Lets talk first about S-corp Claim Employee Retention Credit :
Our group here what do these people doing everyone in this room is assisting teach individuals about ERC and uh always supply a beautiful breakfast and have individuals really learn about the program we ought to head to the room where we have the ability to display some of the checks that we are getting for business and I wish to see that what is this this is uh numerous millions of dollars actually Kevin numerous millions of dollars so these are duplicate copies of the letters that go to clients validating that the check is on the way I indicate you understand if you simply start 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 mean it’s simply I indicate consider how many actual 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 IRS heading to the consumer 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 and that’s when they pay so they don’t pay anything up until they actually get the cash they do not pay bottom line Wonder trust anything till this letter is confirmed the check is on the way they deposit it into their checking account and they can really trust Wonder trust that the process has been completed and the number of you believe you’ve processed because you started this we’re about 35 000 of these for
about 6 billion dollars wow so plainly they know what they’re doing which’s what you require you require 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 speaking about something actually crucial today the worker retention credit which most of you have actually never ever become aware of I certainly hadn’t become aware of it till very recently and learned a lot about it since this is probably the most affordable cost of capital for any small business anywhere
anytime if you have staff members between 5 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 challenging this isn’t like PPP we simply contact your bank supervisor and state offer me a loan it does not work there’s not a loan it’s an application and Josh is going to inform us all about it and how to get it and why I’ve ended up being yes the Ambassador and paid spokesperson for this I love this program it’s going away soon you got to discover all about it let’s talk employee retention credit Josh Fox what is an ERC let’s just begin there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act provided organizations 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everyone it makes a big difference right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
remedy the cash money payroll tax refund alright go on sorry I simply need to make certain we got that point I indicate that’s a huge distinction a loan versus cash money I like money money that’s what we’re speaking about all right 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 hard check in the mail where you get actual money from the IRS all right so let’s speak about how it works since it seems like to me if it’s a if it’s employee retention credit that person needed to be a staff member 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 employees right you had to have actually owned a company but it’s based upon you having W-2 staff members in America not 10.99. As long as you had W-2 staff members 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 first 6 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 2 3 and 4 of 2020 and you had quarters one 2 and three of 2021. fine so that’s how it’s determined you have to be on the W-2 during that duration now let’s talk my favorite part cash just 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 precise Kevin is 50 of the worker’s income to an optimum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the worker’s wage to a maximum of seven thousand per quarter how did that take place um they simply altered the rules in.
2021 versus since the mayhem of the pandemic so they wished 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 as much as 5 thousand Max and after that what happens 21 000 Max in 2021 oh that’s how you develop twenty 6 thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per worker that is since that’s a lot of cash it is now there’s a caveat here the PPP money would have to be decreased from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would lower the 26 000 so what we’re seeing typically Kevin is if you took PPP money somewhere 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 question is why does no one learn about this due to the fact that look when I initially found out about this when I initially satisfied Josh you understand I have actually got lots of investments in lots of business I’m a major advocate for entrepreneurship in America and make numerous many investments in entrepreneurs of which many suffered through the pandemic when I first became aware of this I called BS I don’t think it because I utilize the PPP we went through the cash 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 been worthy of and we utilized them carefully to stay alive during the pandemic so when I found out about this I stated nah it can’t hold true but when I dug around I even contacted us to my political leader buddies Governor Senators they didn’t understand about it I suggest that’s how you know that’s how false information is that there’s no details out there then a lot of people told me well you can’t get it because you took the PPP also not true so let’s ask Josh why does nobody understand about the employee retention credit you understand what’s interesting you’re speaking about the banks Kevin because 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 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 procedure that’s all um and here there was turmoil since remember in the initial cares act you could not do both programs so if you had actually done PPP you might refrain from doing ERC in the initial program and when they changed 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 any person about how to.
do this does your CFO understand how to do this not really he or she’s never ever done it in the past 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 company and bottom line my company Kevin has actually stayed in business since 2009 and we have actually been dealing with the federal government and the state federal government to recuperate money for Fortune 500 Fortune 1000 companies so a great deal of our huge big corporate customers have worked with bottom line to recuperate other government programs we have actually done sales tax and utilize tax joblessness tax work chance tax credits research and development tax credits unclaimed home real estate tax all of these other government programs.
The worker retention tax credit is a broad based refundable tax credit developed to motivate.
employers to keep workers on their payroll. The credit is 50% of approximately $10,000 in earnings paid by an.
Because of COVID-19 or whose gross receipts, employer whose organization is fully or partly suspended.
decrease by more than 50%.
1. The credit is offered to all employers no matter size including tax exempt organizations. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
services who take Small Business Loans.
2. To qualify, the company has to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s organization is fully or partially suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross invoices are below 50% of the similar quarter in 2019. Once the.
employer’s gross receipts exceed 80% of an equivalent quarter in 2019 they no longer certify.
after completion of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the certifying earnings paid up to $10,000 in total.
It works for salaries paid after March 13th and before December 31, 2020.
The meaning of qualifying wages varies by whether an employer had, on average, basically than.
100 employees in 2019.
Business that specialize in ERC filing support normally supply proficiency and support to assist companies browse the complicated procedure of claiming the credit. They can offer various services, consisting of:.
How is the employee retention credit calculated? S-corp Claim Employee Retention Credit
Eligibility Assessment: These business will examine your business’s eligibility for the ERC based on factors such as your industry, revenue, and operations. They can help identify if you fulfill the requirements for the credit and identify the maximum credit quantity you can declare.
Documents and Computation: ERC filing services will help in collecting the necessary paperwork, such as payroll records and monetary declarations, to support your claim. They will also assist compute the credit amount based on qualified incomes and other certifying costs.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for previous quarters, these companies can examine your previous payroll records and financials to determine prospective opportunities for retroactive credits. They can assist you change prior tax returns to claim these refunds.
Filing Help: Companies focusing on ERC filings will prepare and submit the necessary kinds and documentation in your place. This consists of finishing Form 941 or any other required tax return.
Compliance and Updates: ERC policies and guidance have evolved in time. These business stay upgraded with the latest changes and guarantee that your filings comply with the most current guidelines. They can also supply continuous support if the internal revenue service requests additional details or carries out an audit related to your ERC claim.
It is necessary to research study and vet any business offering ERC filing help to ensure their trustworthiness and competence. Try to find established companies with experience in tax and payroll services, or think about connecting to trusted accounting companies or tax specialists who use ERC submitting support.
Remember that while these companies can provide important help, it’s always a good concept to have a standard understanding of the ERC requirements and process yourself. This will assist you make informed choices and guarantee precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief measures. The objective of the ERC is to motivate companies to keep and pay their staff members during the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to eligible employers, including for-profit services, tax-exempt organizations, and particular governmental entities. To qualify, companies should meet one of two criteria:.
Business operations were completely or partly suspended due to a federal government order related to COVID-19.
Business experienced a considerable decline in gross invoices. As pointed out previously, for 2021, a considerable decline is defined as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decrease is specified 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 instantly preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit quantity is equal to a portion (approximately 70%) of qualified earnings paid to employees, consisting of particular health plan costs. The maximum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, organizations that got a Paycheck Protection Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 allows businesses to declare the ERC even if they got a PPP loan. However, the very same incomes can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and boosted, permitting qualified companies to declare the credit for qualified incomes paid as far back as March 13, 2020. This retroactive arrangement provides an opportunity for companies to amend prior-year income tax return and get refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their work income tax return, typically Form 941. If the credit exceeds the amount of employment taxes owed, the excess can be refunded to the employer.
It is very important to keep in mind that the ERC provisions and eligibility criteria have developed over time. The very best strategy is to talk to a tax professional or check out the main internal revenue service site for the most comprehensive and current info concerning the ERC, consisting of any recent legal changes or updates.
To receive the ERC, a company should meet among the following criteria:.
Business operations were fully or partially suspended due to a government order related to COVID-19.
The business experienced a substantial decline in gross receipts. For 2021, a significant decline is defined as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a considerable decline is specified 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 available to services of all sizes, including tax-exempt companies, however there are some exceptions. Federal government entities and companies that received a PPP loan might have limitations on claiming the credit.
The procedure for claiming the ERC includes completing the necessary kinds and consisting of the credit on your employment income tax return (normally Form 941). The exact time it takes to process the credit can vary based upon several aspects, including the intricacy of your company and the work of the IRS. It’s suggested to talk to a tax expert for guidance particular to your circumstance.
There are several companies that can aid with the procedure of declaring the ERC. These include accounting firms, tax advisory services, and payroll service providers. Some well-known companies that provide support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research and contact these business directly to inquire about their fees and services.
Please note that the information offered here is based on general knowledge and might not show the most current updates or changes to the ERC. It is essential to seek advice from a tax expert or go to the official internal revenue service website for the most precise and up-to-date information regarding eligibility, declaring procedures, and offered support.
Less than 100. If the company had 100 or fewer employees on average 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.
workers worked full time and got paid for full time work, the employer still gets the credit.
Greater than 100. The credit is if the company had more than 100 staff members on average in 2019.
permitted only for salaries paid to staff members who did not work throughout the calendar quarter.
In both cases, “wages” consists of not simply cash payments but also a portion of the expense of company.
provided health care. S-corp Claim Employee Retention Credit
Employers can be right away compensated for the credit by lowering the quantity of payroll taxes they.