Відео

Mr. Figueroa, thank you for your question. The church should be withholding PA taxes; if it hasn’t, it should move forward. A minister receiving a W-2 should report the PA wages on the PA return (s/b salary + housing allowance). The individual pays the PA taxes due with their return. If this is reoccurring, then the individual should pay PA quarterly estimated tax payments, so they don’t incur an underpayment penalty when filing.

Yes, they are.

We are anxiously awaiting further guidance from the IRS on the expanded “ERC” program. Our interpretation of the law itself would be: 1) yes, you should be eligible based on > 20% decline in either of 1st two quarters (it is applied on a quarter by quarter basis so need to look at each quarter separately) and 2) comparing Q1 2021 to Q12019 for the first quarter and comparing Q2 2021 to Q2 2019. However, there is a ‘safe harbor’ within the law that allows usage of the prior quarter instead; we interpret this to mean for Q1 2021 ERC you might be able to compare Q4 2020 to Q4 2019 and for Q2 2021 compare Q1 2021 to Q1 2019. Regarding 2020 retroactive credits, be mindful that another qualifier might be if your business operations were subject to full or partial suspension in accordance with a Government order. There is more information regarding this within the IRS FAQs at www.irs.gov/newsroom/covid-19-related-employee-retention-credits-general-information-faqs (note: as of 1/6/2021, these FAQ’s have not been updated for the new law).

@@troutcpa Thanks! Follow up question? I read that wages of family/relatives of owners are ineligible for the ERC credits? I am an employee of the business for over 20 years, and have been general manager for over 10 years. I am the son of the 100% shareholder owner. At this very moment, I am not a shareholder of the corporation. It is a small corp, 4 employees, S-Corp election. So, if we end up with 20% drop in gross receipts in, say, Q1 2021, compared to Q1 2019, my wages would not be eligible for the ERC credits? Because I am the son of the owner, although a legitimate employee? If so - He wants to make me majority shareholder anyway, so should we put a rush on that, just in case our revenues are down 20%? He takes very little pay from the company these days, compared to me, due to his less involvement.

This is correct as you have described it. See the “1/11/2021 Update” in the video’s description for full information. A full change in ownership is a significant event and will have other implications beyond ERC. You should consult with a tax advisor on your specific situation. If you are a Trout CPA client or interested in becoming one, please call 717-569-2900.

The Employee Retention Credit’s computational rules are unchanged for 2020. So the credit amount will remain at 50% of wages for 2020 and then increase to 70% in 2021. The only retroactive change to 2020 is the ability for PPP borrowers to now claim the Employee Retention Credit as well (but not on the same wages). The applicable section of the law [207(k)] states: “Effective Date - The amendments made by this section shall apply to calendar quarters beginning after December 31, 2020.”

Federal form 7200 and you fax it to IRS.

The Employee Retention Credit is claimed on Form 941 or 941X (amended) but can also be claimed in advance with a Form 7200 and later reconciled with the actual credit.

Owner's compensation is allowed although it is reported separately and limited in the forgiveness application. Owner's forgivable pay is the lesser of actual pay in the 8 weeks, $15,385 (8 weeks of the $100k limit), or the 8 weeks equivalent of their 2019 wages.

They are included but capped at lower of $100k or 2019 gross wages.

There is an "alternative" covered period.

@@cassandrakj Correct. However, at the 5:20 point on the video it is incorrectly stated that the regular Covered Period starts on the day AFTER funds are deposited. It starts on the day OF deposit. May not seem significant, but could cost the person thousands of dollars if they got it wrong.

That is correct - the normal covered period begins on the date of disbursement. The speaker misspoke.

We apologize for the inaccurate information. The covered period starts on the day you receive the funds not the day after.