Lets talk first about Do S-corp Owners Qualify For Employee Retention Credit :
Our group here what do these guys doing everybody in this space is helping teach individuals about ERC and uh constantly provide a beautiful breakfast and have individuals actually learn more about the program we need to head to the space where we are able to show a few of the checks that we are getting for business and I wish to see that what is this this is uh numerous countless dollars actually Kevin numerous millions of dollars so these are replicate copies of the letters that go to customers confirming that the check is on the method I mean you know if you just start to take a look at a few of these here I imply this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s simply I suggest consider 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 IRS heading to the customer so that’s how you have the ability to track it you understand when you
receive this you know the check is opted for sure and that’s when they pay so they do not pay anything till they really receive the cash they do not 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 really rely on Wonder trust that the procedure has been ended up and the number of you think you’ve processed since you started this we have to do with 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 require professionals 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 Terrific here you’re at my YouTube channel we’re talking about something actually important today the worker retention credit which the majority of you have never become aware of I definitely hadn’t become aware of it till extremely just recently and found out a lot about it due to the fact that this is probably the most affordable expense of capital for any small business anywhere
anytime if you have staff members in between five and five hundred so I have actually got the specialist with me this is Josh Fox he’s the founder 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 simply call your bank manager 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 all of us about it and how to get it and why I’ve become yes the Ambassador and paid spokesperson for this I love this program it’s going away very soon you got to learn everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just start there so throughout the Trump Administration when President Trump was enacted they created 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 nearly everyone 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.
remedy the cash money payroll tax refund fine go on sorry I simply need to make sure we got that point I mean that’s a huge difference a loan versus cash money I like money money that’s what we’re talking about fine 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 lovely hard check in the mail where you get actual money from the IRS all right so let’s speak about how it works because it seems like to me if it’s a if it’s employee retention credit that person needed to be an employee so I’m going to make the Assumption this cash is not for the owner not for people on the cap table not for shareholders it’s for staff members right you had to have owned an organization but it’s based on you having W-2 staff members in America not 10.99. As long as you had W-2 workers 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 have to be on payroll for the first six months of 2021 on the W-2 proper 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 two and three of 2021. fine so that’s how it’s determined you have to be on the W-2 during that period now let’s talk my favorite part money how much can you get back per worker 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 a maximum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the worker’s wage to a maximum of seven thousand per quarter how did that occur um they simply altered the rules in.
2021 versus because the mayhem of the pandemic so they wanted 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 as much as 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 6 thousand dollars per employee that is since that’s a lot of cash it is now there’s a caution here the PPP cash would have to be minimized 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 ten thousand dollars a person so let’s state hypothetically you owned a restaurant 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 obviously now the big concern is why does no one learn about this since appearance when I initially found out about this when I initially met Josh you understand I have actually got lots of investments in lots of companies I’m a significant advocate for entrepreneurship in America and make many many financial investments in entrepreneurs of which many suffered through the pandemic when I first became aware of this I called BS I do not believe it because I utilize 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 used them wisely to survive throughout the pandemic so when I became aware of this I said nah it can’t hold true but when I dug around I even contacted us to my politician friends Governor Senators they didn’t learn about it I suggest that’s how you know that’s how misinformation is that there’s no info 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 nobody understand about the staff member retention credit you understand what’s interesting you’re talking about the banks Kevin since in the PPP loan procedure 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 procedure 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 chaos since remember in the original cares act you might not do both programs so if you had done PPP you might 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 ever made it clear to anyone about how to.
do this does your CFO understand how to do this not really she or he’s never done it in the past 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 ever done this prior to unless you have an account that entered into this company and bottom line my firm Kevin has been in business because 2009 and we have actually been dealing with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 companies so a great deal of our huge big business customers have dealt with bottom line to recover other federal government programs we have actually done sales tax and use tax joblessness tax work chance tax credits research and development tax credits unclaimed home real estate tax all of these other government programs.
The staff member retention tax credit is a broad based refundable tax credit designed to motivate.
employers 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 receipts, company whose company is totally or partially suspended.
decline by more than 50%.
1. The credit is readily available to all employers despite size including tax exempt companies. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
companies who take Small company Loans.
2. To certify, the company has to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s business is fully or partially suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross receipts are listed below 50% of the equivalent quarter in 2019. Once the.
company’s gross receipts go above 80% of a comparable quarter in 2019 they no longer qualify.
after completion of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the qualifying wages paid up to $10,000 in total.
It works for salaries paid after March 13th and before December 31, 2020.
The definition of qualifying wages differs by whether an employer had, usually, basically than.
100 staff members in 2019.
Business that specialize in ERC filing assistance normally supply expertise and support to assist companies browse the complex procedure of declaring the credit. They can use different services, including:.
How is the employee retention credit calculated? Do S-corp Owners Qualify For Employee Retention Credit
Eligibility Assessment: These companies will evaluate your company’s eligibility for the ERC based upon elements such as your market, earnings, and operations. They can assist determine if you meet the requirements for the credit and identify the optimum credit amount you can claim.
Documentation and Estimation: ERC filing services will assist in collecting the essential documentation, such as payroll records and financial declarations, to support your claim. They will likewise assist calculate the credit amount based upon qualified earnings and other qualifying expenses.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for previous quarters, these companies can evaluate your previous payroll records and financials to identify possible chances for retroactive credits. They can assist you change previous income tax return to declare these refunds.
Filing Support: Companies specializing in ERC filings will prepare and send the needed kinds and documents in your place. This consists of completing Kind 941 or any other required tax return.
Compliance and Updates: ERC policies and assistance have evolved in time. These business stay upgraded with the most recent changes and make sure that your filings abide by the most present standards. If the IRS requests extra details or carries out an audit associated to your ERC claim, they can also provide continuous support.
It’s important to research study and veterinarian any company using ERC filing assistance to ensure their credibility and knowledge. Search for established companies with experience in tax and payroll services, or think about reaching out to relied on accounting firms or tax professionals who provide ERC filing assistance.
Keep in mind that while these companies can supply valuable assistance, it’s constantly an excellent concept to have a fundamental understanding of the ERC requirements and process yourself. This will help you make notified choices 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 procedures. The goal of the ERC is to encourage businesses to retain and pay their employees during the pandemic, even if their operations have actually been affected.
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, companies should meet one of two criteria:.
The business operations were fully or partly suspended due to a federal government order related to COVID-19.
The business experienced a substantial decline in gross receipts. As mentioned earlier, for 2021, a considerable decrease is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decrease in gross invoices compared to the very 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 amount is equal to a portion (as much as 70%) of qualified wages paid to workers, consisting of particular health plan costs. 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 received an Income Security Program (PPP) loan were not eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 enables businesses to declare the ERC even if they got a PPP loan. However, the exact same earnings can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively broadened and boosted, enabling qualified companies to claim the credit for certified earnings paid as far back as March 13, 2020. This retroactive arrangement provides a chance for services to change prior-year income tax return and get refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their work income tax return, normally Type 941. The excess can be refunded to the employer if the credit goes beyond the quantity of work taxes owed.
It is essential to keep in mind that the ERC provisions and eligibility criteria have actually evolved gradually. The best course of action is to consult with a tax expert or check out the main IRS site for the most up-to-date and comprehensive info concerning the ERC, including any current legislative changes or updates.
To receive the ERC, a business should satisfy among the following requirements:.
Business operations were fully or partly suspended due to a federal government order related to COVID-19.
Business experienced a considerable decrease in gross invoices. For 2021, a considerable decrease is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decline in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
The ERC is offered to organizations of all sizes, including tax-exempt organizations, however there are some exceptions. Federal government entities and companies that received a PPP loan may have restrictions on declaring the credit.
The process for claiming the ERC involves completing the needed types and including the credit on your employment income tax return (typically Kind 941). The exact time it requires to process the credit can vary based upon several factors, including the intricacy of your service and the workload of the IRS. It’s suggested to consult with a tax expert for guidance specific to your circumstance.
There are a number of business that can aid with the process of claiming the ERC. These include accounting companies, tax advisory services, and payroll company. Some widely known companies that use support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research and contact these companies straight to inquire about their costs and services.
Please note that the details provided here is based on general knowledge and might not reflect the most recent updates or modifications to the ERC. It is essential to consult with a tax professional or go to the official internal revenue service site for the most precise and current info concerning eligibility, declaring treatments, and available support.
Less than 100. The credit is based if the company had 100 or fewer workers on average in 2019.
on salaries paid to all employees whether they really worked or not. In other words, even if the.
staff members worked full-time and earned money for full-time work, the company still gets the credit.
Greater than 100. If the company had more than 100 staff members on average in 2019, then the credit is.
enabled only for incomes paid to staff members who did not work during the calendar quarter.
In both cases, “wages” includes not just cash payments but also a portion of the cost of employer.
provided health care. Do S-corp Owners Qualify For Employee Retention Credit
Employers can be instantly reimbursed for the credit by reducing the amount of payroll taxes they.