Lets talk first about Employee Retention Credit S Corporation Shareholder :
Our group here what do these men doing everybody in this space is helping teach people about ERC and uh constantly provide a lovely breakfast and have people really find out about the program we ought to head to the space where we are able to show some of the checks that we are getting for companies and I want to see that what is this this is uh hundreds of countless dollars actually Kevin hundreds of countless dollars so these are replicate copies of the letters that go to customers validating that the check is on the way I indicate you understand if you simply start to look at some of these here I indicate this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s just I indicate think of how many actual customers that went through the program yeah this is the very end this is the party at the end when the check is confirmed the numbers are validated and the check is on the mail in the mail from the IRS heading to the consumer so that’s how you’re able to track it you understand when you
receive this you understand the check is gone for sure and that’s when they pay so they do not pay anything until they in fact receive the cash they don’t pay bottom line Wonder trust anything up until this letter is validated the check is on the method they transfer it into their bank account and they can really rely on Wonder trust that the process has actually been finished and how many you think you’ve processed since you began this we have to do with 35 000 of these for
about 6 billion dollars wow so plainly they understand what they’re doing and that’s what you require you require 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 discussing something truly crucial today the worker retention credit which most of you have never ever become aware of I definitely had not become aware of it till very just recently and learned a lot about it since this is most likely the most affordable cost of capital for any small company anywhere
anytime if you have employees between five and five hundred so I have actually 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 not easy this isn’t like PPP we just call your bank supervisor and state provide me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to tell all of us about it and how to get it and why I have actually ended up being yes the Ambassador and paid spokesperson for this I enjoy this program it’s disappearing soon you got to learn 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 came up with the cares Act and the cares act provided companies three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everybody it makes a big 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 money payroll tax refund all right go on sorry I just need to ensure we got that point I imply that’s a huge distinction a loan versus cash cash I like cash money that’s what we’re discussing okay 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 hard check in the mail where you get actual cash from the IRS all right so let’s discuss 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 needed to be an employee so I’m going to make the Assumption this cash 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 business but it’s based on 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 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 six months of 2021 on the W-2 correct so there were six quarters the program was open well stroll us through the 6 quarters so you had quarters 2 3 and four of 2020 and you had quarters one two and three of 2021. fine so that’s how it’s measured you need to be on the W-2 throughout that duration now let’s talk my favorite part money just how much can you get back per worker 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 salary to an optimum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s wage to an optimum of 7 thousand per quarter how did that occur um they simply changed the rules in.
2021 versus because 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 approximately five 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 staff member that is since that’s a great deal of money it is now there’s a caveat here the PPP money would need to be reduced from the twenty six 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 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 staff members and you took PPP money you would still get a million dollar in the mail from the IRS so it’s substantial certainly now the huge concern is why does no one learn about this because look when I initially became aware of this when I first fulfilled Josh you understand I’ve got lots of investments in lots of business I’m a major supporter for entrepreneurship in America and make lots of lots of investments in business owners of which numerous suffered through the pandemic when I first became aware of this I called BS I don’t believe it since I use the PPP we went through the money center Banks to get it it was extremely easy to do we had our CEOs call the banks they got their loans which were well should have and we utilized them sensibly to survive throughout the pandemic so when I heard about this I said nah it can’t be true but when I dug around I even called to my politician good friends Guv Senators they didn’t understand about it I imply that’s how you know that’s how misinformation is that there’s no information out there then a bunch of people 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 understand about the staff member retention credit you understand what’s fascinating you’re speaking about the banks Kevin due to the fact that in the PPP loan procedure the federal government made it very clear that if you desired a PPP loan you would call Wells Fargo Citibank Bank of America any of the huge banks in our country and they would process process in Canada a pre-pp loan there’s no loans in Canada by the way it’s just process procedure that’s all um and here there was chaos since keep in mind in the initial cares act you might not do both programs so if you had actually done PPP you could not do ERC in the initial program and when they changed the law in 2021 the banks were not doing ERC due to the fact that 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 understand how to do this not actually he or she’s never ever done it in the past 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 business your accounting professional no your accountant’s never done this before unless you have an account that entered into this company and bottom line my firm Kevin has actually stayed in business considering that 2009 and we’ve been working with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 business so a lot of our huge big business clients have worked 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 real estate tax all of these other government programs.
The staff member 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 approximately $10,000 in incomes paid by an.
company whose company is completely or partly suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is 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) small.
businesses who take Small Business Loans.
2. To certify, the employer needs to meet one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s business is fully or partially suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross invoices are listed below 50% of the similar quarter in 2019. When the.
employer’s gross receipts exceed 80% of a similar quarter in 2019 they no longer qualify.
after the end of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the qualifying earnings paid up to $10,000 in total.
It works for wages paid after March 13th and before December 31, 2020.
The definition of qualifying earnings varies by whether a company had, typically, more or less than.
100 employees in 2019.
Companies that focus on ERC filing support normally supply competence and support to help businesses browse the complex process of claiming the credit. They can offer different services, including:.
How is the employee retention credit calculated? Employee Retention Credit S Corporation Shareholder
Eligibility Assessment: These companies will examine your business’s eligibility for the ERC based on elements such as your market, earnings, and operations. If you meet the requirements for the credit and identify the optimum credit quantity you can claim, they can assist figure out.
Documentation and Calculation: ERC filing services will help in collecting the essential documentation, such as payroll records and monetary declarations, to support your claim. They will likewise help compute the credit amount based on qualified wages and other qualifying expenditures.
Retroactive Claim Review: If you are eligible to claim the ERC for previous quarters, these business can examine your previous payroll records and financials to recognize prospective chances for retroactive credits. They can help you modify previous tax returns to claim these refunds.
Filing Support: Companies specializing in ERC filings will prepare and submit the necessary types and documentation in your place. This consists of completing Form 941 or any other necessary tax forms.
Compliance and Updates: ERC regulations and assistance have developed gradually. These companies remain updated with the most recent modifications and ensure that your filings comply with the most existing standards. They can likewise provide ongoing support if the internal revenue service requests additional info or conducts an audit related to your ERC claim.
It is necessary to research and vet any company offering ERC filing help to ensure their credibility and know-how. Look for recognized companies with experience in tax and payroll services, or consider connecting to trusted accounting companies or tax professionals who offer ERC filing assistance.
Keep in mind that while these companies can provide important support, it’s constantly an excellent concept to have a basic understanding of the ERC requirements and process yourself. This will help you make informed choices and guarantee precise filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief steps. The goal of the ERC is to motivate companies to retain and pay their employees 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 eligible employers, consisting of for-profit businesses, tax-exempt organizations, and particular governmental entities. To qualify, employers need to meet one of two criteria:.
Business operations were fully or partially suspended due to a federal government order related to COVID-19.
The business experienced a substantial decrease in gross receipts. As discussed previously, for 2021, a significant decline is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity amounts to a portion (approximately 70%) of certified earnings paid to workers, consisting of specific health plan expenditures. 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, services that received an Income Defense Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 allows businesses to claim the ERC even if they received a PPP loan. The very same incomes can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and improved, permitting qualified employers to declare the credit for certified wages paid as far back as March 13, 2020. This retroactive arrangement offers a chance for organizations to modify prior-year income tax return and receive refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their employment income tax return, generally Form 941. The excess can be refunded to the company if the credit exceeds the amount of work taxes owed.
It is very important to keep in mind that the ERC provisions and eligibility criteria have developed over time. The best course of action is to seek advice from a tax professional or visit the official IRS website for the most updated and in-depth details concerning the ERC, including any current legislative changes or updates.
To receive the ERC, a business must satisfy one of the following criteria:.
Business operations were completely or partly suspended due to a government order related to COVID-19.
The business experienced a significant decrease in gross invoices. For 2021, a considerable decline is specified as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
The ERC is readily available to companies of all sizes, consisting of tax-exempt organizations, however there are some exceptions. For example, federal government entities and businesses that received a PPP loan may have limitations on declaring the credit.
The process for declaring the ERC includes finishing the essential forms and consisting of the credit on your work tax return (normally Form 941). The exact time it requires to process the credit can differ based on several elements, including the intricacy of your company and the work of the internal revenue service. It’s suggested to seek advice from a tax professional for guidance specific to your scenario.
There are several business that can aid with the procedure of declaring the ERC. These consist of accounting companies, tax advisory services, and payroll company. Some widely known companies that provide support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research and contact these companies directly to inquire about their charges and services.
Please keep in mind that the details supplied here is based upon basic knowledge and might not reflect the most recent updates or modifications to the ERC. It is necessary to seek advice from a tax expert or check out the official internal revenue service site for the most precise and current details regarding eligibility, declaring treatments, and available help.
Less than 100. The credit is based if the employer had 100 or less employees on average in 2019.
on incomes paid to all employees whether they in fact 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. The credit is if the employer had more than 100 staff members on average in 2019.
permitted just for incomes paid to workers who did not work throughout the calendar quarter.
In both cases, “wages” consists of not just money payments however also a part of the expense of employer.
provided healthcare. Employee Retention Credit S Corporation Shareholder
Companies can be immediately repaid for the credit by minimizing the quantity of payroll taxes they.