Lets talk first about Form 941 For Employee Retention Credit :
Our group here what do these men doing everyone in this space is assisting teach people about ERC and uh always provide a lovely breakfast and have people actually learn about the program we should head to the room where we have the ability to show some of the checks that we are getting for companies and I ‘d like to see that what is this this is uh hundreds of millions of dollars actually Kevin hundreds of countless dollars so these are duplicate copies of the letters that go to clients confirming that the check is on the method I imply you understand if you just begin 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 indicate it’s simply I suggest think of how many real customers 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 validated 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 know when you
receive this you understand the check is opted for sure and that’s when they pay so they do not pay anything till they actually receive the money they don’t pay bottom line Wonder trust anything until this letter is validated the check is on the way they transfer it into their savings account and they can really rely on Wonder trust that the procedure has actually been completed and how many you believe you have actually processed because you started this we’re about 35 000 of these for
about 6 billion dollars wow so clearly they understand what they’re doing which’s what you need you require 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 Fantastic here you’re at my YouTube channel we’re speaking about something really important today the staff member retention credit which most of you have never become aware of I definitely hadn’t heard of it till really 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 employees between 5 and five hundred so I have actually got the specialist with me this is Josh Fox he’s the founder and CEO of bottom line Concepts 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 does not 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 ended up being yes the Ambassador and paid spokesperson for this I like this program it’s going away soon you got to discover all about it let’s talk employee 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 used organizations three chances 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.
remedy the money cash payroll tax refund alright go on sorry I just need to make certain we got that point I imply that’s a huge distinction a loan versus cash cash I like cash money that’s what we’re speaking about okay 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 hard check in the mail where you get actual cash from the internal revenue service all right so let’s speak about how it works because it seems like to me if it’s a if it’s staff member retention credit that person 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 investors it’s for employees right you needed to have owned a business however 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 eligible so you need to be on payroll in 2020 on the W-2 and you need to be on payroll for the very first 6 months of 2021 on the W-2 correct 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 two and three of 2021. fine so that’s how it’s measured you need to be on the W-2 throughout that duration now let’s talk my preferred part cash how much can you get back per employee that was on a W-2 in those 6 quarters so the estimation in 2020 to be specific Kevin is 50 of the employee’s salary to an optimum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the employee’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 mayhem 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 five thousand in twenty twenty that’s twenty 6 thousand dollars per employee that is since that’s a lot of cash it is now there’s a caution 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 lower the 26 000 so what we’re seeing typically Kevin is if you took PPP money someplace around 10 thousand dollars a person so let’s say hypothetically you owned a restaurant in New York 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 huge undoubtedly now the big concern is why does nobody understand about this due to the fact that look when I first became aware of this when I initially satisfied Josh you know I have actually got great deals of investments in lots of business I’m a major supporter for entrepreneurship in America and make lots of many investments in business owners of which lots of suffered through the pandemic when I first found out about this I called BS I do not 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 utilized them sensibly to survive throughout the pandemic so when I found out about this I stated nah it can’t hold true however when I dug around I even called to my political leader good friends Guv Senators they didn’t understand about it I imply that’s how you understand 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 due to the fact that you took the PPP also not true so let’s ask Josh why does no one know about the employee retention credit you understand what’s fascinating you’re speaking about the banks Kevin due to the fact that in the PPP loan process the federal government made it very 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 simply process procedure that’s all um and here there was mayhem because remember in the initial cares act you might not do both programs so if you had done PPP you might refrain from doing ERC in the original program and when they altered the law in 2021 the banks were not doing ERC since it’s not alone so you’re getting a tax refund so the government never made it clear to anyone about how to.
do this does your CFO understand how to do this not truly he or she’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 accounting professional’s never done this before unless you have an account that entered into this service and bottom line my company Kevin has stayed in business because 2009 and we have actually been dealing with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 business so a lot of our huge huge business customers have actually worked with bottom line to recover other government programs we’ve done sales tax and utilize 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 created to motivate.
companies to keep employees on their payroll. The credit is 50% of as much as $10,000 in salaries paid by an.
employer whose company is totally or partially suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
Accessibility.
1. The credit is available to all companies no matter size consisting of tax exempt companies. 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 has to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s organization is totally or partially suspended by federal 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.
employer’s gross invoices go above 80% of a comparable quarter in 2019 they no longer qualify.
after completion of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the qualifying salaries paid up to $10,000 in total.
It works for earnings paid after March 13th and prior to December 31, 2020.
The meaning of qualifying wages varies by whether a company had, on average, basically than.
100 employees in 2019.
Companies that specialize in ERC filing help generally provide knowledge and support to assist organizations browse the complicated process of claiming the credit. They can use different services, consisting of:.
How is the employee retention credit calculated? Form 941 For Employee Retention Credit
Eligibility Evaluation: These business will examine your business’s eligibility for the ERC based upon elements such as your market, revenue, and operations. If you meet the requirements for the credit and recognize the optimum credit amount you can declare, they can help identify.
Documentation and Calculation: ERC filing services will assist in gathering the required documents, such as payroll records and monetary statements, to support your claim. They will also help compute the credit amount based upon eligible salaries and other qualifying expenditures.
Retroactive Claim Review: If you are eligible to claim the ERC for previous quarters, these companies can review your past payroll records and financials to identify prospective opportunities for retroactive credits. They can assist you change previous tax returns to claim these refunds.
Filing Help: Companies concentrating on ERC filings will prepare and submit the essential forms and documents on your behalf. This includes finishing Kind 941 or any other necessary tax return.
Compliance and Updates: ERC guidelines and guidance have actually evolved in time. These business stay updated with the current modifications and ensure that your filings adhere to the most present standards. If the IRS demands extra info or carries out an audit associated to your ERC claim, they can also offer continuous assistance.
It’s important to research study and vet any company providing ERC filing support to ensure their trustworthiness and expertise. Look for recognized companies with experience in tax and payroll services, or think about connecting to trusted accounting companies or tax specialists who use ERC submitting assistance.
Keep in mind that while these business can provide important support, it’s always a good concept to have a basic understanding of the ERC requirements and procedure yourself. This will help you make notified decisions and ensure 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 procedures. The goal of the ERC is to encourage services to keep and pay their employees 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 qualified companies, consisting of for-profit businesses, tax-exempt organizations, and certain governmental entities. To qualify, companies need to satisfy one of two requirements:.
The business operations were totally or partly suspended due to a government order related to COVID-19.
The business experienced a significant decline in gross invoices. As discussed earlier, for 2021, a considerable decline is defined as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a substantial 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 immediately preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity amounts to a portion (up to 70%) of certified salaries paid to workers, consisting of certain health plan expenditures. The optimum credit per staff member is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, services that got an Income Defense Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 permits companies to claim the ERC even if they got a PPP loan. The very same earnings can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and boosted, permitting qualified employers to claim the credit for certified wages paid as far back as March 13, 2020. This retroactive provision provides a chance for businesses to modify prior-year tax returns and get refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their work tax returns, usually Form 941. The excess can be reimbursed to the company if the credit goes beyond the quantity of work taxes owed.
It’s important to keep in mind that the ERC arrangements and eligibility requirements have evolved in time. The very best strategy is to talk to a tax professional or check out the main IRS website for the most comprehensive and updated info concerning the ERC, including any recent legal changes or updates.
To get approved for the ERC, a company should satisfy among the following requirements:.
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 receipts. For 2021, a significant decline is specified as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a considerable decrease is specified as a 20% decrease in gross invoices compared to the same quarter in 2019, or a 20% decline in gross invoices compared to the immediately preceding quarter.
The ERC is offered to companies of all sizes, including tax-exempt organizations, however there are some exceptions. For instance, government entities and companies that received a PPP loan may have restrictions on claiming the credit.
The procedure for declaring the ERC involves completing the essential forms and consisting of the credit on your employment income tax return (generally Type 941). The exact time it requires to process the credit can vary based on a number of aspects, including the complexity of your business and the work of the internal revenue service. It’s suggested to consult with a tax expert for guidance particular to your circumstance.
There are several business that can assist 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 details provided here is based on general understanding and may not reflect the most recent updates or modifications to the ERC. It’s important to consult with a tax professional or visit the official internal revenue service website for the most updated and accurate information regarding eligibility, declaring treatments, and available help.
Less than 100. If the company had 100 or fewer staff members on average in 2019, then the credit is based.
on wages paid to all employees whether they in fact 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.
permitted only for incomes paid to employees who did not work during the calendar quarter.
In both cases, “wages” consists of not simply cash payments but likewise a portion of the expense of employer.
supplied health care. Form 941 For Employee Retention Credit
Payment.
Employers can be immediately compensated for the credit by reducing the amount of payroll taxes they.