Lets talk first about Employee Retention Credit 2021 S Corp Owner :
Our team here what do these guys doing everyone in this space is helping teach people about ERC and uh constantly offer a gorgeous breakfast and have people actually learn about the program we must head to the space 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 hundreds of countless dollars actually Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to clients verifying that the check is on the way I suggest you know if you just begin 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 mean it’s simply I indicate consider how many real customers 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 validated and the check is on the mail in the mail from the internal revenue service heading to the client so that’s how you’re able to track it you know when you
get this you know the check is chosen sure which’s when they pay so they do not pay anything till they actually receive the money 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 genuinely trust Wonder trust that the procedure has actually been ended up and the number of you believe you’ve processed because you started this we’re about 35 000 of these for
about six billion dollars wow so clearly they understand what they’re doing which’s what you need 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 Fantastic here you’re at my YouTube channel we’re speaking about something actually important today the worker retention credit which most of you have never become aware of I definitely hadn’t heard of it up until really recently and found out a lot about it due to the fact that this is probably the most affordable cost of capital for any small company anywhere
anytime if you have staff members between 5 and five hundred so I have actually got the specialist with me this is Josh Fox he’s the founder and CEO of bottom line Principles they’re the biggest processor of these ERC credits this is a 170 page program so it’s hard this isn’t like PPP we just contact your bank manager and say offer me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to tell 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 love this program it’s disappearing very soon you got to find out everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply begin there so during the Trump Administration when President Trump was enacted they developed 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 practically everyone it makes a big distinction right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the money money payroll tax refund all right go on sorry I just have to make certain we got that point I suggest that’s a big distinction a loan versus money money I like money cash that’s what we’re talking about fine 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 actual cash from the internal revenue service all right so let’s speak about how it works since it sounds like to me if it’s a if it’s employee retention credit that person had to be a worker so I’m going to make the Assumption this money is not for the owner not for people on the cap table not for investors it’s for staff members right you needed to have owned a business however 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 need 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 walk us through the 6 quarters so you had quarters two three and four of 2020 and you had quarters one two and three of 2021. alright so that’s how it’s measured you have to be on the W-2 throughout that period now let’s talk my preferred part cash just how much can you return per employee that was on a W-2 in those six quarters so the estimation in 2020 to be precise Kevin is 50 of the employee’s salary to a maximum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s salary to an optimum of 7 thousand per quarter how did that occur um they simply altered the rules in.
2021 versus because the turmoil of the pandemic so they wished 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 up to five 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 6 thousand dollars per worker 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 minimized from the twenty six thousand dollars so if you took PPP loan one and PPP loan 2 you would minimize the 26 000 so what we’re seeing typically 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 employees and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s substantial obviously now the huge concern is why does nobody learn about this because look when I initially became aware of this when I initially fulfilled 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 lots of lots of financial investments in entrepreneurs of which many suffered through the pandemic when I first found out about this I called BS I do not believe it because 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 and that were well should have and we utilized them sensibly to survive throughout the pandemic so when I became aware of this I stated nah it can’t be true however when I dug around I even called to my political leader pals Governor Senators they didn’t learn about it I suggest that’s how you understand that’s how misinformation is that there’s no information out there then a lot of individuals told me well you can’t get it because you took the PPP also not true so let’s ask Josh why does nobody understand about the employee retention credit you understand what’s interesting you’re speaking about the banks Kevin due to the fact that in the PPP loan process the federal government made it extremely 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 process process that’s all um and here there was chaos since keep in mind in the original cares act you could refrain from doing both programs so if you had 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 since it’s not alone so you’re getting a tax refund so the federal government never ever made it clear to any person about how to.
do this does your CFO know how to do this not really she or he’s never done it previously do the banks do it nope the banks don’t do it the payroll companies yeah a few 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 service and bottom line my company Kevin has been in business since 2009 and we’ve been working with the federal government and the state federal government to recuperate money for Fortune 500 Fortune 1000 companies so a great deal of our huge big business clients have worked with bottom line to recuperate other government programs we have actually done sales tax and use tax unemployment tax work opportunity tax credits research and development tax credits unclaimed property real estate tax all of these other federal government programs.
The worker 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 up to $10,000 in wages paid by an.
Because of COVID-19 or whose gross receipts, company whose service is fully or partially suspended.
decrease by more than 50%.
1. The credit is readily available to all employers regardless of size including tax exempt organizations. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) small.
organizations 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 company’s company is totally or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross receipts are below 50% of the comparable quarter in 2019. When the.
company’s gross invoices go above 80% of a comparable quarter in 2019 they no longer certify.
after completion of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the qualifying earnings paid up to $10,000 in total.
It is effective for incomes paid after March 13th and prior to December 31, 2020.
The definition of qualifying incomes differs by whether an employer had, on average, more or less than.
100 employees in 2019.
Companies that specialize in ERC filing help normally supply knowledge and assistance to assist companies browse the intricate procedure of claiming the credit. They can provide numerous services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit 2021 S Corp Owner
Eligibility Evaluation: These business will examine your company’s eligibility for the ERC based on factors such as your industry, income, and operations. If you satisfy the requirements for the credit and determine the maximum credit amount you can claim, they can help determine.
Paperwork and Computation: ERC filing services will help in gathering the necessary documents, such as payroll records and financial statements, to support your claim. They will likewise assist calculate the credit quantity based on qualified wages and other certifying costs.
Retroactive Claim Review: If you are eligible to declare the ERC for previous quarters, these business can evaluate your past payroll records and financials to identify possible opportunities for retroactive credits. They can assist you modify previous tax returns to claim these refunds.
Filing Help: Companies specializing in ERC filings will prepare and submit the needed kinds and paperwork in your place. This includes finishing Kind 941 or any other necessary tax return.
Compliance and Updates: ERC guidelines and assistance have developed in time. These business stay upgraded with the most recent changes and ensure that your filings abide by the most current guidelines. If the Internal revenue service requests extra information or carries out an audit related to your ERC claim, they can also supply ongoing assistance.
It is essential to research and veterinarian any company using ERC filing support to guarantee their credibility and expertise. Look for recognized companies with experience in tax and payroll services, or consider connecting to trusted accounting firms or tax specialists who use ERC submitting assistance.
Keep in mind that while these companies can supply important assistance, it’s always an excellent idea to have a standard understanding of the ERC requirements and process yourself. This will help you make informed choices and ensure 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 procedures. The goal of the ERC is to motivate businesses to keep and pay their staff members throughout the pandemic, even if their operations have been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is available to qualified companies, including for-profit businesses, tax-exempt organizations, and certain governmental entities. To certify, employers must satisfy one of two requirements:.
Business operations were completely or partially suspended due to a government order related to COVID-19.
The business experienced a significant decline in gross invoices. As mentioned previously, for 2021, a substantial decrease is specified as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decline in gross invoices compared to the same quarter in 2019, or a 20% decline in gross invoices compared to the instantly preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit quantity is equal to a portion (as much as 70%) of certified wages paid to employees, consisting of specific health plan costs. The maximum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, companies that received a Paycheck Protection Program (PPP) loan were not eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 allows businesses to declare 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 Arrangement: The ERC has been retroactively expanded and boosted, permitting qualified companies to claim the credit for certified incomes paid as far back as March 13, 2020. This retroactive arrangement offers a chance for companies to amend prior-year income tax return and get refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their employment income tax return, generally Kind 941. If the credit exceeds the quantity of work taxes owed, the excess can be refunded to the company.
It is very important to note that the ERC provisions and eligibility criteria have actually developed over time. The best course of action is to talk to a tax professional or go to the main internal revenue service website for the most in-depth and current details relating to the ERC, including any recent legal modifications or updates.
To qualify for the ERC, a service should meet one of the following requirements:.
The business operations were totally or partially suspended due to a federal government order related to COVID-19.
Business experienced a substantial decrease in gross invoices. For 2021, a significant decrease is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross invoices compared to the right away preceding quarter.
The ERC is readily available to businesses of all sizes, including tax-exempt organizations, but there are some exceptions. Government entities and organizations that received a PPP loan may have limitations on claiming the credit.
The procedure for declaring the ERC includes finishing the essential forms and including the credit on your work 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 intricacy of your service and the work of the IRS. It’s recommended to consult with a tax professional for guidance particular to your circumstance.
There are numerous business that can assist with the process of claiming the ERC. Some widely known business that use support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the information supplied here is based on general knowledge and might not reflect the most current updates or modifications to the ERC. It is essential to consult with a tax professional or check out the official internal revenue service website for the most accurate and up-to-date details regarding eligibility, declaring treatments, and offered assistance.
Less than 100. The credit is based if the company had 100 or fewer staff members on average in 2019.
on wages paid to all employees whether they in fact worked or not. To put it simply, even if the.
staff members 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 typically in 2019, then the credit is.
permitted only for wages paid to staff members who did not work throughout the calendar quarter.
In both cases, “earnings” includes not just money payments but also a portion of the cost of employer.
provided health care. Employee Retention Credit 2021 S Corp Owner
Companies can be immediately compensated for the credit by lowering the amount of payroll taxes they.