Lets talk first about Can S Corp Owner Get Employee Retention Credit :
Our group here what do these guys doing everybody in this space is helping teach individuals about ERC and uh always provide a lovely breakfast and have individuals really learn about the program we should head to the room where we have the ability to display a few 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 actually Kevin numerous countless dollars so these are replicate copies of the letters that go to clients confirming that the check is on the way I mean you know if you simply 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 suggest it’s simply I mean think about how many real customers 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 client so that’s how you have the ability to track it you know when you
get this you understand 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 savings account and they can really rely on Wonder trust that the procedure has actually been completed and the number of you believe you have actually processed considering that you began this we have to do with 35 000 of these for
about six billion dollars wow so clearly they know what they’re doing which’s what you need you require 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 actually crucial today the worker retention credit which the majority of you have actually never heard of I certainly had not heard of it till very recently and discovered a lot about it because this is probably the most affordable expense of capital for any small business anywhere
anytime if you have workers 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 Ideas they’re the largest processor of these ERC credits this is a 170 page program so it’s not easy this isn’t like PPP we just call up your bank supervisor and say give me a loan it does not work there’s not a loan it’s an application and Josh is going to tell all of us about it and how to get it and why I’ve ended up being yes the Ambassador and paid representative for this I enjoy this program it’s disappearing very soon you got to learn everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply start there so during the Trump Administration when President Trump was enacted they created the cares Act and the cares act provided companies 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everybody 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 money money payroll tax refund all right go on sorry I just have to make certain we got that point I suggest that’s a big distinction a loan versus money money I like cash money that’s what we’re talking about okay 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 actual money from the internal revenue service all right so let’s speak about how it works due to the fact that it seems like to me if it’s a if it’s employee retention credit that person needed to be a worker 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 employees right you needed to have owned a company however it’s based upon you having W-2 workers in America not 10.99. As long as you had W-2 employees 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 6 months of 2021 on the W-2 appropriate so there were six quarters the program was open well walk us through the 6 quarters so you had quarters 2 3 and four of 2020 and you had quarters one two and 3 of 2021. fine so that’s how it’s measured you need to be on the W-2 during that duration now let’s talk my favorite part cash just how much can you return per employee that was on a W-2 in those six quarters so the calculation in 2020 to be precise Kevin is 50 of the worker’s wage to an optimum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers increased to 70 of the employee’s income to a maximum of 7 thousand per quarter how did that occur um they simply altered the rules in.
2021 versus because the chaos 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 up to five thousand Max and then what happens 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 because that’s a great deal of cash it is now there’s a caution here the PPP cash would have to be reduced from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would minimize the 26 000 so what we’re seeing usually Kevin is if you took PPP money someplace around ten thousand dollars a person so let’s say hypothetically you owned a dining establishment in New york city City where I’m from and you had a hundred employees and you took PPP money you would still get a million dollar in the mail from the internal revenue service so it’s huge undoubtedly now the huge concern is why does no one learn about this due to the fact that look when I first became aware of this when I initially met Josh you understand I have actually got lots of investments in lots of business I’m a significant supporter for entrepreneurship in America and make many numerous investments in business owners of which lots of suffered through the pandemic when I initially heard about this I called BS I do not think it due to the fact that 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 and that were well should have and we used them carefully to survive during the pandemic so when I heard about this I stated nah it can’t be true but when I dug around I even contacted us to my politician pals Guv Senators they didn’t understand about it I suggest that’s how you know that’s how misinformation is that there’s no info out there then a bunch 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 understand about the employee retention credit you understand what’s intriguing you’re discussing the banks Kevin due to the fact that 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 turmoil because keep in mind in the original cares act you could refrain from doing 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 due to the fact that it’s not alone so you’re getting a tax refund so the government never ever made it clear to any person about how to.
do this does your CFO understand how to do this not actually she or he’s never ever done it previously 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 business your accountant no your accounting professional’s never done this prior to unless you have an account that entered into this service and bottom line my firm Kevin has been in business since 2009 and we’ve been working with the federal government and the state government to recuperate money for Fortune 500 Fortune 1000 companies so a great deal of our huge huge corporate customers have dealt with bottom line to recover other federal government programs we’ve done sales tax and utilize tax joblessness tax work chance tax credits research and development tax credits unclaimed property real estate tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit developed to encourage.
employers to keep employees on their payroll. The credit is 50% of up to $10,000 in wages paid by an.
Because of COVID-19 or whose gross invoices, company whose business is fully or partly suspended.
decrease by more than 50%.
Availability.
1. The credit is readily available to all companies regardless of size including tax exempt organizations. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) little.
services who take Small Business Loans.
2. To certify, the employer has to meet one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s organization is fully or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross receipts are below 50% of the similar quarter in 2019. As soon as the.
employer’s gross receipts exceed 80% of a comparable quarter in 2019 they no longer certify.
after the end of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the certifying earnings paid up to $10,000 in overall.
It works for earnings paid after March 13th and before December 31, 2020.
The meaning of certifying earnings varies by whether an employer had, on average, more or less than.
100 employees in 2019.
Business that concentrate on ERC filing help generally offer competence and support to assist businesses browse the intricate process of declaring the credit. They can use numerous services, including:.
How is the employee retention credit calculated? Can S Corp Owner Get Employee Retention Credit
Eligibility Evaluation: These companies will evaluate your business’s eligibility for the ERC based on aspects such as your industry, income, and operations. If you fulfill the requirements for the credit and recognize the optimum credit quantity you can declare, they can assist identify.
Documents and Calculation: ERC filing services will assist in gathering the needed documentation, such as payroll records and monetary declarations, to support your claim. They will also assist calculate the credit amount based on eligible salaries and other certifying expenditures.
Retroactive Claim Review: If you are eligible to claim the ERC for prior quarters, these business can examine your previous payroll records and financials to determine potential opportunities for retroactive credits. They can assist you amend prior tax returns to declare these refunds.
Filing Support: Business focusing on ERC filings will prepare and send the needed types and documentation in your place. This includes finishing Form 941 or any other required tax forms.
Compliance and Updates: ERC regulations and guidance have evolved with time. These companies stay updated with the latest modifications and make sure that your filings adhere to the most existing standards. If the Internal revenue service demands additional information or conducts an audit related to your ERC claim, they can likewise supply ongoing support.
It’s important to research and veterinarian any business providing ERC filing help to guarantee their reliability and knowledge. Search for established companies with experience in tax and payroll services, or think about reaching out to relied on accounting companies or tax specialists who use ERC submitting support.
Keep in mind that while these companies can offer important help, it’s always a good concept to have a fundamental understanding of the ERC requirements and process yourself. This will assist you make informed choices and ensure precise filings.
The Worker Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief steps. The goal of the ERC is to encourage businesses to retain 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 available to eligible employers, including for-profit businesses, tax-exempt companies, and specific governmental entities. To certify, companies should satisfy one of two criteria:.
Business operations were fully or partially suspended due to a federal government order related to COVID-19.
Business experienced a significant decrease in gross invoices. As mentioned previously, for 2021, a considerable decrease is specified as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decrease in gross receipts 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 employer’s share of Social Security taxes. The credit quantity amounts to a percentage (approximately 70%) of qualified wages paid to workers, including specific 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: At first, services that received a Paycheck Protection 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. However, the very same wages can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively broadened and enhanced, permitting eligible companies to claim the credit for qualified wages paid as far back as March 13, 2020. This retroactive provision offers an opportunity for companies to change prior-year income tax return and get refunds.
Claiming the Credit: Companies can declare the ERC by reporting it on their work income tax return, typically Kind 941. If the credit goes beyond the quantity of work taxes owed, the excess can be reimbursed to the company.
It is essential to note that the ERC arrangements and eligibility criteria have actually progressed in time. The very best strategy is to seek advice from a tax expert or visit the main internal revenue service site for the most detailed and updated details regarding the ERC, including any current legal modifications or updates.
To qualify for the ERC, a business should meet among the following requirements:.
The business operations were totally or partially suspended due to a government order related to COVID-19.
The business experienced a significant decline in gross receipts. For 2021, a substantial decline is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decrease is specified as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decline in gross invoices compared to the right away preceding quarter.
The ERC is available to services of all sizes, including tax-exempt organizations, however there are some exceptions. For example, federal government entities and services that got a PPP loan might have constraints on declaring the credit.
The procedure for claiming the ERC involves completing the required kinds and consisting of the credit on your work income tax return (generally Type 941). The exact time it requires to process the credit can vary based on a number of factors, consisting of the complexity of your organization and the workload of the internal revenue service. It’s advised to speak with a tax expert for guidance specific to your situation.
There are several business that can help with the procedure of claiming the ERC. Some widely known companies that offer assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the details offered here is based upon general understanding and might not reflect the most recent updates or changes to the ERC. It’s important to seek advice from a tax professional or go to the official internal revenue service website for the most updated and precise info relating to eligibility, claiming procedures, and available support.
Less than 100. The credit is based if the company had 100 or fewer employees on average in 2019.
on earnings paid to all workers whether they actually worked or not. Simply put, 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 only for salaries paid to employees who did not work throughout the calendar quarter.
In both cases, “salaries” consists of not just cash payments but also a portion of the cost of company.
provided healthcare. Can S Corp Owner Get Employee Retention Credit
Payment.
Companies can be right away repaid for the credit by lowering the quantity of payroll taxes they.