Lets talk first about Employee Retention Credit Form 941 X :
Our group here what do these people doing everybody in this space is assisting teach people about ERC and uh constantly provide a lovely breakfast and have people really discover the program we ought to head to the room where we are able to show a few of the checks that we are getting for companies and I wish 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 way I mean you understand if you simply start to take a look at a few of these here I indicate this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s simply I imply consider how many actual clients that went through the program yeah this is the very end this is the party at the end when the check is verified the numbers are verified and the check is on the mail in the mail from the internal revenue service heading to the consumer so that’s how you’re able to track it you understand when you
receive this you understand the check is chosen sure and that’s when they pay so they don’t pay anything until they really receive the cash they don’t pay bottom line Wonder trust anything till this letter is confirmed the check is on the way they transfer it into their savings account and they can truly trust Wonder trust that the process has been completed and how many you believe you’ve processed considering that you began this we have to do with 35 000 of these for
about 6 billion dollars wow so clearly they understand 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 among these that’s what matters all right Mr Wonderful here you’re at my YouTube channel we’re speaking about something really crucial today the staff member retention credit which most of you have actually never become aware of I certainly hadn’t become aware of it till very recently and found out a lot about it because this is most likely the most affordable cost of capital for any small business anywhere
anytime if you have staff members between five and five hundred so I’ve got the specialist with me this is Josh Fox he’s the creator and CEO of bottom line Concepts they’re the biggest processor of these ERC credits this is a 170 page program so it’s challenging this isn’t like PPP we just call up 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 tell us all about it and how to get it and why I have actually become yes the Ambassador and paid representative for this I love this program it’s going away very soon you got to find out everything about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply begin there so throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act provided businesses 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everybody it makes a big distinction right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the cash cash payroll tax refund fine go on sorry I just need to make sure we got that point I indicate that’s a big difference a loan versus money money I like money cash that’s what we’re speaking 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 lovely difficult check in the mail where you get real money from the internal revenue service 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 individual needed to be a staff member so I’m going to make the Presumption this cash is not for the owner not for people on the cap table not for investors it’s for employees right you had to have actually owned a business however it’s based upon 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 qualified so you have 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 appropriate so there were six quarters the program was open well walk us through the six quarters so you had quarters 2 3 and four of 2020 and you had quarters one 2 and 3 of 2021. fine so that’s how it’s measured you need to be on the W-2 during that duration 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 computation in 2020 to be precise Kevin is 50 of the worker’s salary to an optimum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers increased to 70 of the employee’s income to a maximum of seven thousand per quarter how did that happen um they simply changed 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 workers on payroll 100 so if you can get 5 000 per person Max in twenty that was 50 in 2020 as much as 5 thousand Max and after that 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 5 thousand in twenty twenty that’s twenty 6 thousand dollars per worker that is since that’s a great deal of cash it is now there’s a caution here the PPP cash would need to be minimized from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would minimize the 26 000 so what we’re seeing on average Kevin is if you took PPP cash somewhere around 10 thousand dollars an individual so let’s state hypothetically you owned a dining establishment 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 IRS so it’s substantial certainly now the big question is why does no one understand about this due to the fact that look when I initially heard about this when I first met Josh you know I’ve got great deals of investments in great deals of business I’m a significant advocate for entrepreneurship in America and make lots of many financial investments in entrepreneurs of which lots of 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 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 wisely to stay alive during the pandemic so when I became aware of this I said nah it can’t be true but when I dug around I even called to my politician good friends Governor Senators they didn’t learn about it I suggest that’s how you know that’s how false information is that there’s no details out there then a lot of individuals told me well you can’t get it because you took the PPP likewise not true so let’s ask Josh why does no one know about the staff member retention credit you know what’s interesting you’re talking about the banks Kevin because in the PPP loan procedure 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 process 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 might not do 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 refraining from doing ERC since it’s not alone so you’re getting a tax refund so the federal government never made it clear to anybody about how to.
do this does your CFO know how to do this not actually she or he’s never done it previously 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 company your accountant no your accountant’s never done this prior to unless you have an account that went into this service and bottom line my firm Kevin has actually been in business because 2009 and we’ve been dealing with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 companies so a lot of our big big corporate customers have dealt with bottom line to recover other government programs we have actually done sales tax and use tax unemployment tax work opportunity tax credits research and development tax credits unclaimed home real estate tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit designed to motivate.
companies to keep employees on their payroll. The credit is 50% of approximately $10,000 in incomes paid by an.
Due to the fact that of COVID-19 or whose gross invoices, company whose service is fully or partially suspended.
decline by more than 50%.
Schedule.
1. The credit is available to all employers no matter size including tax exempt organizations. There are.
just two exceptions: (1) state and city governments and their instrumentalities and (2) little.
businesses who take Small Business Loans.
2. To qualify, the employer has to satisfy one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s company is fully or partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross invoices are below 50% of the similar quarter in 2019. As soon as the.
employer’s gross receipts go above 80% of a comparable quarter in 2019 they no longer qualify.
after the end of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the certifying incomes paid up to $10,000 in overall.
It is effective for earnings paid after March 13th and prior to December 31, 2020.
The definition of qualifying earnings differs by whether a company had, typically, more or less than.
100 workers in 2019.
Companies that focus on ERC filing help usually supply proficiency and support to help services navigate the complicated procedure of claiming the credit. They can use different services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Form 941 X
Eligibility Assessment: These business will examine your business’s eligibility for the ERC based upon aspects such as your market, income, and operations. They can assist determine if you fulfill the requirements for the credit and recognize the maximum credit quantity you can claim.
Documents and Estimation: ERC filing services will assist in gathering the essential documentation, such as payroll records and financial statements, to support your claim. They will likewise help compute the credit amount based upon qualified earnings and other qualifying expenditures.
Retroactive Claim Review: If you are eligible to declare the ERC for previous quarters, these business can review your previous payroll records and financials to determine possible chances for retroactive credits. They can assist you modify prior income tax return to claim these refunds.
Filing Support: Companies concentrating on ERC filings will prepare and send the necessary kinds and documents in your place. This consists of finishing Type 941 or any other necessary tax return.
Compliance and Updates: ERC policies and assistance have actually evolved over time. These business stay upgraded with the current changes and ensure that your filings comply with the most present standards. They can also provide ongoing assistance if the IRS demands extra info or conducts an audit related to your ERC claim.
It is essential to research and vet any company providing ERC filing support to ensure their credibility and know-how. Look for recognized firms with experience in tax and payroll services, or think about connecting to trusted accounting companies or tax experts who provide ERC filing assistance.
Keep in mind that while these companies can provide valuable assistance, it’s always a good idea to have a basic understanding of the ERC requirements and procedure yourself. This will assist you make notified decisions and guarantee precise 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 companies to maintain and pay their staff members during the pandemic, even if their operations have been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to eligible companies, consisting of for-profit companies, tax-exempt companies, and particular governmental entities. To certify, companies should meet one of two requirements:.
Business operations were totally or partially suspended due to a government order related to COVID-19.
Business experienced a substantial decrease in gross receipts. As mentioned earlier, 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 considerable decrease is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019, or a 20% decrease 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 amounts to a percentage (approximately 70%) of qualified wages paid to workers, consisting of certain health plan expenses. The optimum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, businesses that received a Paycheck Security Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 enables services to claim the ERC even if they received a PPP loan. The exact same wages can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively broadened and enhanced, permitting eligible employers to declare the credit for certified incomes paid as far back as March 13, 2020. This retroactive provision 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 tax returns, generally Kind 941. If the credit surpasses the quantity of work taxes owed, the excess can be reimbursed to the employer.
It is essential to note that the ERC provisions and eligibility requirements have developed with time. The very best course of action is to talk to a tax professional or visit the main IRS website for the most in-depth and current information relating to the ERC, consisting of any current legal modifications or updates.
To receive the ERC, an organization must satisfy among the following criteria:.
The business operations were fully or partly suspended due to a federal government order related to COVID-19.
The business experienced a substantial decline in gross invoices. For 2021, a substantial decline is defined as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
The ERC is offered to services of all sizes, including tax-exempt companies, but there are some exceptions. Government entities and organizations that received a PPP loan may have constraints on claiming the credit.
The procedure for declaring the ERC involves finishing the necessary kinds and consisting of the credit on your work income tax return (generally Kind 941). The exact time it takes to process the credit can differ based upon several aspects, including the complexity of your organization and the workload of the IRS. It’s recommended to consult with a tax professional for assistance particular to your scenario.
There are several companies that can help with the procedure of claiming the ERC. Some well-known companies that use assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the information supplied here is based on basic understanding and may not reflect the most recent updates or changes to the ERC. It is very important to speak with a tax professional or check out the main IRS website for the most accurate and updated info regarding eligibility, declaring treatments, and offered help.
Less than 100. If the company had 100 or fewer staff members on average in 2019, then the credit is based.
on salaries paid to all staff members whether they actually worked or not. Simply put, even if the.
employees 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 workers on average in 2019.
allowed only for incomes paid to staff members who did not work throughout the calendar quarter.
In both cases, “wages” consists of not simply cash payments however also a part of the expense of employer.
provided healthcare. Employee Retention Credit Form 941 X
Payment.
Employers can be right away reimbursed for the credit by minimizing the quantity of payroll taxes they.