Lets talk first about S Corp Shareholder Employee Retention Credit :
Our team here what do these guys doing everybody in this space is assisting teach people about ERC and uh always offer a gorgeous breakfast and have individuals really find out about the program we need to head to the space where we have the ability to display some of the checks that we are getting for companies and I ‘d like to see that what is this this is uh hundreds of countless dollars actually Kevin hundreds of countless dollars so these are duplicate copies of the letters that go to customers verifying that the check is on the way I indicate you understand if you just begin to look at a few of these here I mean this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s simply I mean consider the number of real clients that went through the program yeah this is the very end this is the party at the end when the check is validated the numbers are confirmed 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 know when you
receive this you understand the check is gone for sure which’s when they pay so they do not pay anything up until they in fact receive the money they don’t pay bottom line Wonder trust anything up until this letter is validated the check is on the way they transfer it into their checking account and they can truly trust Wonder trust that the process has actually been finished and how many you think you have actually processed considering that 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 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 Fantastic here you’re at my YouTube channel we’re discussing something actually essential today the staff member retention credit which most of you have actually never ever become aware of I certainly had not become aware of it up until very recently and found out a lot about it because this is probably the lowest cost of capital for any small business anywhere
anytime if you have workers in between 5 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 Concepts they’re the largest processor of these ERC credits this is a 170 page program so it’s hard this isn’t like PPP we simply contact your bank supervisor and say offer 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 become yes the Ambassador and paid spokesperson for this I like this program it’s disappearing soon you got to learn all about it let’s talk employee 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 companies three opportunities 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.
remedy the money cash payroll tax refund alright go on sorry I just need to ensure we got that point I imply that’s a big distinction a loan versus money cash I like cash cash 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 gorgeous tough check in the mail where you get real money from the IRS all right so let’s talk about how it works due to the fact that it sounds like to me if it’s a if it’s worker retention credit that person needed to be a worker so I’m going to make the Presumption this money is not for the owner not for individuals on the cap table not for investors it’s for workers right you had to have actually owned a business however it’s based upon you having W-2 workers 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 need to be on payroll in 2020 on the W-2 and you need to be on payroll for the first six 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 two and three of 2021. all right so that’s how it’s measured you have to be on the W-2 during that period now let’s talk my favorite part cash how much can you get back per employee that was on a W-2 in those six quarters so the calculation in 2020 to be exact Kevin is 50 of the worker’s salary to an optimum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers increased to 70 of the worker’s income to a maximum of 7 thousand per quarter how did that happen um they just altered the rules in.
2021 versus due to the fact that the mayhem of the pandemic so they wished to even get more to keep those employees 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 occurs 21 000 Max in 2021 oh that’s how you create twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty six thousand dollars per staff member that is since that’s a great deal of cash it is now there’s a caveat here the PPP cash would need 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 typically Kevin is if you took PPP cash someplace around ten thousand dollars an individual so let’s state hypothetically you owned a restaurant in New York City where I’m from and you had a hundred employees and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s substantial certainly now the huge question is why does no one know about this due to the fact that look when I initially became aware of this when I initially fulfilled Josh you know I have actually got lots of investments in lots of business I’m a significant supporter for entrepreneurship in America and make lots of lots of investments in entrepreneurs of which many suffered through the pandemic when I initially found out about this I called BS I do not believe it since 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 and that were well should have and we utilized them wisely to survive throughout the pandemic so when I found out about this I stated 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 suggest that’s how you understand that’s how false information is that there’s no information out there then a bunch of individuals informed me well you can’t get it since you took the PPP likewise not true so let’s ask Josh why does nobody learn about the employee retention credit you know what’s fascinating you’re speaking about the banks Kevin because 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 country and they would process process in Canada a pre-pp loan there’s no loans in Canada by the way it’s just process process that’s all um and here there was chaos due to the fact that keep in mind in the initial cares act you might not do both programs so if you had done PPP you could refrain from doing ERC in the initial program and when they altered the law in 2021 the banks were refraining from doing ERC because it’s not alone so you’re getting a tax refund so the federal government never ever made it clear to anybody about how to.
do this does your CFO understand how to do this not actually she or he’s never done it before 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 company your accounting professional no your accountant’s never ever done this before unless you have an account that entered into this service and bottom line my firm Kevin has been in business since 2009 and we have actually been working with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 companies so a great deal of our huge huge business clients have actually worked with bottom line to recuperate other government programs we have actually done sales tax and use tax unemployment tax work chance tax credits research and development tax credits unclaimed property real estate tax all of these other federal government programs.
The worker retention tax credit is a broad based refundable tax credit developed to encourage.
companies to keep employees 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 invoices, company whose company is totally or partly suspended.
decrease by more than 50%.
1. The credit is offered to all companies despite size consisting of tax exempt organizations. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) small.
companies who take Small company Loans.
2. To qualify, the employer needs to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s organization is completely or partly suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross invoices are listed below 50% of the comparable quarter in 2019. When the.
company’s gross invoices go above 80% of a comparable quarter in 2019 they no longer certify.
after completion of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the certifying incomes paid up to $10,000 in overall.
It works for incomes paid after March 13th and prior to December 31, 2020.
The meaning of qualifying earnings differs by whether a company had, typically, basically than.
100 staff members in 2019.
Companies that focus on ERC filing help typically offer knowledge and support to assist companies navigate the intricate procedure of declaring the credit. They can offer numerous services, including:.
How is the employee retention credit calculated? S Corp Shareholder Employee Retention Credit
Eligibility Evaluation: These companies will examine your company’s eligibility for the ERC based on elements such as your market, revenue, and operations. They can help figure out if you meet 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 paperwork, such as payroll records and financial declarations, to support your claim. They will also assist compute the credit amount based on qualified incomes and other certifying expenditures.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for previous quarters, these business can examine your past payroll records and financials to determine potential chances for retroactive credits. They can assist you modify previous income tax return to claim these refunds.
Filing Help: Business specializing in ERC filings will prepare and send the needed forms and documents in your place. This includes completing Type 941 or any other required tax return.
Compliance and Updates: ERC regulations and assistance have actually evolved gradually. These business remain upgraded with the current changes and make sure that your filings adhere to the most present standards. If the IRS requests extra info or performs an audit related to your ERC claim, they can likewise supply continuous support.
It is essential to research and vet any company using ERC filing assistance to ensure their trustworthiness and competence. Try to find recognized firms with experience in tax and payroll services, or think about connecting to trusted accounting firms or tax experts who use ERC submitting assistance.
Remember that while these companies can supply important assistance, it’s constantly a good idea to have a standard understanding of the ERC requirements and process yourself. This will help you make notified decisions and guarantee precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief measures. The objective of the ERC is to motivate organizations to maintain and pay their workers throughout the pandemic, even if their operations have been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is available to eligible employers, including for-profit businesses, tax-exempt organizations, and certain governmental entities. To certify, companies should satisfy one of two criteria:.
Business operations were fully or partially suspended due to a government order related to COVID-19.
Business experienced a considerable decline in gross invoices. As pointed out previously, for 2021, a substantial decrease is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decline in gross receipts compared to the very same quarter in 2019, or a 20% decline in gross receipts 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 amounts to a portion (as much as 70%) of certified salaries paid to workers, consisting of particular health insurance expenditures. The optimum 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 received an Income Security Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 allows companies to declare the ERC even if they received a PPP loan. Nevertheless, the exact same incomes can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and enhanced, enabling qualified companies to declare the credit for certified earnings paid as far back as March 13, 2020. This retroactive provision offers a chance for services to amend prior-year income tax return and receive refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their work income tax return, typically Kind 941. The excess can be refunded to the employer if the credit exceeds the amount of work taxes owed.
It is essential to keep in mind that the ERC arrangements and eligibility requirements have progressed with time. The very best course of action is to speak with a tax expert or go to the main internal revenue service website for the most in-depth and up-to-date info relating to the ERC, consisting of any recent legislative modifications or updates.
To get approved for the ERC, a service should meet one of the following criteria:.
The business operations were completely or partially suspended due to a government order related to COVID-19.
The business experienced a significant decline in gross receipts. For 2021, a significant decline is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
The ERC is readily available to businesses of all sizes, consisting of tax-exempt organizations, but there are some exceptions. Government entities and services that received a PPP loan might have limitations on claiming the credit.
The process for declaring the ERC includes finishing the required kinds and consisting of the credit on your employment income tax return (normally Form 941). The exact time it requires to process the credit can differ based upon a number of aspects, consisting of the intricacy of your business and the workload of the internal revenue service. It’s advised to consult with a tax professional for guidance particular to your circumstance.
There are several companies that can help with the process of claiming the ERC. Some well-known business that offer assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the details offered here is based on general knowledge and may not show the most current updates or modifications to the ERC. It is very important to talk to a tax expert or go to the main IRS website for the most updated and precise information regarding eligibility, claiming procedures, and readily available assistance.
Less than 100. The credit is based if the employer had 100 or fewer employees on average in 2019.
on earnings paid to all workers whether they actually worked or not. To put it simply, even if the.
staff members worked full-time and earned money for full time work, the company still gets the credit.
Greater than 100. The credit is if the employer had more than 100 employees on average in 2019.
allowed just for earnings paid to workers who did not work during the calendar quarter.
In both cases, “wages” consists of not simply money payments but likewise a portion of the expense of company.
supplied healthcare. S Corp Shareholder Employee Retention Credit
Employers can be immediately compensated for the credit by minimizing the quantity of payroll taxes they.