Lets talk first about 941 X For Employee Retention Credit :
Our team here what do these people doing everyone in this room is helping teach individuals about ERC and uh constantly supply a lovely breakfast and have individuals actually discover the program we should head to the room where we are able to display some of the checks that we are getting for business and I wish to see that what is this this is uh hundreds of millions of dollars actually Kevin numerous countless dollars so these are duplicate copies of the letters that go to customers confirming that the check is on the way I imply you know if you just start to 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 mean consider the number of real customers that went through the program yeah this is the very end this is the celebration at the end when the check is verified the numbers are validated and the check is on the mail in the mail from the internal revenue service heading to the customer so that’s how you have the ability to track it you understand when you
receive this you know the check is opted for sure and that’s when they pay so they don’t pay anything till they really receive the money 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 savings account and they can truly trust Wonder trust that the procedure has actually been completed and how many you think you’ve processed given that 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 need professionals 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 Wonderful here you’re at my YouTube channel we’re speaking about something truly essential today the staff member retention credit which the majority of you have actually never ever heard of I definitely hadn’t become aware of it up until extremely just recently and discovered a lot about it because this is most likely the most affordable expense of capital for any small business anywhere
anytime if you have employees in 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 Principles they’re the largest processor of these ERC credits this is a 170 page program so it’s not easy this isn’t like PPP we just phone your bank supervisor and say 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’ve become yes the Ambassador and paid representative for this I like this program it’s disappearing soon you got to discover all about it let’s talk worker 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 businesses three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody it makes a big difference right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the money cash payroll tax refund fine go on sorry I simply have to make sure we got that point I mean that’s a huge difference a loan versus money money I like money money that’s what we’re speaking about all right 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 original cares Act is the ERC and yes Kevin it is a stunning tough check in the mail where you get actual money from the IRS all right so let’s speak about how it works because it sounds like to me if it’s a if it’s staff member retention credit that person needed to be a staff member so I’m going to make the Assumption this money is not for the owner not for people on the cap table not for shareholders it’s for employees right you needed to have actually owned a business however it’s based on you having W-2 workers 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 eligible 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 6 quarters so you had quarters 2 3 and four of 2020 and you had quarters one two and 3 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 cash just how much can you return per worker that was on a W-2 in those 6 quarters so the computation in 2020 to be specific Kevin is 50 of the employee’s wage to an optimum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers increased to 70 of the worker’s wage to an optimum of seven thousand per quarter how did that occur um they simply altered the rules in.
2021 versus since 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 approximately 5 thousand Max and then what takes place 21 000 Max in 2021 oh that’s how you create twenty 6 thousand twenty one thousand to twenty twenty one plus five 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 money would have to be reduced from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would reduce the 26 000 so what we’re seeing on average Kevin is if you took PPP cash somewhere around 10 thousand dollars a person so let’s state 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 cash you would still get a million dollar in the mail from the internal revenue service so it’s huge certainly now the big question is why does no one learn about this due to the fact that appearance when I first became aware of this when I initially met Josh you know I have actually got lots of investments in great deals of business I’m a significant advocate for entrepreneurship in America and make many lots of financial investments in entrepreneurs of which many suffered through the pandemic when I first became aware of this I called BS I don’t think it because I use the PPP we went through the money center Banks to get it it was really 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 sensibly to stay alive throughout the pandemic so when I heard about this I stated nah it can’t be true but when I dug around I even called to my political leader friends Governor Senators they didn’t understand about it I indicate that’s how you understand that’s how misinformation is that there’s no information out there then a lot of people informed me well you can’t get it because you took the PPP also not true so let’s ask Josh why does no one understand about the employee retention credit you know 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 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 chaos because remember in the original cares act you could not do both programs so if you had actually done PPP you could refrain from doing ERC in the original program and when they changed the law in 2021 the banks were not doing ERC because it’s not alone so you’re getting a tax refund so the government never ever made it clear to anybody about how to.
do this does your CFO understand how to do this not truly she or he’s never done it before 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 business your accountant no your accountant’s never ever done this before unless you have an account that entered into this business and bottom line my company Kevin has been in business given that 2009 and we’ve been dealing with the federal government and the state federal government to recuperate money for Fortune 500 Fortune 1000 business so a lot of our huge big business clients have worked with bottom line to recover other federal government programs we have actually done sales tax and utilize tax joblessness tax work chance tax credits research and development tax credits unclaimed home real estate tax all of these other government programs.
The worker retention tax credit is a broad based refundable tax credit designed to motivate.
companies to keep staff members on their payroll. The credit is 50% of up to $10,000 in incomes paid by an.
Because of COVID-19 or whose gross receipts, company whose service is fully or partly suspended.
decrease by more than 50%.
1. The credit is readily available to all employers regardless of size consisting of tax exempt companies. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
services who take Small company Loans.
2. To certify, the company needs to satisfy one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s organization is totally or partially suspended by federal 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. As soon as the.
company’s gross receipts go above 80% of a comparable 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 salaries paid up to $10,000 in total.
It works for incomes paid after March 13th and before December 31, 2020.
The definition of qualifying earnings varies by whether an employer had, usually, more or less than.
100 staff members in 2019.
Companies that focus on ERC filing help normally provide proficiency and assistance to assist businesses navigate the intricate process of declaring the credit. They can provide numerous services, including:.
How is the employee retention credit calculated? 941 X For Employee Retention Credit
Eligibility Evaluation: These companies will evaluate your service’s eligibility for the ERC based upon elements such as your market, revenue, and operations. They can assist identify if you satisfy the requirements for the credit and determine the maximum credit quantity you can claim.
Paperwork and Estimation: ERC filing services will help in collecting the necessary documents, such as payroll records and monetary statements, to support your claim. They will also help determine the credit quantity based on eligible wages and other certifying expenditures.
Retroactive Claim Review: If you are qualified to claim the ERC for prior quarters, these business can examine your past payroll records and financials to determine possible opportunities for retroactive credits. They can assist you modify previous tax returns to claim these refunds.
Filing Support: Companies concentrating on ERC filings will prepare and send the necessary forms and paperwork in your place. This includes finishing Type 941 or any other necessary tax forms.
Compliance and Updates: ERC guidelines and assistance have developed in time. These companies stay upgraded with the most recent modifications and make sure that your filings adhere to the most existing standards. If the IRS requests extra info or performs an audit related to your ERC claim, they can also offer ongoing support.
It is necessary to research and veterinarian any company using ERC filing help to ensure their credibility and competence. Try to find established firms with experience in tax and payroll services, or think about reaching out to trusted accounting firms or tax professionals who offer ERC submitting assistance.
Keep in mind that while these business can provide valuable help, it’s always a good concept to have a basic understanding of the ERC requirements and process yourself. This will assist you make notified decisions and make sure precise filings.
The Worker Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief steps. The objective of the ERC is to encourage organizations to keep and pay their employees throughout the pandemic, even if their operations have actually been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to eligible companies, consisting of for-profit businesses, tax-exempt companies, and specific governmental entities. To certify, employers must satisfy one of two criteria:.
Business operations were totally or partly suspended due to a federal government order related to COVID-19.
The business experienced a significant decline in gross receipts. As discussed previously, for 2021, a considerable decline is specified as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decline in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross invoices compared to the right away 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 percentage (approximately 70%) of certified incomes paid to staff members, including certain health plan costs. 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: At first, services that received an Income Protection Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 enables organizations to declare the ERC even if they received a PPP loan. The same incomes can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and improved, enabling qualified companies to declare the credit for qualified salaries paid as far back as March 13, 2020. This retroactive arrangement provides an opportunity for companies to amend prior-year tax returns and receive refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their employment income tax return, usually Type 941. If the credit exceeds the amount of employment taxes owed, the excess can be refunded to the company.
It is necessary to keep in mind that the ERC arrangements and eligibility criteria have evolved over time. The best strategy is to seek advice from a tax expert or go to the main IRS site for the most current and comprehensive info concerning the ERC, including any recent legal changes or updates.
To qualify for the ERC, a company should meet among the following requirements:.
Business operations were totally or partially suspended due to a federal government order related to COVID-19.
Business experienced a significant decline in gross receipts. For 2021, a significant decrease is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decline in gross receipts compared to the exact same quarter in 2019, or a 20% decline in gross invoices compared to the immediately preceding quarter.
The ERC is offered to services of all sizes, consisting of tax-exempt companies, but there are some exceptions. For instance, government entities and organizations that got a PPP loan might have limitations on claiming the credit.
The procedure for claiming the ERC includes completing the required kinds and consisting of the credit on your employment tax return (generally Form 941). The exact time it requires to process the credit can differ based on a number of factors, including the intricacy of your service and the work of the IRS. It’s recommended to consult with a tax expert for guidance specific to your circumstance.
There are a number of companies that can help with the procedure of declaring the ERC. Some popular companies that provide help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the details supplied here is based on basic understanding and might not reflect the most recent updates or changes to the ERC. It’s important to consult with a tax professional or check out the main IRS site for the most accurate and current details regarding eligibility, declaring treatments, and available support.
Less than 100. If the company had 100 or fewer workers typically in 2019, then the credit is based.
on incomes paid to all staff members whether they really worked or not. In other words, even if the.
workers worked full time and got paid for full-time work, the employer still gets the credit.
Greater than 100. The credit is if the company had more than 100 employees on average in 2019.
allowed only for salaries paid to staff members who did not work during the calendar quarter.
In both cases, “earnings” consists of not just money payments however likewise a part of the expense of employer.
provided healthcare. 941 X For Employee Retention Credit
Employers can be immediately repaid for the credit by reducing the quantity of payroll taxes they.