Lets talk first about Form 941 Employee Retention Credit :
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 individuals truly learn more about the program we need to head to the room where we have the ability to show a few of the checks that we are getting for business and I wish to see that what is this this is uh numerous countless dollars actually Kevin numerous countless dollars so these are replicate copies of the letters that go to clients validating that the check is on the method I imply you understand if you just start to look at some of these here I imply this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s just I indicate consider 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 validated the numbers are confirmed and the check is on the mail in the mail from the IRS 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 do not pay anything till they in fact get the money they don’t pay bottom line Wonder trust anything up until this letter is validated the check is on the way they deposit it into their checking account and they can truly rely on Wonder trust that the process has been ended up and the number of 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 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 Fantastic here you’re at my YouTube channel we’re speaking about something truly important today the staff member retention credit which most of you have never ever heard of I certainly hadn’t heard of it until very recently and learned a lot about it since this is most likely the most affordable expense of capital for any small company anywhere
anytime if you have workers in between five and five hundred so I have actually got the expert with me this is Josh Fox he’s the founder and CEO of bottom line Concepts they’re the biggest 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 manager 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’ve become yes the Ambassador and paid representative for this I enjoy this program it’s going away soon you got to learn all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just begin there so throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act used services 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 exactly so the ERC is a refund that’s.
correct the money money payroll tax refund alright go on sorry I simply have to ensure we got that point I mean that’s a huge difference a loan versus cash cash I like money cash 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 gorgeous hard check in the mail where you get actual cash from the IRS all right so let’s talk about how it works because it seems like to me if it’s a if it’s worker retention credit that individual had to be a worker so I’m going to make the Presumption this cash is not for the owner not for people on the cap table not for shareholders it’s for workers right you had to have owned an organization but it’s based on you having W-2 workers 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 appropriate so there were 6 quarters the program was open well walk us through the 6 quarters so you had quarters two 3 and 4 of 2020 and you had quarters one 2 and 3 of 2021. all right so that’s how it’s determined you have to be on the W-2 during that duration now let’s talk my preferred part money how much can you get back per staff member that was on a W-2 in those six quarters so the calculation in 2020 to be exact Kevin is 50 of the employee’s salary to a maximum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s income to an optimum of seven thousand per quarter how did that happen um they simply changed the rules in.
2021 versus since 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 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 six thousand dollars per staff member that is because that’s a great deal of money it is now there’s a caveat here the PPP money would have to be reduced from the twenty six 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 money somewhere around ten 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 workers and you took PPP cash you would still get a million dollar in the mail from the IRS so it’s substantial undoubtedly now the big concern is why does no one understand about this due to the fact that appearance when I initially became aware of this when I initially met Josh you understand I’ve got lots of financial investments in great deals of companies I’m a significant advocate for entrepreneurship in America and make lots of many investments in entrepreneurs of which many suffered through the pandemic when I first became aware of this I called BS I don’t believe it since I use the PPP we went through the money center Banks to get it it was extremely easy to do we had our CEOs call the banks they got their loans which were well should have and we used them carefully to survive during the pandemic so when I found out about this I stated nah it can’t hold true however when I dug around I even contacted us to my political leader buddies Governor Senators they didn’t understand about it I indicate that’s how you know that’s how false information 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 likewise not true so let’s ask Josh why does no one know about the worker retention credit you understand what’s interesting you’re talking about the banks Kevin since 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 country and they would process process in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply procedure procedure that’s all um and here there was mayhem since remember in the original cares act you could not do both programs so if you had actually done PPP you might refrain from doing ERC in the initial program and when they altered 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 made it clear to anybody about how to.
do this does your CFO know how to do this not truly he or she’s never done it in the past do the banks do it nope the banks do not do it the payroll business yeah a few of them are doing it as a payroll company your accounting professional no your accounting professional’s never done this prior to unless you have an account that entered into this service and bottom line my company Kevin has actually stayed in business because 2009 and we have actually been working with the federal government and the state government to recuperate cash for Fortune 500 Fortune 1000 business so a great deal of our big huge business clients have actually worked with bottom line to recuperate other federal government programs we have actually done sales tax and utilize tax unemployment tax work chance tax credits research and development tax credits unclaimed home property tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit designed to encourage.
companies to keep staff members on their payroll. The credit is 50% of as much as $10,000 in incomes paid by an.
company whose business is fully or partly suspended because of COVID-19 or whose gross invoices.
decrease by more than 50%.
Schedule.
1. The credit is offered to all companies despite size including tax exempt companies. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) small.
services who take Small company Loans.
2. To certify, the employer needs to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the company’s business is fully or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross receipts are below 50% of the similar quarter in 2019. As soon as the.
company’s gross receipts exceed 80% of an equivalent quarter in 2019 they no longer qualify.
after the end of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the qualifying salaries paid up to $10,000 in total.
It is effective for wages paid after March 13th and before December 31, 2020.
The definition of qualifying incomes differs by whether a company had, usually, basically than.
100 workers in 2019.
Companies that specialize in ERC filing support typically offer proficiency and support to assist companies navigate the intricate process of claiming the credit. They can use numerous services, consisting of:.
How is the employee retention credit calculated? Form 941 Employee Retention Credit
Eligibility Assessment: These business will assess your business’s eligibility for the ERC based upon elements such as your industry, revenue, and operations. If you satisfy the requirements for the credit and identify the optimum credit quantity you can claim, they can assist figure out.
Paperwork and Calculation: ERC filing services will help in gathering the needed documentation, such as payroll records and monetary statements, to support your claim. They will likewise assist compute the credit quantity based upon eligible incomes and other certifying expenditures.
Retroactive Claim Evaluation: If you are qualified to claim the ERC for previous quarters, these business can review your previous payroll records and financials to determine potential chances for retroactive credits. They can help you modify previous tax returns to claim these refunds.
Filing Assistance: Companies concentrating on ERC filings will prepare and send the essential types and documents in your place. This includes completing Type 941 or any other necessary tax return.
Compliance and Updates: ERC guidelines and guidance have actually evolved gradually. These business stay upgraded with the latest modifications and guarantee that your filings adhere to the most existing standards. They can also offer ongoing support if the IRS demands extra info or performs an audit related to your ERC claim.
It’s important to research study and veterinarian any company providing ERC filing assistance to ensure their reliability and competence. Search for established companies with experience in tax and payroll services, or consider connecting to relied on accounting firms or tax experts who offer ERC filing support.
Remember that while these companies can supply important help, it’s constantly an excellent idea to have a basic understanding of the ERC requirements and process yourself. This will help you make informed decisions and ensure accurate filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief steps. The goal of the ERC is to encourage organizations to retain and pay their employees 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 companies, consisting of for-profit companies, tax-exempt companies, and specific governmental entities. To certify, employers must fulfill one of two criteria:.
Business operations were fully or partially suspended due to a federal government order related to COVID-19.
Business experienced a substantial decrease in gross invoices. As mentioned previously, for 2021, a significant decline is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decline in gross invoices compared to the very same quarter in 2019, or a 20% decline in gross invoices compared to the immediately preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount amounts to a portion (as much as 70%) of qualified salaries paid to employees, including certain health plan expenditures. The maximum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, organizations that received an Income Defense Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 allows organizations to claim the ERC even if they got a PPP loan. The exact same salaries can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and improved, permitting qualified companies to claim the credit for certified salaries paid as far back as March 13, 2020. This retroactive arrangement provides an opportunity for organizations to amend prior-year income tax return and receive refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their work income tax return, usually Form 941. If the credit surpasses the quantity of work taxes owed, the excess can be refunded to the employer.
It is essential to note that the ERC provisions and eligibility criteria have progressed over time. The best course of action is to speak with a tax professional or go to the main internal revenue service website for the most in-depth and updated information regarding the ERC, including any recent legal modifications or updates.
To qualify for the ERC, a company must fulfill one of the following criteria:.
The business operations were fully or partially suspended due to a government order related to COVID-19.
The business experienced a considerable decrease in gross receipts. For 2021, a considerable decrease is specified as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
The ERC is available to businesses of all sizes, including tax-exempt companies, but there are some exceptions. Government entities and businesses that received a PPP loan might have restrictions on claiming the credit.
The procedure for declaring the ERC involves finishing the necessary forms and consisting of the credit on your work tax return (typically Kind 941). The exact time it takes to process the credit can vary based on a number of aspects, including the complexity of your company and the workload of the IRS. It’s advised to seek advice from a tax expert for assistance specific to your scenario.
There are a number of business that can assist with the procedure of claiming the ERC. These consist of accounting companies, tax advisory services, and payroll provider. Some popular companies that use assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research study and get in touch with these companies straight to inquire about their services and costs.
Please keep in mind that the info supplied here is based upon basic knowledge and might not reflect the most current updates or changes to the ERC. It’s important to speak with a tax expert or go to the main IRS site for the most accurate and updated information regarding eligibility, declaring treatments, and offered assistance.
Less than 100. If the company had 100 or fewer staff members typically in 2019, then the credit is based.
on earnings paid to all staff members whether they in fact worked or not. In other words, even if the.
workers worked full-time and made money for full-time work, the employer still gets the credit.
Greater than 100. If the employer had more than 100 workers typically in 2019, then the credit is.
allowed just for earnings paid to employees who did not work throughout the calendar quarter.
In both cases, “incomes” includes not simply money payments however likewise a portion of the cost of employer.
offered healthcare. Form 941 Employee Retention Credit
Payment.
Employers can be immediately reimbursed for the credit by reducing the amount of payroll taxes they.