date and accurate information relating to eligibility, claiming procedures, and available 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 staff members whether they really worked or not. To put it simply, even if the.
staff members worked full-time and got paid for full time work, the company still gets the credit.
Greater than 100. If the company had more than 100 workers typically in 2019, then the credit is.
enabled only for incomes paid to employees who did not work throughout the calendar quarter.
In both cases, “earnings” includes not just cash payments but likewise a portion of the expense of employer.
offered health care. Do S Corp Owner Wages Qualify For Employee Retention Credit
Employers can be immediately repaid for the credit by minimizing the amount of payroll taxes they.