Lets talk first about 941X Employee Retention Credit :
Our group here what do these people doing everyone in this room is helping teach individuals about ERC and uh constantly offer a stunning breakfast and have people truly learn about the program we must head to the room where we have the ability 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 hundreds of countless dollars literally Kevin numerous countless dollars so these are replicate copies of the letters that go to clients verifying that the check is on the method I mean you know if you simply start to look at a few 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 just I imply think about how many actual clients that went through the program yeah this is the very end this is the celebration 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
get this you understand the check is chosen 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 up until this letter is validated the check is on the way they transfer it into their savings account and they can genuinely trust Wonder trust that the process has been finished and how many you think you have actually 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 and that’s what you require 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 Terrific here you’re at my YouTube channel we’re speaking about something truly important today the worker retention credit which the majority of you have never become aware of I definitely hadn’t heard of it up until extremely recently and learned a lot about it since this is most likely the lowest expense of capital for any small company anywhere
anytime if you have employees in between 5 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 Ideas they’re the biggest processor of these ERC credits this is a 170 page program so it’s not easy this isn’t like PPP we just call up your bank supervisor and say provide me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to inform 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 enjoy this program it’s disappearing soon you got to discover everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just begin there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act offered businesses three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everyone it makes a huge difference right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
remedy the money money payroll tax refund all right go on sorry I just need to make certain we got that point I imply that’s a huge difference a loan versus money cash I like money cash that’s what we’re discussing 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 difficult check in the mail where you get actual cash from the IRS all right so let’s discuss how it works because it sounds like to me if it’s a if it’s staff member retention credit that person 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 investors it’s for workers right you needed to have actually owned an organization however it’s based on you having W-2 staff members in America not 10.99. As long as you had W-2 employees and you paid federal payroll taxes that’s why you would be eligible so you have 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 proper so there were six quarters the program was open well walk us through the 6 quarters so you had quarters 2 3 and 4 of 2020 and you had quarters one 2 and three of 2021. fine so that’s how it’s measured you need to be on the W-2 throughout that period 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 a maximum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s wage to an optimum of 7 thousand per quarter how did that take place um they simply changed the rules in.
2021 versus because the chaos 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 five thousand Max and after that what happens 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 worker that is because that’s a great deal of cash it is now there’s a caution here the PPP cash would need 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 typically Kevin is if you took PPP cash somewhere around 10 thousand dollars a person 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 money you would still get a million dollar in the mail from the internal revenue service so it’s big clearly now the big question is why does nobody understand about this due to the fact that look when I initially heard about this when I initially satisfied Josh you understand I have actually got great deals of financial investments in great deals of companies I’m a major advocate for entrepreneurship in America and make numerous lots of investments in business owners of which numerous suffered through the pandemic when I first heard about this I called BS I don’t believe it since I use the PPP we went through the cash center Banks to get it it was very easy to do we had our CEOs call the banks they got their loans which were well been worthy of and we used them sensibly 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 good friends Governor Senators they didn’t learn about it I mean that’s how you know that’s how false information is that there’s no details out there then a bunch of individuals told me well you can’t get it since you took the PPP likewise not true so let’s ask Josh why does no one understand about the staff member retention credit you understand what’s intriguing you’re speaking about the banks Kevin because in the PPP loan procedure the federal government made it really clear that if you desired 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 procedure process that’s all um and here there was turmoil due to the fact that remember in the initial cares act you could refrain from doing both programs so if you had actually done PPP you might not do 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 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 he or she’s never done it before do the banks do it nope the banks don’t do it the payroll business yeah a few 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 business and bottom line my firm Kevin has been in business given that 2009 and we have actually been working with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 companies so a great deal of our big big corporate clients have worked with bottom line to recover other federal government programs we’ve 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 government programs.
The worker retention tax credit is a broad based refundable tax credit designed to encourage.
employers to keep staff members on their payroll. The credit is 50% of up to $10,000 in earnings paid by an.
company whose service is fully or partially suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
1. The credit is available to all employers no matter size consisting of tax exempt companies. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) little.
companies who take Small Business Loans.
2. To certify, the employer has to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s company is completely or partially suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are listed below 50% of the comparable quarter in 2019. As soon as the.
employer’s gross invoices exceed 80% of a similar quarter in 2019 they no longer certify.
after the end of that quarter.
Computation of the Credit.
The quantity of the credit is 50% of the certifying salaries paid up to $10,000 in total.
It is effective for wages paid after March 13th and prior to December 31, 2020.
The meaning of qualifying incomes varies by whether an employer had, on average, more or less than.
100 employees in 2019.
Companies that focus on ERC filing assistance usually provide knowledge and assistance to assist services navigate the complex process of claiming the credit. They can offer various services, consisting of:.
How is the employee retention credit calculated? 941X Employee Retention Credit
Eligibility Assessment: These business will examine your business’s eligibility for the ERC based on factors such as your industry, income, and operations. They can help identify if you meet the requirements for the credit and determine the maximum credit amount you can declare.
Documentation and Estimation: ERC filing services will assist in gathering the essential documents, such as payroll records and financial declarations, to support your claim. They will also assist compute the credit amount based on eligible earnings and other qualifying expenditures.
Retroactive Claim Review: If you are qualified to claim the ERC for previous quarters, these companies can review your previous payroll records and financials to determine possible chances for retroactive credits. They can help you modify previous income tax return to declare these refunds.
Filing Assistance: Business specializing in ERC filings will prepare and send the needed kinds and paperwork on your behalf. This includes completing Type 941 or any other necessary tax return.
Compliance and Updates: ERC regulations and guidance have actually developed in time. These business remain updated with the most recent modifications and guarantee that your filings adhere to the most existing guidelines. They can likewise provide continuous assistance if the internal revenue service demands extra details or performs an audit related to your ERC claim.
It is necessary to research and vet any business providing ERC filing help to ensure their reliability and proficiency. Try to find recognized companies with experience in tax and payroll services, or consider reaching out to relied on accounting companies or tax experts who provide ERC filing assistance.
Remember that while these companies can offer valuable support, it’s constantly a good idea to have a standard understanding of the ERC requirements and procedure yourself. This will help you make notified choices and guarantee precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief measures. The objective of the ERC is to motivate services to retain and pay their staff members during the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to eligible companies, consisting of for-profit businesses, tax-exempt organizations, and specific governmental entities. To certify, companies need to fulfill one of two criteria:.
Business operations were fully or partly suspended due to a government order related to COVID-19.
Business experienced a considerable decrease in gross receipts. As pointed out earlier, for 2021, a significant decrease is specified as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a substantial decline is defined as a 20% decline in gross invoices 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 company’s share of Social Security taxes. The credit quantity amounts to a portion (up to 70%) of qualified salaries paid to workers, including particular health plan expenditures. The optimum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, businesses that got a Paycheck Security Program (PPP) loan were not eligible for the ERC. However, legislation passed in late 2020 and extended in 2021 allows businesses to declare the ERC even if they got a PPP loan. However, the very same earnings can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and improved, allowing qualified employers to claim the credit for certified incomes paid as far back as March 13, 2020. This retroactive arrangement offers an opportunity for companies to modify prior-year income tax return and receive refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their employment income tax return, generally Type 941. The excess can be refunded to the employer if the credit surpasses the amount of employment taxes owed.
It is necessary to note that the ERC provisions and eligibility criteria have developed in time. The best strategy is to speak with a tax professional or check out the official IRS site for the most in-depth and updated details regarding the ERC, consisting of any current legislative changes or updates.
To receive the ERC, an organization should satisfy among the following requirements:.
Business operations were fully or partly suspended due to a government order related to COVID-19.
The business experienced a significant decline in gross invoices. For 2021, a substantial decline is specified as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decline in gross receipts compared to the right away preceding quarter.
The ERC is offered to companies of all sizes, including tax-exempt organizations, however there are some exceptions. Government entities and services that got a PPP loan might have constraints on claiming the credit.
The procedure for claiming the ERC involves completing the necessary forms and consisting of the credit on your work income tax return (normally Type 941). The exact time it takes to process the credit can vary based upon numerous elements, consisting of the intricacy of your service and the work of the IRS. It’s recommended to talk to a tax professional for guidance specific to your scenario.
There are a number of business that can assist with the process of claiming the ERC. These include accounting companies, tax advisory services, and payroll provider. Some popular companies that use help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research study and call these companies directly to inquire about their costs and services.
Please keep in mind that the info supplied here is based on basic knowledge and may not show the most current updates or changes to the ERC. It is necessary to consult with a tax professional or go to the official IRS site for the most precise and updated info relating to eligibility, declaring treatments, and available assistance.
Less than 100. If the company had 100 or less workers typically in 2019, then the credit is based.
on wages paid to all employees whether they in fact worked or not. In other words, even if the.
employees worked full time and earned money for full time work, the company still gets the credit.
Greater than 100. The credit is if the employer had more than 100 workers on average in 2019.
enabled only for earnings paid to workers who did not work throughout the calendar quarter.
In both cases, “incomes” consists of not simply money payments but likewise a portion of the expense of company.
supplied healthcare. 941X Employee Retention Credit
Employers can be immediately reimbursed for the credit by minimizing the quantity of payroll taxes they.