Lets talk first about Are S Corp Owners Wages Eligible For Employee Retention Credit :
Our group here what do these men doing everyone in this room is helping teach people about ERC and uh always supply a gorgeous breakfast and have individuals really discover the program we ought to head to the space where we are able to display some of the checks that we are getting for companies and I ‘d like to see that what is this this is uh numerous millions of dollars literally 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 suggest you understand if you simply begin 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 mean it’s just I suggest think about the number of actual 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 verified and the check is on the mail in the mail from the IRS heading to the customer so that’s how you have the ability to track it you know when you
receive this you know the check is opted for sure and that’s when they pay so they don’t pay anything till they actually get the money they do not pay bottom line Wonder trust anything up until this letter is verified the check is on the method they transfer it into their bank account and they can genuinely rely on Wonder trust that the process has actually been completed and how many you believe you’ve processed considering that you started this we’re about 35 000 of these for
about six billion dollars wow so plainly they understand 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 Wonderful here you’re at my YouTube channel we’re discussing something really crucial today the staff member retention credit which the majority of you have actually never heard of I definitely hadn’t become aware of it up until really recently and discovered a lot about it because this is most likely the lowest cost of capital for any small business anywhere
anytime if you have staff members in between 5 and five hundred so I have actually got the expert with me this is Josh Fox he’s the creator and CEO of bottom line Ideas they’re the biggest processor of these ERC credits this is a 170 page program so it’s not easy this isn’t like PPP we simply call your bank supervisor and state give me a loan it doesn’t 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 like this program it’s disappearing soon you got to find out everything about it let’s talk employee 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 used organizations three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everyone it makes a big distinction right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the money money payroll tax refund alright go on sorry I simply need to make certain we got that point I mean that’s a big difference a loan versus cash cash I like cash money that’s what we’re discussing 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 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 due to the fact that it seems like to me if it’s a if it’s worker retention credit that individual had 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 a company however it’s based upon you having W-2 workers 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 eligible so you have to be on payroll in 2020 on the W-2 and you have to be on payroll for the very first 6 months of 2021 on the W-2 correct so there were 6 quarters the program was open well walk us through the 6 quarters so you had quarters two three and four of 2020 and you had quarters one 2 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 favorite part cash just how much can you get back per staff member that was on a W-2 in those 6 quarters so the estimation in 2020 to be specific Kevin is 50 of the staff member’s income 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 an optimum of seven thousand per quarter how did that happen um they just altered the rules in.
2021 versus due to the fact that the mayhem of the pandemic so they wished 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 5 thousand Max and after that what takes place 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 great deal of money it is now there’s a caution here the PPP money would need to be decreased from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would reduce the 26 000 so what we’re seeing typically Kevin is if you took PPP cash somewhere around ten thousand dollars a person so let’s say hypothetically you owned a dining establishment in New York 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 internal revenue service so it’s huge clearly now the big concern is why does no one understand about this due to the fact that appearance when I initially found out about this when I initially met Josh you know I’ve got lots of financial investments in lots of companies I’m a major advocate for entrepreneurship in America and make lots of many financial investments in entrepreneurs of which numerous suffered through the pandemic when I initially found out about this I called BS I do not believe it due to the fact that I use the PPP we went through the money center Banks to get it it was really 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 throughout the pandemic so when I found out about this I said nah it can’t hold true however when I dug around I even called to my politician buddies Guv Senators they didn’t know 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 told 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 nobody learn about the staff member retention credit you know what’s interesting you’re talking about the banks Kevin since in the PPP loan procedure the federal government made it really 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 procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s just procedure process that’s all um and here there was chaos since keep in mind in the original cares act you might refrain from doing both programs so if you had done PPP you might refrain from doing ERC in the original program and when they altered the law in 2021 the banks were not doing ERC because it’s not alone so you’re getting a tax refund so the federal government never made it clear to anyone about how to.
do this does your CFO understand how to do this not actually he or she’s never ever done it previously do the banks do it nope the banks do not do it the payroll companies yeah a few of them are doing it as a payroll business your accounting professional no your accounting professional’s never ever done this before unless you have an account that went into this service and bottom line my firm Kevin has actually stayed in business considering that 2009 and we have actually been dealing with the federal government and the state federal government to recover cash for Fortune 500 Fortune 1000 business so a lot of our big big corporate clients have actually worked with bottom line to recuperate other government programs we have actually done sales tax and utilize tax unemployment tax work chance tax credits research and development tax credits unclaimed home real estate tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit developed to motivate.
companies to keep staff members on their payroll. The credit is 50% of up to $10,000 in salaries paid by an.
Because of COVID-19 or whose gross receipts, employer whose organization is totally or partially suspended.
decline by more than 50%.
1. The credit is readily available to all companies no matter size consisting of tax exempt organizations. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
companies who take Small Business Loans.
2. To certify, the employer needs to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s business is completely or partly suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the similar quarter in 2019. As soon as the.
company’s gross receipts go above 80% of a comparable quarter in 2019 they no longer qualify.
after completion of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the certifying incomes paid up to $10,000 in total.
It works for salaries paid after March 13th and before December 31, 2020.
The definition of qualifying wages varies by whether an employer had, usually, more or less than.
100 workers in 2019.
Business that concentrate on ERC filing support usually provide expertise and support to help organizations navigate the complex procedure of claiming the credit. They can use numerous services, including:.
How is the employee retention credit calculated? Are S Corp Owners Wages Eligible For Employee Retention Credit
Eligibility Evaluation: These business will assess your organization’s eligibility for the ERC based upon factors such as your industry, revenue, and operations. If you fulfill the requirements for the credit and recognize the maximum credit amount you can claim, they can help determine.
Documentation and Calculation: ERC filing services will help in collecting the required documentation, such as payroll records and financial statements, to support your claim. They will also assist calculate the credit quantity based upon eligible incomes and other certifying expenses.
Retroactive Claim Review: If you are eligible to declare the ERC for prior quarters, these business can examine your past payroll records and financials to recognize possible chances for retroactive credits. They can help you change prior tax returns to declare these refunds.
Filing Help: Companies focusing on ERC filings will prepare and submit the essential types and paperwork in your place. This consists of completing Kind 941 or any other necessary tax return.
Compliance and Updates: ERC policies and guidance have actually developed over time. These business remain updated with the most recent changes and make sure that your filings comply with the most current guidelines. They can likewise supply continuous support if the internal revenue service demands additional info or carries out an audit related to your ERC claim.
It is essential to research study and veterinarian any business using ERC filing help to guarantee their reliability and expertise. Try to find recognized firms with experience in tax and payroll services, or consider connecting to trusted accounting companies or tax experts who offer ERC filing support.
Remember that while these business can supply important support, it’s constantly a great concept to have a fundamental understanding of the ERC requirements and process yourself. This will help you make informed decisions and make sure precise filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief procedures. The objective of the ERC is to encourage businesses to keep and pay their workers throughout the pandemic, even if their operations have actually been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to eligible employers, consisting of for-profit services, tax-exempt companies, and specific governmental entities. To certify, employers need to fulfill one of two requirements:.
Business operations were fully or partly suspended due to a federal government order related to COVID-19.
Business experienced a significant decrease in gross receipts. As mentioned earlier, for 2021, a significant decrease is defined as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly 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 percentage (as much as 70%) of qualified earnings paid to employees, consisting of specific health insurance expenses. 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: At first, companies that got an Income Protection 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 received a PPP loan. The very same wages can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and enhanced, permitting qualified companies to declare the credit for certified incomes paid as far back as March 13, 2020. This retroactive arrangement supplies a chance for businesses to change prior-year income tax return and receive refunds.
Declaring the Credit: Employers can declare the ERC by reporting it on their employment income tax return, typically Form 941. If the credit goes beyond the quantity of employment taxes owed, the excess can be reimbursed to the employer.
It is essential to keep in mind that the ERC arrangements and eligibility requirements have evolved in time. The best course of action is to talk to a tax professional or visit the main internal revenue service site for the most updated and comprehensive details concerning the ERC, consisting of any current legal changes or updates.
To qualify for the ERC, a service should meet one of the following criteria:.
The business operations were totally or partially suspended due to a government order related to COVID-19.
Business experienced a substantial decline in gross receipts. For 2021, a considerable decrease is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decline in gross invoices compared to the same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
The ERC is available to organizations of all sizes, consisting of tax-exempt companies, however there are some exceptions. For example, government entities and organizations that got a PPP loan may have restrictions on claiming the credit.
The procedure for claiming the ERC involves completing the required forms and including the credit on your employment income tax return (generally Type 941). The exact time it takes to process the credit can vary based upon several factors, including the intricacy of your business and the workload of the IRS. It’s advised to seek advice from a tax professional for guidance specific to your situation.
There are numerous business that can assist with the procedure of claiming the ERC. These consist of accounting firms, tax advisory services, and payroll provider. Some popular business that offer support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research and get in touch with these business directly to inquire about their services and costs.
Please keep in mind that the details provided here is based upon general knowledge and might not reflect the most current updates or modifications to the ERC. It is necessary to speak with a tax expert or visit the official internal revenue service site for the most current and accurate information relating to eligibility, declaring procedures, and readily available support.
Less than 100. The credit is based if the employer had 100 or fewer workers on average in 2019.
on incomes paid to all workers whether they actually worked or not. Simply put, even if the.
workers worked full-time and got paid for full-time work, the employer still gets the credit.
Greater than 100. If the company had more than 100 employees typically in 2019, then the credit is.
enabled only for wages paid to staff members who did not work during the calendar quarter.
In both cases, “earnings” consists of not simply cash payments however likewise a part of the expense of company.
provided healthcare. Are S Corp Owners Wages Eligible For Employee Retention Credit
Companies can be instantly compensated for the credit by minimizing the amount of payroll taxes they.