Lets talk first about Would The Employee Retention Credit Apply To An S Corporation :
Our group here what do these guys doing everyone in this room is assisting teach individuals about ERC and uh always offer a stunning breakfast and have people actually learn about the program we need to head to the room where we have the ability to display a few of the checks that we are getting for companies and I wish to see that what is this this is uh numerous countless dollars actually Kevin numerous countless dollars so these are replicate copies of the letters that go to clients confirming that the check is on the method I suggest you understand if you simply start to look at some of these here I mean this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s simply I suggest consider 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 validated 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
receive this you know the check is chosen sure which’s when they pay so they don’t pay anything till they in fact get the cash they don’t pay bottom line Wonder trust anything up until this letter is confirmed the check is on the method they transfer it into their checking account and they can genuinely trust Wonder trust that the process has been finished and how many you believe you have actually processed because you started this we have to do with 35 000 of these for
about six billion dollars wow so clearly they understand what they’re doing which’s what you need you need experts 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 discussing something actually essential today the employee retention credit which the majority of you have never heard of I certainly had not become aware of it up until very recently and found out a lot about it because this is probably the most affordable expense of capital for any small business anywhere
anytime if you have employees between five and five hundred so I have actually got the specialist 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 just call up 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 tell all of us about it and how to get it and why I have actually become yes the Ambassador and paid representative for this I enjoy this program it’s disappearing soon you got to learn all 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 developed the cares Act and the cares act offered 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 exactly so the ERC is a refund that’s.
correct the money money payroll tax refund fine go on sorry I simply have to ensure we got that point I indicate that’s a big distinction a loan versus money cash I like cash money that’s what we’re speaking about 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 beautiful tough check in the mail where you get actual 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 employee retention credit that individual had to be a staff member 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 an organization but it’s based on you having W-2 employees 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 qualified 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 6 quarters the program was open well walk us through the six quarters so you had quarters 2 three and four of 2020 and you had quarters one 2 and three of 2021. okay so that’s how it’s measured you have 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 staff member that was on a W-2 in those 6 quarters so the calculation in 2020 to be exact Kevin is 50 of the worker’s wage to an optimum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers increased to 70 of the staff member’s wage to a maximum of 7 thousand per quarter how did that occur um they just altered the rules in.
2021 versus due to the fact that the mayhem of the pandemic so they wanted to even get more to keep those staff members on payroll 100 so if you can get 5 000 per person Max in twenty that was 50 in 2020 approximately 5 thousand Max and then what occurs 21 000 Max in 2021 oh that’s how you come up with 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 caution here the PPP cash would have to be decreased from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would lower the 26 000 so what we’re seeing usually Kevin is if you took PPP cash someplace 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 workers and you took PPP money you would still get a million dollar in the mail from the IRS so it’s substantial clearly now the huge concern is why does nobody learn about this since look when I first found out about this when I first satisfied Josh you understand I have actually got lots of investments in great deals of companies I’m a significant advocate for entrepreneurship in America and make lots of many investments in entrepreneurs of which numerous suffered through the pandemic when I initially found out about this I called BS I don’t think it since I utilize 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 been worthy of and we utilized them wisely to survive throughout the pandemic so when I heard about this I said nah it can’t hold true but when I dug around I even contacted us to my political leader buddies Guv Senators they didn’t understand about it I indicate 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 also not true so let’s ask Josh why does no one learn about the staff member retention credit you understand what’s interesting you’re speaking about the banks Kevin due to the fact that 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 nation and they would process procedure 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 mayhem due to the fact that keep in mind in the original 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 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 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 in the past 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 company your accounting professional no your accountant’s never ever done this prior to unless you have an account that entered into this company and bottom line my company Kevin has actually stayed in business considering that 2009 and we have actually been dealing with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 companies so a great deal of our big huge corporate customers have actually dealt with bottom line to recuperate other federal government programs we have actually done sales tax and utilize tax unemployment tax work chance tax credits research and development tax credits unclaimed property 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 approximately $10,000 in salaries paid by an.
employer whose service is totally or partially suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
1. The credit is available to all employers despite size including tax exempt companies. There are.
just two exceptions: (1) state and city governments and their instrumentalities and (2) small.
companies who take Small Business Loans.
2. To qualify, the employer needs to satisfy one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s service is totally 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 go above 80% of a similar quarter in 2019 they no longer certify.
after completion of that quarter.
Computation of the Credit.
The quantity of the credit is 50% of the qualifying incomes paid up to $10,000 in overall.
It works for earnings paid after March 13th and before December 31, 2020.
The meaning of certifying salaries varies by whether an employer had, typically, more or less than.
100 employees in 2019.
Business that focus on ERC filing help usually supply knowledge and support to help businesses navigate the complex procedure of claiming the credit. They can use various services, including:.
How is the employee retention credit calculated? Would The Employee Retention Credit Apply To An S Corporation
Eligibility Assessment: These business will assess your service’s eligibility for the ERC based on aspects such as your industry, profits, and operations. If you satisfy the requirements for the credit and recognize the optimum credit quantity you can claim, they can help figure out.
Documents and Computation: ERC filing services will assist in collecting the required documentation, such as payroll records and financial statements, to support your claim. They will also assist determine the credit quantity based upon eligible incomes and other certifying costs.
Retroactive Claim Review: If you are qualified to claim the ERC for previous quarters, these business can evaluate your previous payroll records and financials to identify prospective chances for retroactive credits. They can assist you amend prior tax returns to claim these refunds.
Filing Help: Business concentrating on ERC filings will prepare and submit the required kinds and documents in your place. This includes finishing Kind 941 or any other required tax return.
Compliance and Updates: ERC policies and assistance have developed over time. These business stay upgraded with the latest changes and make sure that your filings abide by the most existing standards. They can likewise offer continuous assistance if the internal revenue service requests additional info or carries out an audit related to your ERC claim.
It is very important to research and veterinarian any company offering ERC filing assistance to guarantee their trustworthiness and expertise. Search for established companies with experience in tax and payroll services, or consider connecting to trusted accounting companies or tax experts who provide ERC submitting assistance.
Keep in mind that while these companies can supply important assistance, it’s constantly a great idea to have a fundamental understanding of the ERC requirements and process yourself. This will help you make informed decisions and make sure accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief steps. The objective of the ERC is to motivate organizations to keep and pay their workers during the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to eligible employers, including for-profit companies, tax-exempt companies, and certain governmental entities. To qualify, employers must meet one of two criteria:.
Business operations were completely or partially suspended due to a federal government order related to COVID-19.
The business experienced a significant decrease in gross receipts. As pointed out previously, for 2021, a considerable decline is defined as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross invoices compared to the immediately preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount amounts to a portion (approximately 70%) of qualified wages paid to employees, including specific health plan expenses. The maximum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, companies that got a Paycheck Protection Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 allows companies to declare the ERC even if they received a PPP loan. However, the same salaries can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively expanded and boosted, permitting eligible employers to declare the credit for qualified wages paid as far back as March 13, 2020. This retroactive provision offers an opportunity for services to change prior-year tax returns and get refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their employment income tax return, typically Type 941. If the credit surpasses the quantity of work taxes owed, the excess can be reimbursed to the employer.
It is very important to keep in mind that the ERC arrangements and eligibility requirements have evolved with time. The very best course of action is to speak with a tax expert or go to the official IRS site for the most current and in-depth information regarding the ERC, consisting of any recent legislative changes or updates.
To qualify for the ERC, a business should meet one of the following requirements:.
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. For 2021, a considerable decline is defined as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the right away preceding quarter.
The ERC is readily available to companies of all sizes, consisting of tax-exempt organizations, but there are some exceptions. Federal government entities and businesses that got a PPP loan may have constraints on declaring the credit.
The process for declaring the ERC involves finishing the needed types and consisting of the credit on your employment tax return (usually Type 941). The exact time it requires to process the credit can differ based upon a number of elements, including the complexity of your organization and the workload of the IRS. It’s recommended to speak with a tax expert for assistance particular to your scenario.
There are several business that can assist with the procedure of claiming the ERC. Some well-known companies that use assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the info offered here is based upon general understanding and might not reflect the most current updates or modifications to the ERC. It is essential to consult with a tax expert or visit the main IRS website for the most updated and precise information regarding eligibility, claiming procedures, and offered assistance.
Less than 100. If the company had 100 or fewer employees usually in 2019, then the credit is based.
on salaries paid to all employees whether they really worked or not. In other words, 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 staff members who did not work throughout the calendar quarter.
In both cases, “incomes” consists of not just cash payments but also a portion of the expense of company.
provided health care. Would The Employee Retention Credit Apply To An S Corporation
Employers can be immediately reimbursed for the credit by lowering the amount of payroll taxes they.