Lets talk first about Are S Corp Owners Eligible For Employee Retention Credit :
Our team here what do these people doing everybody in this room is assisting teach individuals about ERC and uh constantly offer a lovely breakfast and have individuals really discover 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 hundreds of millions of dollars literally Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to customers confirming that the check is on the method I imply you know if you simply begin to look at a few of these here I indicate this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s simply I mean consider the number of real customers that went through the program yeah this is the very end this is the party at the end when the check is confirmed the numbers are validated and the check is on the mail in the mail from the internal revenue service heading to the client so that’s how you have the ability to track it you know when you
get this you know the check is opted for sure which’s when they pay so they do not pay anything up until they in fact receive 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 bank account and they can really rely on Wonder trust that the process has actually been ended up and the number of you think you’ve 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 which’s what you require you need experts 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 Fantastic here you’re at my YouTube channel we’re discussing something truly crucial today the employee retention credit which most of you have never heard of I certainly hadn’t heard of it up until really 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 five and five hundred so I’ve got the specialist with me this is Josh Fox he’s the founder and CEO of bottom line Principles 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 call up your bank manager and state give 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 have actually become yes the Ambassador and paid representative for this I love this program it’s going away very soon you got to learn everything about it let’s talk employee retention credit Josh Fox what is an ERC let’s just begin there so throughout the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act used businesses 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everyone it makes a big distinction right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the money cash payroll tax refund alright go on sorry I just have to make sure we got that point I suggest that’s a big distinction a loan versus money cash I like cash cash that’s what we’re talking about 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 initial cares Act is the ERC and yes Kevin it is a lovely difficult check in the mail where you get actual money from the internal revenue service all right so let’s talk about how it works because it sounds like to me if it’s a if it’s employee retention credit that person had to be an employee so I’m going to make the Presumption this money is not for the owner not for individuals on the cap table not for shareholders it’s for staff members right you had to have actually owned a service 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 need to be on payroll for the very first six months of 2021 on the W-2 proper so there were 6 quarters the program was open well walk us through the 6 quarters so you had quarters 2 3 and 4 of 2020 and you had quarters one two and 3 of 2021. alright so that’s how it’s determined you have to be on the W-2 during that period now let’s talk my preferred part money how much can you get back per worker that was on a W-2 in those 6 quarters so the calculation in 2020 to be exact Kevin is 50 of the staff member’s salary to an optimum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s wage to a maximum of seven thousand per quarter how did that occur um they simply altered the rules in.
2021 versus since 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 approximately 5 thousand Max and then what occurs 21 000 Max in 2021 oh that’s how you develop twenty 6 thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty 6 thousand dollars per staff member that is since that’s a lot of money it is now there’s a caution here the PPP money would have to be reduced from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would decrease the 26 000 so what we’re seeing on average Kevin is if you took PPP cash somewhere 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 employees and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s huge clearly now the big question is why does nobody know about this since look when I initially found out about this when I initially satisfied Josh you understand I have actually got great deals of financial investments in great deals of companies I’m a major advocate for entrepreneurship in America and make numerous numerous financial investments in entrepreneurs of which many suffered through the pandemic when I initially became aware of this I called BS I don’t think it because I use the PPP we went through the money center Banks to get it it was very easy to do we had our CEOs call the banks they got their loans which were well should have and we utilized them sensibly to survive throughout 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 politician good friends Guv Senators they didn’t learn about it I indicate that’s how you know that’s how false information is that there’s no information out there then a lot of people informed me well you can’t get it due to the fact that you took the PPP likewise not true so let’s ask Josh why does no one know about the worker retention credit you understand what’s fascinating you’re speaking about the banks Kevin since in the PPP loan procedure 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 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 not do ERC in the initial program and when they changed 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 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 ever done it in the past 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 company your accounting professional no your accounting professional’s never done this before unless you have an account that went into this organization and bottom line my firm Kevin has actually stayed in business considering that 2009 and we’ve been working with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 companies so a lot of our big big business customers have actually dealt with bottom line to recuperate 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 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.
companies to keep employees on their payroll. The credit is 50% of up to $10,000 in earnings paid by an.
Since of COVID-19 or whose gross receipts, employer whose business is completely or partially suspended.
decrease by more than 50%.
1. The credit is available to all employers regardless of size consisting of tax exempt companies. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
businesses who take Small Business Loans.
2. To certify, the company needs to satisfy one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s business is fully or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross receipts are listed below 50% of the similar quarter in 2019. When the.
employer’s gross invoices go above 80% of a comparable quarter in 2019 they no longer qualify.
after the end of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the certifying salaries paid up to $10,000 in total.
It is effective for earnings paid after March 13th and prior to December 31, 2020.
The meaning of qualifying salaries differs by whether a company had, usually, more or less than.
100 staff members in 2019.
Business that focus on ERC filing support usually provide know-how and assistance to assist businesses navigate the complex procedure of claiming the credit. They can provide different services, consisting of:.
How is the employee retention credit calculated? Are S Corp Owners Eligible For Employee Retention Credit
Eligibility Assessment: These companies will assess your organization’s eligibility for the ERC based upon factors such as your industry, profits, and operations. If you satisfy the requirements for the credit and recognize the optimum credit amount you can declare, they can help identify.
Documentation and Computation: ERC filing services will assist in gathering the necessary documents, such as payroll records and monetary declarations, to support your claim. They will likewise help calculate the credit amount based on qualified incomes and other certifying expenses.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for prior quarters, these companies can review your past payroll records and financials to recognize possible opportunities for retroactive credits. They can assist you change prior income tax return to claim these refunds.
Filing Support: Companies concentrating on ERC filings will prepare and submit the necessary types and documents in your place. This includes completing Form 941 or any other required tax return.
Compliance and Updates: ERC policies and assistance have developed over time. These business remain upgraded with the latest modifications and guarantee that your filings adhere to the most existing standards. They can also provide continuous support if the internal revenue service requests additional details or conducts an audit related to your ERC claim.
It is very important to research study and veterinarian any business offering ERC filing help to guarantee their trustworthiness and expertise. Try to find established companies with experience in tax and payroll services, or think about connecting to trusted accounting companies or tax experts who provide ERC submitting assistance.
Keep in mind that while these business can supply valuable help, it’s constantly a great concept to have a standard understanding of the ERC requirements and process yourself. This will help you make informed decisions and guarantee accurate filings.
The Staff Member 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 encourage organizations to keep and pay their workers during the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to qualified companies, consisting of for-profit businesses, tax-exempt organizations, and specific governmental entities. To qualify, employers must fulfill one of two criteria:.
Business operations were completely or partly suspended due to a government order related to COVID-19.
Business experienced a significant decline in gross invoices. As mentioned earlier, for 2021, a substantial decline is specified 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% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decline in gross receipts compared to the right away 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 earnings paid to staff members, including specific 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, organizations that received a Paycheck Defense Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 allows companies to declare the ERC even if they got a PPP loan. However, the exact same wages can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively broadened and improved, permitting qualified employers to claim the credit for qualified incomes paid as far back as March 13, 2020. This retroactive arrangement supplies an opportunity for organizations to modify prior-year tax returns and get refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their employment income tax return, normally Type 941. The excess can be reimbursed to the employer if the credit surpasses the amount of employment taxes owed.
It is essential to keep in mind that the ERC provisions and eligibility criteria have actually progressed in time. The very best strategy is to consult with a tax expert or check out the official IRS website for the most updated and in-depth details regarding the ERC, including any current legislative changes or updates.
To get approved for the ERC, a service needs to satisfy one of the following requirements:.
The business operations were completely or partially suspended due to a federal government order related to COVID-19.
The business experienced a considerable decline in gross invoices. For 2021, a substantial decline is specified as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decline in gross invoices compared to the immediately preceding quarter.
The ERC is readily available to organizations of all sizes, including tax-exempt companies, but there are some exceptions. Federal government entities and companies that got a PPP loan may have limitations on claiming the credit.
The process for claiming the ERC involves finishing the needed kinds and consisting of the credit on your employment tax return (generally Form 941). The exact time it requires to process the credit can vary based on several factors, including the intricacy of your company and the workload of the IRS. It’s advised to speak with a tax expert for assistance specific to your scenario.
There are several companies that can help with the process of declaring the ERC. These consist of accounting firms, tax advisory services, and payroll company. Some popular business that provide support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research and call these companies straight to ask about their services and fees.
Please keep in mind that the info provided here is based upon general knowledge and may not reflect the most recent updates or modifications to the ERC. It is essential to consult with a tax expert or visit the official internal revenue service site for the most accurate and current information regarding eligibility, declaring treatments, and available support.
Less than 100. If the company had 100 or fewer staff members on average in 2019, then the credit is based.
on earnings paid to all staff members whether they really worked or not. Simply put, even if the.
staff members worked full-time and got paid for full time work, the company still gets the credit.
Greater than 100. The credit is if the employer had more than 100 staff members on average in 2019.
permitted only for wages paid to workers who did not work throughout the calendar quarter.
In both cases, “incomes” includes not simply cash payments however also a part of the cost of company.
supplied healthcare. Are S Corp Owners Eligible For Employee Retention Credit
Employers can be instantly reimbursed for the credit by minimizing the amount of payroll taxes they.