Lets talk first about S Corporation Owner Employee Retention Credit :
Our group here what do these people doing everyone in this room is assisting teach individuals about ERC and uh always offer a beautiful breakfast and have individuals actually learn more about the program we ought to head to the room where we have the ability to display a few of the checks that we are getting for companies and I want to see that what is this this is uh hundreds of millions of dollars literally Kevin hundreds of countless dollars so these are duplicate copies of the letters that go to clients validating that the check is on the way I imply you understand if you just start to look at some of these here I imply this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s simply I indicate think of how many actual clients 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 validated 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 understand when you
get this you understand the check is chosen sure which’s when they pay so they don’t pay anything until they in fact receive the cash they do not 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 been finished and how many you believe you have actually processed because you began this we have to do with 35 000 of these for
about 6 billion dollars wow so clearly they know what they’re doing which’s what you need 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 speaking about something actually essential today the worker retention credit which the majority of you have never become aware of I definitely hadn’t heard of it up until extremely just recently and discovered a lot about it since this is probably the lowest expense of capital for any small business anywhere
anytime if you have staff members in between five and five hundred so I have actually got the expert with me this is Josh Fox he’s the founder and CEO of bottom line Ideas 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 just contact 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 us all about it and how to get it and why I’ve become yes the Ambassador and paid spokesperson for this I love this program it’s disappearing very soon you got to discover everything about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply begin there so during the Trump Administration when President Trump was enacted they created the cares Act and the cares act used businesses 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 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
fix the money cash payroll tax refund fine go on sorry I just have to ensure we got that point I suggest that’s a big difference a loan versus money money I like money cash that’s what we’re discussing 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 initial cares Act is the ERC and yes Kevin it is a gorgeous hard check in the mail where you get actual cash from the internal revenue service all right so let’s talk about how it works because it seems like to me if it’s a if it’s staff member retention credit that individual needed to be a worker so I’m going to make the Assumption this money is not for the owner not for individuals on the cap table not for shareholders it’s for workers 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. As long as you had W-2 workers 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 right so there were 6 quarters the program was open well walk us through the six quarters so you had quarters two 3 and four of 2020 and you had quarters one two and 3 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 preferred part money just how much can you return per employee that was on a W-2 in those 6 quarters so the computation in 2020 to be precise Kevin is 50 of the employee’s wage to an optimum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the staff member’s income to a maximum of 7 thousand per quarter how did that take place um they simply changed 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 five thousand Max and then what occurs 21 000 Max in 2021 oh that’s how you come up with twenty six 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 great deal of money it is now there’s a caveat 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 two you would decrease the 26 000 so what we’re seeing typically Kevin is if you took PPP cash somewhere around 10 thousand dollars an individual so let’s say hypothetically you owned a restaurant in New york city City where I’m from and you had a hundred staff members and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s huge obviously now the huge question is why does no one understand about this because appearance when I initially heard about this when I first fulfilled Josh you understand I have actually got great deals of investments in great deals of business I’m a major supporter for entrepreneurship in America and make lots of many investments in entrepreneurs of which lots of suffered through the pandemic when I initially found out about this I called BS I don’t think it because I use 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 which were well should have and we used them wisely to survive 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 called to my political leader friends Guv Senators they didn’t understand about it I mean that’s how you understand that’s how false information is that there’s no info out there then a bunch of individuals informed me well you can’t get it because you took the PPP also not true so let’s ask Josh why does nobody know about the worker retention credit you know what’s interesting you’re talking about the banks Kevin due to the fact that in the PPP loan process 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 nation and they would process procedure 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 since remember in the original cares act you might refrain from doing both programs so if you had actually done PPP you could 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 made it clear to anybody about how to.
do this does your CFO know 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 business yeah a few of them are doing it as a payroll company your accountant no your accounting professional’s never done this prior to unless you have an account that entered into this business and bottom line my firm Kevin has actually been in business since 2009 and we have actually been dealing with the federal government and the state government to recover money for Fortune 500 Fortune 1000 business so a lot of our big huge corporate customers have worked with bottom line to recuperate other federal government programs we’ve done sales tax and utilize tax joblessness tax work opportunity tax credits research and development tax credits unclaimed property 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.
employers to keep staff members on their payroll. The credit is 50% of up to $10,000 in incomes paid by an.
employer whose service is totally or partly suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is readily available to all companies despite size including tax exempt companies. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) little.
organizations who take Small company Loans.
2. To certify, the employer needs to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s business is completely 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 equivalent quarter in 2019. As soon as the.
company’s gross receipts go above 80% of a comparable quarter in 2019 they no longer certify.
after the end of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the qualifying incomes paid up to $10,000 in total.
It works for wages paid after March 13th and prior to December 31, 2020.
The definition of qualifying wages varies by whether a company had, typically, basically than.
100 staff members in 2019.
Companies that concentrate on ERC filing help typically supply expertise and support to assist companies browse the complicated process of claiming the credit. They can offer different services, consisting of:.
How is the employee retention credit calculated? S Corporation Owner Employee Retention Credit
Eligibility Assessment: These companies will assess your company’s eligibility for the ERC based upon elements such as your market, profits, and operations. If you meet the requirements for the credit and determine the maximum credit amount you can declare, they can assist determine.
Documentation and Estimation: ERC filing services will help in collecting the needed paperwork, such as payroll records and financial declarations, to support your claim. They will also help determine the credit amount based on qualified wages and other qualifying expenditures.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for prior quarters, these companies can evaluate your past payroll records and financials to identify prospective chances for retroactive credits. They can assist you change prior income tax return to claim these refunds.
Filing Assistance: Companies concentrating on ERC filings will prepare and submit the needed types and documentation in your place. This consists of completing Form 941 or any other necessary tax return.
Compliance and Updates: ERC policies and assistance have actually developed over time. These business remain updated with the most recent changes and guarantee that your filings adhere to the most present standards. If the IRS requests additional information or performs an audit related to your ERC claim, they can likewise supply ongoing assistance.
It is necessary to research study and vet any business offering ERC filing support to guarantee their credibility and expertise. Search for recognized companies with experience in tax and payroll services, or consider reaching out to trusted accounting firms or tax professionals who provide ERC filing support.
Bear in mind that while these business can supply important support, 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 make sure precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief steps. The objective of the ERC is to encourage companies to retain and pay their workers throughout the pandemic, even if their operations have actually been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to eligible employers, consisting of for-profit companies, tax-exempt companies, and particular governmental entities. To qualify, employers must meet one of two requirements:.
The business operations were completely or partly suspended due to a federal government order related to COVID-19.
Business experienced a significant decline in gross invoices. As discussed earlier, for 2021, a substantial decrease is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decline in gross receipts 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 quantity is equal to a portion (approximately 70%) of certified incomes paid to staff members, consisting of specific health plan costs. The maximum credit per staff member is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, organizations that got an Income Defense Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 enables services to declare the ERC even if they received a PPP loan. Nevertheless, the exact same salaries can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and boosted, enabling qualified companies to declare the credit for certified wages paid as far back as March 13, 2020. This retroactive provision supplies a chance for companies to modify prior-year tax returns and receive refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their work tax returns, normally Type 941. The excess can be refunded to the employer if the credit exceeds the quantity of employment taxes owed.
It is very important to note that the ERC arrangements and eligibility requirements have progressed with time. The very best course of action is to seek advice from a tax professional or go to the main internal revenue service website for the most current and in-depth info relating to the ERC, consisting of any current legal changes or updates.
To qualify for the ERC, an organization should meet among the following requirements:.
Business operations were fully or partly suspended due to a government order related to COVID-19.
The business experienced a considerable decrease in gross invoices. For 2021, a considerable decline is specified as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
The ERC is offered to companies of all sizes, including tax-exempt organizations, however there are some exceptions. For instance, federal government entities and businesses that received a PPP loan may have constraints on declaring the credit.
The procedure for declaring the ERC involves completing the needed forms and consisting of the credit on your work tax return (usually Form 941). The exact time it requires to process the credit can vary based upon several aspects, consisting of the complexity of your service and the workload of the internal revenue service. It’s suggested to consult with a tax professional for guidance particular to your situation.
There are several business that can help with the process of claiming the ERC. Some widely known companies that offer support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the details supplied here is based upon basic knowledge and may not show the most recent updates or modifications to the ERC. It is very important to seek advice from a tax expert or go to the official internal revenue service site for the most accurate and updated details relating to eligibility, claiming procedures, and offered support.
Less than 100. If the company had 100 or fewer staff members usually in 2019, then the credit is based.
on earnings paid to all employees whether they actually worked or not. In other words, even if the.
employees worked full time and earned money for full time work, the company still gets the credit.
Greater than 100. If the employer had more than 100 employees typically in 2019, then the credit is.
enabled only for earnings paid to employees who did not work during the calendar quarter.
In both cases, “earnings” includes not just cash payments however likewise a part of the expense of employer.
offered health care. S Corporation Owner Employee Retention Credit
Employers can be immediately reimbursed for the credit by reducing the amount of payroll taxes they.