Lets talk first about Do S Corp Shareholder Wages Qualify For Employee Retention Credit :
Our team here what do these guys doing everybody in this room is helping teach individuals about ERC and uh constantly supply a lovely breakfast and have individuals actually learn about the program we ought to head to the room where we have the ability to show some 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 duplicate copies of the letters that go to clients confirming that the check is on the way I mean you understand if you just start 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 mean it’s simply I imply consider the number of real clients that went through the program yeah this is the very end this is the celebration at the end when the check is validated the numbers are confirmed 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
get this you understand the check is gone for sure and that’s when they pay so they do not pay anything up until they really receive the money they do not pay bottom line Wonder trust anything up until this letter is confirmed the check is on the method they transfer it into their bank account and they can truly rely on Wonder trust that the procedure has actually been ended up and how many you believe you’ve processed considering that you began this we’re about 35 000 of these for
about 6 billion dollars wow so plainly they know what they’re doing which’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 Wonderful here you’re at my YouTube channel we’re speaking about something actually essential today the employee retention credit which the majority of you have actually never ever become aware of I certainly had not become aware of it until very recently and learned a lot about it because this is probably the lowest cost of capital for any small company anywhere
anytime if you have employees between 5 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 difficult this isn’t like PPP we just phone your bank supervisor and state offer 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 have actually become yes the Ambassador and paid representative 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 just start there so throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act provided organizations three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically 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.
fix the cash money payroll tax refund alright go on sorry I simply have to make certain we got that point I suggest that’s a big distinction a loan versus cash cash I like money cash 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 initial cares Act is the ERC and yes Kevin it is a lovely difficult check in the mail where you get real money from the internal revenue service all right so let’s discuss how it works since it sounds like to me if it’s a if it’s staff member retention credit that individual needed to be an employee so I’m going to make the Presumption this money is not for the owner not for individuals on the cap table not for investors it’s for employees right you needed to have owned a service but it’s based upon you having W-2 employees in America not 10.99. so as long as you had W-2 employees 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 6 months of 2021 on the W-2 proper so there were 6 quarters the program was open well walk us through the 6 quarters so you had quarters 2 3 and 4 of 2020 and you had quarters one two and 3 of 2021. fine so that’s how it’s measured you have to be on the W-2 throughout that duration now let’s talk my preferred part money 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 precise Kevin is 50 of the employee’s salary to a maximum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers escalated to 70 of the worker’s wage to an optimum of 7 thousand per quarter how did that happen um they simply altered the rules in.
2021 versus due to the fact that the chaos 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 then what happens 21 000 Max in 2021 oh that’s how you create twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty 6 thousand dollars per worker that is since that’s a lot of money it is now there’s a caveat here the PPP money would need 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 state hypothetically you owned a restaurant in New York 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 certainly now the big concern is why does nobody understand about this since appearance when I initially found out about this when I initially satisfied Josh you know I’ve got lots of investments in great deals of business I’m a significant supporter for entrepreneurship in America and make lots of lots of investments in business owners of which many suffered through the pandemic when I first became aware of this I called BS I don’t think it because I utilize 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 wisely to stay alive during the pandemic so when I became aware of this I stated nah it can’t be true but when I dug around I even contacted us to my politician good friends Guv Senators they didn’t understand about it I imply that’s how you understand that’s how misinformation is that there’s no info out there then a lot of individuals informed me well you can’t get it due to the fact that you took the PPP also not real so let’s ask Josh why does no one know about the staff member retention credit you understand what’s fascinating you’re talking about the banks Kevin because 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 big 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 procedure that’s all um and here there was turmoil due to the fact that remember in the initial cares act you might refrain from doing both programs so if you had done PPP you could not do ERC in the original 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 federal government never ever made it clear to anyone about how to.
do this does your CFO understand how to do this not actually she or he’s never ever done it before do the banks do it nope the banks do not do it the payroll companies yeah some of them are doing it as a payroll company your accounting professional no your accountant’s never ever done this prior to unless you have an account that went into this service and bottom line my firm Kevin has stayed in business given that 2009 and we have actually been working with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 business so a lot of our big huge business clients have dealt with bottom line to recover other federal government programs we’ve done sales tax and utilize tax joblessness tax work chance tax credits research and development tax credits unclaimed property property tax all of these other government programs.
The worker retention tax credit is a broad based refundable tax credit created to encourage.
employers to keep staff members on their payroll. The credit is 50% of approximately $10,000 in wages paid by an.
Since of COVID-19 or whose gross receipts, company whose business is fully or partly suspended.
decrease by more than 50%.
1. The credit is readily available to all employers no matter size including tax exempt organizations. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
companies who take Small company Loans.
2. To certify, the employer has to satisfy one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s company is totally or partly suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross receipts are below 50% of the equivalent quarter in 2019. When the.
company’s gross invoices exceed 80% of a similar quarter in 2019 they no longer certify.
after the end of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the qualifying earnings paid up to $10,000 in overall.
It is effective for salaries paid after March 13th and prior to December 31, 2020.
The meaning of qualifying incomes varies by whether an employer had, usually, basically than.
100 workers in 2019.
Business that concentrate on ERC filing help normally offer know-how and support to help companies navigate the intricate procedure of declaring the credit. They can provide numerous services, consisting of:.
How is the employee retention credit calculated? Do S Corp Shareholder Wages Qualify For Employee Retention Credit
Eligibility Assessment: These companies will examine your business’s eligibility for the ERC based on factors such as your industry, revenue, and operations. They can help determine if you meet the requirements for the credit and identify the maximum credit amount you can claim.
Paperwork and Computation: ERC filing services will help in collecting the required documents, such as payroll records and financial declarations, to support your claim. They will also assist determine the credit quantity based on eligible wages and other qualifying costs.
Retroactive Claim Review: If you are eligible to claim the ERC for prior quarters, these business can examine your past payroll records and financials to recognize possible chances for retroactive credits. They can assist you change previous income tax return to declare these refunds.
Filing Help: Business concentrating on ERC filings will prepare and submit the necessary forms and documents on your behalf. This includes completing Type 941 or any other required tax return.
Compliance and Updates: ERC policies and assistance have developed with time. These companies stay upgraded with the latest changes and ensure that your filings adhere to the most existing standards. They can likewise provide continuous assistance if the IRS demands additional details or carries out an audit related to your ERC claim.
It is necessary to research study and vet any business providing ERC filing assistance to ensure their credibility and know-how. Try to find established companies with experience in tax and payroll services, or think about connecting to relied on accounting companies or tax experts who offer ERC submitting assistance.
Keep in mind that while these business can provide valuable assistance, it’s always a great idea to have a fundamental understanding of the ERC requirements and procedure yourself. This will assist you make informed choices 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 measures. The goal of the ERC is to encourage companies to maintain and pay their employees throughout the pandemic, even if their operations have been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to qualified companies, including for-profit businesses, tax-exempt companies, and certain governmental entities. To certify, companies must fulfill one of two requirements:.
The business operations were completely or partially suspended due to a federal government order related to COVID-19.
Business experienced a significant decline in gross receipts. As pointed out previously, for 2021, a substantial decrease is specified as a 20% decline 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 invoices compared to the exact same quarter in 2019, or a 20% decline in gross invoices compared to the immediately preceding quarter.
Credit Quantity: 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 wages paid to staff members, consisting of particular health plan expenses. 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, companies that got a Paycheck Protection Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 allows companies to claim the ERC even if they received a PPP loan. The same wages can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and boosted, enabling eligible companies to claim the credit for qualified earnings paid as far back as March 13, 2020. This retroactive arrangement supplies an opportunity for organizations to amend prior-year tax returns and get refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their work income tax return, normally Type 941. If the credit goes beyond the quantity of work taxes owed, the excess can be reimbursed to the employer.
It is very important to note that the ERC arrangements and eligibility criteria have actually developed over time. The best strategy is to seek advice from a tax professional or go to the official internal revenue service website for the most detailed and updated information relating to the ERC, including any recent legal modifications or updates.
To get approved for the ERC, a business must meet one of the following criteria:.
The business operations were totally or partly suspended due to a government order related to COVID-19.
The business experienced a substantial decrease in gross invoices. For 2021, a considerable decline is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019, or a 20% decline in gross invoices compared to the instantly preceding quarter.
The ERC is available to organizations of all sizes, consisting of tax-exempt organizations, but there are some exceptions. Federal government entities and businesses that got a PPP loan might have limitations on declaring the credit.
The process for declaring the ERC includes completing the required types and including the credit on your work income tax return (generally Type 941). The exact time it requires to process the credit can vary based on numerous aspects, including the intricacy 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 well-known business that offer help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the details supplied here is based upon basic knowledge and may not show 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 precise and up-to-date info relating to eligibility, declaring treatments, and available help.
Less than 100. If the employer had 100 or less workers typically in 2019, then the credit is based.
on earnings paid to all employees whether they actually worked or not. To put it simply, 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 company had more than 100 employees usually in 2019, then the credit is.
permitted only for incomes paid to employees who did not work throughout the calendar quarter.
In both cases, “wages” consists of not simply money payments however likewise a portion of the cost of employer.
supplied health care. Do S Corp Shareholder Wages Qualify For Employee Retention Credit
Employers can be instantly compensated for the credit by reducing the quantity of payroll taxes they.