Lets talk first about Can S Corp Owner Take Employee Retention Credit :
Our team here what do these people doing everybody in this room is assisting teach people about ERC and uh always supply a stunning breakfast and have individuals actually find out about the program we must head to the room where we have the ability to show some of the checks that we are getting for business and I wish to see that what is this this is uh hundreds of countless dollars literally Kevin numerous countless dollars so these are duplicate copies of the letters that go to customers validating that the check is on the method I mean you know if you simply begin to take a look at some of these here I suggest this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s simply I suggest think of the number of actual clients that went through the program yeah this is the very end this is the party at the end when the check is verified the numbers are verified 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 understand when you
get this you know the check is gone for sure and that’s when they pay so they don’t pay anything up until they in fact receive the money 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 checking account and they can truly trust Wonder trust that the process has actually been finished and the number of you think you have actually processed given that you started this we have to do with 35 000 of these for
about 6 billion dollars wow so plainly they know what they’re doing and that’s what you need you need specialists 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 truly crucial today the employee retention credit which most of you have never heard of I certainly had not heard of it until very recently and discovered a lot about it due to the fact that this is probably the most affordable cost of capital for any small business anywhere
anytime if you have employees between five and five hundred so I’ve got the expert with me this is Josh Fox he’s the creator 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 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 tell us all about it and how to get it and why I have actually ended up being yes the Ambassador and paid spokesperson for this I like 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 throughout the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act provided businesses 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 huge distinction right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the money cash 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 money cash 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 gorgeous difficult check in the mail where you get real 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 worker 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 employees right you needed to have owned an organization however it’s based upon 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 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 right 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. all right 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 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 wage to a maximum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the staff member’s wage to a maximum of seven thousand per quarter how did that take place um they just changed the rules in.
2021 versus since the chaos of the pandemic so they wanted to even get more to keep those workers 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 after that what happens 21 000 Max in 2021 oh that’s how you come up with 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 money it is now there’s a caution here the PPP money would have to be lowered from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would lower the 26 000 so what we’re seeing typically 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 workers and you took PPP cash you would still get a million dollar in the mail from the IRS so it’s huge undoubtedly now the big concern is why does no one learn about this due to the fact that appearance when I first found out about this when I initially satisfied Josh you know I’ve got great deals of investments in great deals of business I’m a significant supporter for entrepreneurship in America and make lots of numerous financial investments in business owners of which lots of suffered through the pandemic when I first became aware of this I called BS I don’t think it due to the fact that I utilize 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 been worthy of and we utilized them sensibly 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 contacted us to my politician friends Governor Senators they didn’t understand about it I imply that’s how you understand that’s how false information is that there’s no information out there then a lot of individuals informed me well you can’t get it due to the fact that you took the PPP likewise not real so let’s ask Josh why does nobody learn about the worker retention credit you know what’s interesting you’re speaking about the banks Kevin since 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 big banks in our nation 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 since remember in the original cares act you might refrain from doing both programs so if you had actually done PPP you might not do ERC in the initial program and when they altered 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 understand how to do this not really he or she’s never ever done it previously do the banks do it nope the banks don’t do it the payroll companies yeah some of them are doing it as a payroll business your accountant no your accounting professional’s never ever done this prior to unless you have an account that went into this company and bottom line my company Kevin has actually been in business because 2009 and we have actually been working with the federal government and the state federal government to recuperate cash for Fortune 500 Fortune 1000 companies so a great deal of our huge huge business clients have actually dealt with bottom line to recuperate other government programs we have actually done sales tax and utilize tax joblessness tax work opportunity tax credits research and development tax credits unclaimed home property tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit designed to encourage.
companies to keep workers on their payroll. The credit is 50% of up to $10,000 in wages paid by an.
Because of COVID-19 or whose gross receipts, company whose company is completely or partially suspended.
decrease by more than 50%.
Accessibility.
1. The credit is readily available to all companies regardless of size consisting of tax exempt companies. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) little.
businesses who take Small company Loans.
2. To certify, the employer has to fulfill one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s business is fully or partially suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the company’s gross invoices are listed below 50% of the comparable quarter in 2019. As soon as the.
company’s gross receipts go above 80% of a similar quarter in 2019 they no longer qualify.
after the end of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the qualifying salaries paid up to $10,000 in total.
It works for incomes paid after March 13th and prior to December 31, 2020.
The definition of qualifying incomes differs by whether an employer had, usually, more or less than.
100 employees in 2019.
Business that focus on ERC filing help normally provide expertise and assistance to assist services navigate the complex process of claiming the credit. They can offer numerous services, consisting of:.
How is the employee retention credit calculated? Can S Corp Owner Take Employee Retention Credit
Eligibility Assessment: These companies will examine your service’s eligibility for the ERC based on factors such as your market, income, and operations. If you fulfill the requirements for the credit and recognize the maximum credit amount you can claim, they can help determine.
Paperwork and Estimation: ERC filing services will assist in gathering the essential documentation, such as payroll records and financial statements, to support your claim. They will likewise help determine the credit amount based on qualified wages and other certifying expenditures.
Retroactive Claim Review: If you are eligible to declare the ERC for previous quarters, these companies can evaluate your past payroll records and financials to determine possible opportunities for retroactive credits. They can assist you modify prior income tax return to declare these refunds.
Filing Assistance: Business specializing in ERC filings will prepare and send the required kinds and paperwork on your behalf. This consists of finishing Kind 941 or any other required tax return.
Compliance and Updates: ERC policies and assistance have progressed with time. These business remain updated with the current changes and guarantee that your filings comply with the most present standards. If the Internal revenue service demands additional info or performs an audit associated to your ERC claim, they can likewise offer ongoing support.
It’s important to research and veterinarian any company providing ERC filing assistance to guarantee their credibility and expertise. Try to find recognized firms with experience in tax and payroll services, or consider reaching out to relied on accounting companies or tax experts who use ERC filing assistance.
Keep in mind that while these companies can supply important assistance, it’s constantly an excellent concept to have a standard understanding of the ERC requirements and process yourself. This will help you make notified decisions and make sure accurate filings.
The Worker Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief procedures. The objective of the ERC is to motivate services to keep and pay their workers during the pandemic, even if their operations have actually been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is available to qualified companies, including for-profit companies, tax-exempt organizations, and particular governmental entities. To qualify, employers must fulfill one of two criteria:.
The business operations were totally or partially suspended due to a federal government order related to COVID-19.
The business experienced a substantial decrease in gross receipts. As mentioned earlier, for 2021, a significant decrease is defined as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a substantial decrease is specified as a 20% decline in gross receipts compared to the exact same quarter in 2019, or a 20% decrease 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 amount is equal to a percentage (approximately 70%) of qualified salaries paid to employees, including specific health plan costs. The optimum 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 received a Paycheck Security Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 enables organizations to claim the ERC even if they received a PPP loan. However, the very same salaries can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and improved, enabling qualified employers to claim the credit for certified incomes paid as far back as March 13, 2020. This retroactive provision offers an opportunity for companies to amend prior-year tax returns and receive refunds.
Claiming the Credit: Companies 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 reimbursed to the company.
It’s important to note that the ERC provisions and eligibility requirements have progressed with time. The very best course of action is to consult with a tax expert or visit the main IRS site for the most current and comprehensive information relating to the ERC, consisting of any recent legislative modifications or updates.
To get approved for the ERC, a service needs to satisfy among the following requirements:.
The business operations were completely or partially suspended due to a federal government order related to COVID-19.
Business experienced a significant decrease in gross receipts. For 2021, a considerable decline is specified as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decrease is specified 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 instantly preceding quarter.
The ERC is readily available to companies of all sizes, consisting of tax-exempt companies, but there are some exceptions. Government entities and companies that received a PPP loan may have constraints on declaring the credit.
The process for declaring the ERC includes finishing the necessary types and including the credit on your work tax return (usually Kind 941). The exact time it requires to process the credit can differ based upon numerous elements, including the complexity of your organization and the workload of the internal revenue service. It’s suggested to speak with a tax professional for guidance specific to your situation.
There are several companies that can assist with the procedure of declaring the ERC. These include accounting firms, tax advisory services, and payroll company. Some well-known business that use support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research study and call these companies straight to ask about their services and costs.
Please note that the details provided here is based upon general knowledge and might not show the most recent updates or changes to the ERC. It is essential to consult with a tax professional or go to the official IRS website for the most precise and up-to-date information concerning eligibility, claiming treatments, and offered help.
Less than 100. If the employer had 100 or less staff members usually in 2019, then the credit is based.
on incomes paid to all employees whether they actually worked or not. Simply put, even if the.
staff members worked full time and got paid for full-time work, the employer still gets the credit.
Greater than 100. The credit is if the employer had more than 100 workers on average in 2019.
allowed only for salaries paid to workers who did not work throughout the calendar quarter.
In both cases, “incomes” consists of not just money payments however also a portion of the cost of employer.
offered healthcare. Can S Corp Owner Take Employee Retention Credit
Payment.
Employers can be right away reimbursed for the credit by decreasing the amount of payroll taxes they.