Lets talk first about S Corporation Shareholder Employee Retention Credit :
Our group here what do these guys doing everybody in this space is assisting teach people about ERC and uh always provide a stunning breakfast and have individuals truly discover the program we need to head to the room where we are able to display a few of the checks that we are getting for business and I ‘d like to see that what is this this is uh numerous millions of dollars actually Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to clients validating that the check is on the way I mean you know if you just begin to 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 suggest it’s simply I imply think of how many real clients that went through the program yeah this is the very end this is the party at the end when the check is validated the numbers are verified and the check is on the mail in the mail from the internal revenue service heading to the consumer so that’s how you’re able to track it you know when you
receive this you understand the check is opted for sure which’s when they pay so they do not pay anything up until they actually receive the cash they don’t pay bottom line Wonder trust anything until this letter is validated the check is on the method they transfer it into their checking account and they can truly trust Wonder trust that the procedure has actually been finished and how many you believe you have actually processed given that you began this we’re about 35 000 of these for
about six billion dollars wow so clearly they understand what they’re doing and that’s what you need you need professionals 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 talking about something really important today the staff member retention credit which the majority of you have never ever become aware of I certainly hadn’t heard of it till really recently and learned 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 staff members between five and five hundred so I’ve got the professional 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 just contact your bank manager and state provide 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 become yes the Ambassador and paid representative for this I enjoy this program it’s going away very soon you got to learn 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 offered businesses 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everyone 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.
correct the cash cash payroll tax refund alright go on sorry I just have to make sure 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 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 original cares Act is the ERC and yes Kevin it is a lovely hard check in the mail where you get real cash from the internal revenue service all right so let’s discuss 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 Presumption this cash is not for the owner not for individuals on the cap table not for investors it’s for staff members right you had to have actually owned a service however it’s based on 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 qualified 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 right so there were 6 quarters the program was open well stroll 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 measured you need to be on the W-2 during that period 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 six quarters so the calculation in 2020 to be precise Kevin is 50 of the staff member’s income to an optimum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the employee’s wage to a maximum of seven thousand per quarter how did that occur um they just changed the rules in.
2021 versus because the turmoil of the pandemic so they wished to even get more to keep those employees on payroll 100 so if you can get 5 000 per person Max in twenty that was 50 in 2020 up to 5 thousand Max and then what takes place 21 000 Max in 2021 oh that’s how you develop twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per staff member that is because that’s a lot of money it is now there’s a caution here the PPP money would have to be minimized from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would minimize the 26 000 so what we’re seeing typically Kevin is if you took PPP money somewhere around 10 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 IRS so it’s big certainly now the huge question is why does no one learn about this due to the fact that appearance when I initially became aware of this when I initially satisfied Josh you understand I’ve got lots of investments in great deals of business I’m a major advocate for entrepreneurship in America and make numerous many financial investments in entrepreneurs of which numerous suffered through the pandemic when I initially heard about this I called BS I do not think it due to the fact that I utilize the PPP we went through the cash center Banks to get it it was very easy to do we had our CEOs call the banks they got their loans and that were well deserved and we utilized them carefully to survive throughout the pandemic so when I found out about this I said nah it can’t be true but when I dug around I even called to my political leader good friends Governor Senators they didn’t know about it I mean that’s how you know that’s how false information is that there’s no details out there then a bunch of individuals told me well you can’t get it because you took the PPP likewise not true so let’s ask Josh why does nobody understand about the staff member retention credit you understand what’s intriguing you’re speaking about the banks Kevin because in the PPP loan process 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 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 just procedure process that’s all um and here there was chaos due to the fact that keep in mind in the initial cares act you could refrain from doing both programs so if you had actually done PPP you could refrain from doing ERC in the initial program and when they changed the law in 2021 the banks were refraining from doing ERC because 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 know how to do this not actually she or he’s never ever done it previously do the banks do it nope the banks do not 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 ever done this before unless you have an account that entered into this service and bottom line my company Kevin has actually stayed in business because 2009 and we’ve been dealing with the federal government and the state government to recuperate money for Fortune 500 Fortune 1000 business so a great deal of our big huge business clients have dealt with bottom line to recover other federal government programs we’ve done sales tax and use tax joblessness tax work opportunity tax credits research and development tax credits unclaimed property real estate tax all of these other federal government programs.
The staff member retention tax credit is a broad based refundable tax credit designed to motivate.
companies 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 partially suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is available to all employers regardless of size consisting of tax exempt organizations. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) small.
organizations who take Small company Loans.
2. To qualify, the employer has to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s service is totally or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the similar quarter in 2019. When the.
employer’s gross receipts exceed 80% of an equivalent 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 certifying incomes paid up to $10,000 in overall.
It is effective for earnings paid after March 13th and prior to December 31, 2020.
The definition of certifying wages varies by whether a company had, typically, basically than.
100 staff members in 2019.
Companies that focus on ERC filing help generally offer know-how and assistance to help businesses browse the complex procedure of declaring the credit. They can use different services, consisting of:.
How is the employee retention credit calculated? S Corporation Shareholder Employee Retention Credit
Eligibility Assessment: These business will assess your service’s eligibility for the ERC based on elements such as your market, earnings, and operations. If you satisfy the requirements for the credit and recognize the optimum credit amount you can declare, they can help determine.
Documentation and Estimation: ERC filing services will help in gathering the needed paperwork, such as payroll records and monetary declarations, to support your claim. They will likewise help calculate the credit amount based upon qualified incomes and other certifying expenditures.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for prior quarters, these companies can examine your past payroll records and financials to determine possible chances for retroactive credits. They can assist you modify prior tax returns to claim these refunds.
Filing Help: Companies concentrating on ERC filings will prepare and send the essential forms and documentation in your place. This includes completing Form 941 or any other necessary tax forms.
Compliance and Updates: ERC guidelines and assistance have developed in time. These business remain upgraded with the current modifications and guarantee that your filings comply with the most present guidelines. If the IRS requests extra information or carries out an audit associated to your ERC claim, they can likewise supply continuous assistance.
It’s important to research study and veterinarian any business offering ERC filing assistance to guarantee their credibility and proficiency. Try to find recognized firms with experience in tax and payroll services, or consider connecting to relied on accounting firms or tax specialists who provide ERC filing assistance.
Remember that while these companies can supply valuable support, it’s always a great concept to have a fundamental understanding of the ERC requirements and process yourself. This will help you make notified decisions and ensure precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief procedures. The objective of the ERC is to motivate companies to keep and pay their workers during 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 companies, consisting of for-profit businesses, tax-exempt organizations, and particular governmental entities. To qualify, companies must meet one of two requirements:.
The business operations were completely or partly suspended due to a federal government order related to COVID-19.
The business experienced a considerable decline in gross receipts. As discussed previously, for 2021, a substantial decrease is defined as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decline in gross receipts compared to the very 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 employer’s share of Social Security taxes. The credit quantity is equal to a portion (approximately 70%) of certified wages paid to workers, consisting of particular health plan costs. The optimum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, businesses that got an Income Protection Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 enables companies to declare the ERC even if they received a PPP loan. Nevertheless, the exact same salaries can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and enhanced, enabling eligible companies to declare the credit for qualified wages paid as far back as March 13, 2020. This retroactive provision supplies an opportunity for services to change prior-year tax returns and receive refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their work tax returns, generally Type 941. The excess can be reimbursed to the employer if the credit goes beyond the quantity of work taxes owed.
It is necessary to keep in mind that the ERC arrangements and eligibility criteria have actually evolved over time. The best course of action is to talk to a tax expert or visit the official IRS website for the most comprehensive and updated info concerning the ERC, consisting of any recent legal modifications or updates.
To receive the ERC, a service must satisfy among the following criteria:.
Business operations were totally or partially suspended due to a government order related to COVID-19.
The business experienced a significant decline in gross invoices. For 2021, a significant decrease is specified as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decline in gross invoices compared to the right away preceding quarter.
The ERC is readily available to services of all sizes, consisting of tax-exempt companies, but there are some exceptions. Federal government entities and businesses that got a PPP loan might have limitations on claiming the credit.
The process for claiming the ERC involves finishing the essential forms and including the credit on your employment income tax return (usually Form 941). The exact time it requires to process the credit can differ based on a number of elements, consisting of the complexity of your business and the work of the internal revenue service. It’s recommended to speak with a tax expert for guidance specific to your scenario.
There are numerous companies that can assist with the procedure of claiming the ERC. Some widely known business that offer help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the details provided here is based upon general knowledge and might not reflect the most recent updates or modifications to the ERC. It is necessary to talk to a tax professional or check out the main internal revenue service website for the most accurate and up-to-date details regarding eligibility, claiming treatments, and available assistance.
Less than 100. If the employer had 100 or fewer staff members typically in 2019, then the credit is based.
on wages paid to all employees whether they in fact 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 workers on average in 2019.
allowed just for salaries paid to employees who did not work during the calendar quarter.
In both cases, “salaries” includes not simply cash payments however also a portion of the expense of company.
supplied healthcare. S Corporation Shareholder Employee Retention Credit
Employers can be right away repaid for the credit by lowering the quantity of payroll taxes they.