Lets talk first about 941 X Employee Retention Credit Example :
Our team here what do these people doing everybody in this space is helping teach individuals about ERC and uh always provide a stunning breakfast and have individuals really learn about the program we should head to the room where we are able to show some of the checks that we are getting for business and I ‘d like to see that what is this this is uh numerous countless dollars actually Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to clients validating that the check is on the method I mean you understand if you simply begin to take a look at a few of these here I suggest this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s simply I imply think of the number of 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 confirmed and the check is on the mail in the mail from the IRS heading to the consumer so that’s how you have the ability to track it you know when you
receive this you know the check is gone for sure and that’s when they pay so they do not pay anything until they really receive the cash they don’t pay bottom line Wonder trust anything until this letter is validated the check is on the way they deposit it into their checking account and they can truly trust Wonder trust that the procedure has actually been ended up and the number of you believe you have actually processed given that you began this we’re about 35 000 of these for
about six billion dollars wow so plainly they know what they’re doing and that’s what you require you need experts 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 Terrific here you’re at my YouTube channel we’re discussing something actually important today the staff member retention credit which most of you have never become aware of I definitely had not become aware of it till extremely just recently and found out a lot about it because this is probably the most affordable cost of capital for any small business anywhere
anytime if you have staff members between 5 and five hundred so I’ve got the expert with me this is Josh Fox he’s the founder and CEO of bottom line Principles they’re the largest processor of these ERC credits this is a 170 page program so it’s hard this isn’t like PPP we simply call your bank supervisor and say offer me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to inform all of us about it and how to get it and why I have actually become yes the Ambassador and paid spokesperson for this I love this program it’s disappearing soon you got to find out all about it let’s talk employee retention credit Josh Fox what is an ERC let’s just start there so during the Trump Administration when President Trump was enacted they created the cares Act and the cares act offered organizations 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically 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.
remedy the cash money payroll tax refund all right go on sorry I simply have to make sure we got that point I imply that’s a huge distinction a loan versus cash money I like cash cash that’s what we’re talking about alright 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 real cash from the IRS all right so let’s discuss how it works since it sounds 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 Presumption this cash is not for the owner not for individuals on the cap table not for shareholders it’s for staff members 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 staff members 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 correct so there were six quarters the program was open well walk us through the six quarters so you had quarters two three and 4 of 2020 and you had quarters one two and 3 of 2021. alright so that’s how it’s determined you have to be on the W-2 throughout that duration now let’s talk my favorite part cash just how much can you get back per worker that was on a W-2 in those six quarters so the computation in 2020 to be exact Kevin is 50 of the employee’s wage to a maximum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers escalated to 70 of the employee’s salary to an optimum of seven thousand per quarter how did that happen um they just altered the rules in.
2021 versus due to the fact that the turmoil 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 up to five thousand Max and after that 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 five thousand in twenty twenty that’s twenty 6 thousand dollars per employee that is since that’s a great deal of cash it is now there’s a caveat here the PPP cash would need to be minimized from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would minimize 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 say hypothetically you owned a restaurant in New York 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 undoubtedly now the huge concern is why does no one learn about this since appearance when I initially became aware of this when I initially fulfilled Josh you understand I’ve got great deals of financial investments in lots of business I’m a significant advocate for entrepreneurship in America and make lots of many financial 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 since I utilize the PPP we went through the cash 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 been worthy of and we used them wisely to survive 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 pals Governor Senators they didn’t understand about it I mean that’s how you know that’s how false information is that there’s no information out there then a lot of people told me well you can’t get it since you took the PPP likewise not true so let’s ask Josh why does nobody understand about the staff member retention credit you understand what’s interesting you’re speaking 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 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 process that’s all um and here there was mayhem since remember in the initial cares act you could not do both programs so if you had actually done PPP you might refrain from doing ERC in the original 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 anyone about how to.
do this does your CFO know how to do this not really he or she’s never done it previously do the banks do it nope the banks don’t do it the payroll business yeah some of them are doing it as a payroll business your accounting professional no your accountant’s never done this prior to unless you have an account that entered into this organization and bottom line my firm Kevin has actually been in business given that 2009 and we have actually been working with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 companies so a great deal of our huge huge business clients have actually worked with bottom line to recuperate other government programs we have actually done sales tax and use tax joblessness tax work opportunity tax credits research and development tax credits unclaimed home real estate tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit designed to motivate.
companies to keep workers on their payroll. The credit is 50% of as much as $10,000 in wages paid by an.
employer whose business is totally or partially suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
1. The credit is available to all companies no matter size consisting of tax exempt organizations. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
companies who take Small company Loans.
2. To qualify, the company needs to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s organization is fully or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the similar quarter in 2019. Once the.
employer’s gross receipts go above 80% of an equivalent quarter in 2019 they no longer qualify.
after completion of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the certifying wages paid up to $10,000 in total.
It works for salaries paid after March 13th and prior to December 31, 2020.
The definition of qualifying salaries varies by whether an employer had, usually, basically than.
100 employees in 2019.
Business that concentrate on ERC filing assistance normally supply knowledge and support to assist businesses navigate the intricate procedure of claiming the credit. They can provide various services, including:.
How is the employee retention credit calculated? 941 X Employee Retention Credit Example
Eligibility Assessment: These business will examine your business’s eligibility for the ERC based on elements such as your market, profits, and operations. They can assist determine if you meet the requirements for the credit and determine the optimum credit amount you can claim.
Documentation and Computation: ERC filing services will help in collecting the necessary documentation, such as payroll records and monetary declarations, to support your claim. They will likewise assist compute the credit amount based upon qualified wages and other certifying expenses.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for prior quarters, these business can evaluate your past payroll records and financials to determine prospective opportunities for retroactive credits. They can help you amend prior income tax return to declare these refunds.
Filing Assistance: Business concentrating on ERC filings will prepare and submit the needed types and documentation on your behalf. This consists of finishing Kind 941 or any other required tax forms.
Compliance and Updates: ERC policies and assistance have actually developed gradually. These companies stay updated with the latest changes and make sure that your filings comply with the most existing guidelines. If the IRS demands additional information or conducts an audit associated to your ERC claim, they can also supply ongoing assistance.
It is essential to research and vet any company offering ERC filing support to ensure their reliability and proficiency. Try to find recognized companies with experience in tax and payroll services, or think about connecting to trusted accounting companies or tax experts who provide ERC filing support.
Remember that while these companies can provide important assistance, it’s constantly a great concept to have a standard understanding of the ERC requirements and procedure yourself. This will help you make informed decisions and guarantee accurate filings.
The Worker Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief procedures. The goal of the ERC is to motivate services to keep and pay their staff members during the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to qualified employers, consisting of for-profit companies, tax-exempt companies, and certain governmental entities. To qualify, employers need to satisfy one of two requirements:.
The business operations were fully or partly suspended due to a federal government order related to COVID-19.
Business experienced a considerable decrease in gross invoices. As discussed earlier, for 2021, a significant decrease is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a substantial decrease is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decline in gross receipts compared to the immediately preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity is equal to a percentage (up to 70%) of certified salaries paid to workers, consisting of particular 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: At first, businesses that got a Paycheck Protection Program (PPP) loan were not eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 permits services to declare the ERC even if they got a PPP loan. Nevertheless, 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 broadened and boosted, enabling eligible employers to declare the credit for qualified salaries paid as far back as March 13, 2020. This retroactive arrangement provides a chance for companies to modify prior-year tax returns and get refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their employment income tax return, generally Type 941. The excess can be reimbursed to the employer if the credit exceeds the quantity of employment taxes owed.
It is essential to note that the ERC arrangements and eligibility requirements have evolved over time. The very best course of action is to consult with a tax expert or go to the main IRS website for the most detailed and current info concerning the ERC, consisting of any recent legislative modifications or updates.
To get approved for the ERC, a company must fulfill one of the following requirements:.
Business operations were fully or partly suspended due to a government order related to COVID-19.
Business experienced a considerable decline in gross invoices. For 2021, a considerable decline is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decrease is specified as a 20% decline in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
The ERC is readily available to services of all sizes, including tax-exempt organizations, but there are some exceptions. For instance, government entities and organizations that got a PPP loan may have limitations on claiming the credit.
The procedure for claiming the ERC includes completing the essential kinds and consisting of the credit on your work income tax return (usually Form 941). The exact time it takes to process the credit can differ based on several elements, including the intricacy of your business and the work of the internal revenue service. It’s suggested to speak with a tax professional for assistance particular to your circumstance.
There are several business that can assist with the process of declaring the ERC. Some well-known companies that use assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the details supplied here is based on basic knowledge and may not show the most current updates or modifications to the ERC. It is essential to consult with a tax professional or go to the main IRS site for the most current and accurate details concerning eligibility, declaring treatments, and readily available assistance.
Less than 100. If the company had 100 or fewer employees on average in 2019, then the credit is based.
on salaries paid to all employees whether they really worked or not. To put it simply, even if the.
staff members worked full time and made money for full time work, the company still gets the credit.
Greater than 100. If the employer had more than 100 staff members typically in 2019, then the credit is.
permitted only for wages paid to staff members who did not work during the calendar quarter.
In both cases, “salaries” consists of not just money payments but likewise a part of the expense of employer.
offered healthcare. 941 X Employee Retention Credit Example
Employers can be instantly repaid for the credit by reducing the quantity of payroll taxes they.