Lets talk first about S-corp Owner Wages Employee Retention Credit :
Our group here what do these guys doing everybody in this room is assisting teach individuals about ERC and uh constantly offer a beautiful breakfast and have individuals truly learn about the program we must head to the room where we have the ability to show a few of the checks that we are getting for business and I want to see that what is this this is uh numerous countless dollars literally Kevin numerous millions of dollars so these are replicate copies of the letters that go to clients verifying that the check is on the method I mean you understand if you just start to take a 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 just I indicate think of 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 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 gone for sure which’s when they pay so they don’t pay anything until they in fact get the money they don’t pay bottom line Wonder trust anything till this letter is verified the check is on the method they transfer it into their bank account and they can truly trust Wonder trust that the process has actually been finished and how many you think you’ve processed given that you started this we’re about 35 000 of these for
about 6 billion dollars wow so clearly they know what they’re doing and that’s what you require you require specialists 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 discussing something really essential today the employee retention credit which the majority of you have actually never become aware of I definitely had not heard of it until extremely recently and discovered a lot about it due to the fact that this is probably the lowest cost of capital for any small company 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 creator and CEO of bottom line Concepts they’re the biggest processor of these ERC credits this is a 170 page program so it’s challenging this isn’t like PPP we simply call up your bank manager 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 become yes the Ambassador and paid representative for this I enjoy this program it’s disappearing soon you got to find out all about it let’s talk worker retention credit Josh Fox what is an ERC let’s simply start there so throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act provided organizations three 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 difference right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the cash money payroll tax refund fine go on sorry I simply have to make certain we got that point I indicate that’s a big difference a loan versus cash money I like money money that’s what we’re discussing 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 tough check in the mail where you get real cash from the IRS all right so let’s discuss how it works due to the fact that it sounds like to me if it’s a if it’s employee retention credit that person had 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 shareholders it’s for workers right you needed to have owned a company however it’s based upon you having W-2 staff members in America not 10.99. so as long as you had W-2 staff members and you paid federal payroll taxes that’s why you would be eligible so you need 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 appropriate so there were six quarters the program was open well stroll us through the six quarters so you had quarters two 3 and 4 of 2020 and you had quarters one two and three of 2021. okay so that’s how it’s determined you have to be on the W-2 throughout that duration now let’s talk my preferred part money just how much can you get back per employee that was on a W-2 in those 6 quarters so the estimation in 2020 to be specific Kevin is 50 of the worker’s income to a maximum of 5 thousand dollars per staff member for the year of 2020 and in 2021 the numbers increased to 70 of the staff member’s income to an optimum of 7 thousand per quarter how did that take place um they simply altered the rules in.
2021 versus since the turmoil 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 approximately five thousand Max and after that what occurs 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 employee that is because that’s a lot of cash it is now there’s a caveat here the PPP money would need to be decreased from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would reduce the 26 000 so what we’re seeing typically Kevin is if you took PPP money someplace around 10 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 IRS so it’s substantial clearly now the big concern is why does no one learn about this because appearance when I first found out about this when I initially satisfied Josh you understand I have actually got great deals of financial investments in lots of companies I’m a major supporter for entrepreneurship in America and make many many investments in entrepreneurs of which numerous suffered through the pandemic when I first heard about this I called BS I do not believe it since I use the PPP we went through the money center Banks to get it it was extremely 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 be true but when I dug around I even contacted us to my political leader buddies Governor Senators they didn’t learn about it I suggest that’s how you understand 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 since you took the PPP likewise not real so let’s ask Josh why does nobody learn about the staff member retention credit you know what’s fascinating you’re discussing the banks Kevin because in the PPP loan process 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 simply procedure procedure that’s all um and here there was mayhem because remember in the original cares act you might not do both programs so if you had done PPP you might not do ERC in the original program and when they changed the law in 2021 the banks were refraining from 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 anyone about how to.
do this does your CFO know 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 a few of them are doing it as a payroll company your accountant no your accountant’s never done this prior to unless you have an account that entered into this organization and bottom line my firm Kevin has actually stayed in business since 2009 and we have actually been dealing with the federal government and the state government to recuperate money for Fortune 500 Fortune 1000 companies so a great deal of our huge big corporate customers have actually worked with bottom line to recover other federal government programs we have actually done sales tax and utilize tax unemployment tax work opportunity tax credits research and development tax credits unclaimed home real estate tax all of these other federal government programs.
The worker retention tax credit is a broad based refundable tax credit created to motivate.
companies to keep employees on their payroll. The credit is 50% of up to $10,000 in incomes paid by an.
Due to the fact that of COVID-19 or whose gross invoices, employer whose service is completely or partly suspended.
decline by more than 50%.
1. The credit is readily available to all companies regardless of size including tax exempt organizations. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) small.
services who take Small company Loans.
2. To qualify, the employer needs to fulfill one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s business is completely or partially suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross invoices are listed below 50% of the comparable quarter in 2019. When the.
employer’s gross invoices exceed 80% of an equivalent quarter in 2019 they no longer certify.
after completion of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the qualifying wages paid up to $10,000 in total.
It works for incomes paid after March 13th and before December 31, 2020.
The meaning of certifying salaries differs by whether a company had, on average, basically than.
100 staff members in 2019.
Companies that specialize in ERC filing assistance generally provide competence and support to assist organizations browse the complex process of declaring the credit. They can provide different services, consisting of:.
How is the employee retention credit calculated? S-corp Owner Wages Employee Retention Credit
Eligibility Evaluation: These business will examine your organization’s eligibility for the ERC based on factors such as your industry, revenue, and operations. They can help figure out if you meet the requirements for the credit and identify the maximum credit quantity you can claim.
Documentation and Estimation: ERC filing services will help in collecting the needed documents, such as payroll records and financial statements, to support your claim. They will also assist calculate the credit quantity based upon eligible wages and other certifying expenses.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for prior quarters, these business can evaluate your past payroll records and financials to recognize potential chances for retroactive credits. They can help you amend previous tax returns to declare these refunds.
Filing Assistance: Companies concentrating on ERC filings will prepare and send the needed types and paperwork in your place. This consists of completing Form 941 or any other required tax forms.
Compliance and Updates: ERC policies and assistance have evolved with time. These companies remain updated with the latest changes and make sure that your filings abide by the most existing guidelines. If the IRS demands extra details or carries out an audit related to your ERC claim, they can also supply continuous assistance.
It is necessary to research study and vet any business offering ERC filing help to ensure their reliability and know-how. Try to find recognized firms with experience in tax and payroll services, or think about reaching out to relied on accounting companies or tax professionals who offer ERC submitting assistance.
Bear in mind that while these business can provide valuable support, it’s always a good concept to have a fundamental understanding of the ERC requirements and procedure yourself. This will assist you make informed choices and make sure accurate filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief steps. The goal of the ERC is to encourage businesses to keep and pay their employees throughout the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to eligible employers, consisting of for-profit companies, tax-exempt organizations, and particular governmental entities. To qualify, employers need to satisfy one of two requirements:.
Business operations were completely or partly suspended due to a federal government order related to COVID-19.
The business experienced a substantial decline in gross receipts. As discussed earlier, for 2021, a substantial decrease is specified as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decline in gross invoices compared to the immediately preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount is equal to a portion (up to 70%) of certified salaries paid to employees, including particular health plan expenditures. The maximum credit per employee 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 Defense Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 permits organizations to claim the ERC even if they got a PPP loan. The exact same wages can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively expanded and boosted, enabling qualified companies to declare the credit for certified wages paid as far back as March 13, 2020. This retroactive arrangement supplies a chance for businesses to amend prior-year income tax return and get refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their employment income tax return, normally Form 941. If the credit surpasses the quantity of work taxes owed, the excess can be refunded to the company.
It is very important to keep in mind that the ERC arrangements and eligibility criteria have actually progressed in time. The very best strategy is to talk to a tax expert or visit the main IRS site for the most in-depth and updated info regarding the ERC, consisting of any current legislative modifications or updates.
To get approved for the ERC, a business must satisfy one of the following requirements:.
The business operations were totally or partly suspended due to a government order related to COVID-19.
Business experienced a considerable decrease in gross receipts. For 2021, a substantial decline is specified as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a substantial decline is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
The ERC is offered to organizations of all sizes, including tax-exempt companies, however there are some exceptions. For instance, federal government entities and companies that got a PPP loan might have constraints on claiming the credit.
The process for claiming the ERC involves finishing the required types and including the credit on your work tax return (usually Kind 941). The exact time it takes to process the credit can differ based upon numerous elements, including the complexity of your company and the work of the internal revenue service. It’s suggested to consult with a tax professional for guidance specific to your circumstance.
There are several companies that can aid with the process of declaring the ERC. These consist of accounting firms, tax advisory services, and payroll service providers. Some widely known business that provide help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research study and get in touch with these business straight to inquire about their costs and services.
Please note that the information provided here is based upon general knowledge and may not show the most current updates or modifications to the ERC. It’s important to consult with a tax professional or visit the main IRS website for the most updated and precise info concerning eligibility, claiming treatments, and offered support.
Less than 100. The credit is based if the employer had 100 or less workers on average in 2019.
on wages paid to all workers whether they actually worked or not. To put it simply, even if the.
staff members worked full time and made money for full time work, the company still gets the credit.
Greater than 100. If the company had more than 100 employees on average in 2019, then the credit is.
allowed only for earnings paid to staff members who did not work during the calendar quarter.
In both cases, “earnings” includes not just cash payments but also a portion of the cost of employer.
provided healthcare. S-corp Owner Wages Employee Retention Credit
Employers can be right away compensated for the credit by minimizing the quantity of payroll taxes they.