Lets talk first about How To File 941 For Employee Retention Credit :
Our group here what do these people doing everyone in this space is assisting teach individuals about ERC and uh always offer a beautiful breakfast and have people actually learn about the program we need to head to the room where we have the ability to display a few of the checks that we are getting for business and I wish to see that what is this this is uh numerous millions of dollars literally Kevin numerous countless dollars so these are duplicate copies of the letters that go to clients validating that the check is on the way I suggest you know if you just begin to look at some of these here I indicate 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 real 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 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 understand when you
get this you know the check is opted for sure which’s when they pay so they don’t pay anything until they actually get the cash they don’t pay bottom line Wonder trust anything till this letter is validated the check is on the method they transfer it into their savings account and they can genuinely rely on Wonder trust that the procedure has been completed and the number of you believe you have actually processed since you started this we have to do with 35 000 of these for
about 6 billion dollars wow so plainly they know what they’re doing and that’s what you require you require professionals 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 discussing something really important today the staff member retention credit which the majority of you have never ever heard of I definitely had not heard of it until very just recently and discovered a lot about it because this is probably the most affordable expense of capital for any small business anywhere
anytime if you have workers between five and five hundred so I have actually got the specialist 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 challenging this isn’t like PPP we just phone your bank manager and state 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 have actually ended up being yes the Ambassador and paid spokesperson for this I love this program it’s disappearing soon you got to find out 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 provided companies 3 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 two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the cash cash payroll tax refund okay go on sorry I simply have to make certain we got that point I indicate that’s a huge difference a loan versus money 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 lovely hard check in the mail where you get actual money from the internal revenue service all right so let’s discuss 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 staff member so I’m going to make the Assumption this money is not for the owner not for individuals on the cap table not for investors it’s for workers right you needed to have owned an organization however it’s based upon 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 qualified so you need to be on payroll in 2020 on the W-2 and you need to be on payroll for the first 6 months of 2021 on the W-2 proper so there were six quarters the program was open well walk us through the six quarters so you had quarters two three and four of 2020 and you had quarters one 2 and 3 of 2021. alright so that’s how it’s determined you need to be on the W-2 throughout that period now let’s talk my favorite part money how much can you return per staff member that was on a W-2 in those 6 quarters so the estimation in 2020 to be precise Kevin is 50 of the staff member’s wage to an optimum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers escalated to 70 of the worker’s wage to an optimum of 7 thousand per quarter how did that occur um they simply changed the rules in.
2021 versus because 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 five 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 5 thousand in twenty twenty that’s twenty 6 thousand dollars per employee that is since that’s a great deal of money 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 on average Kevin is if you took PPP cash somewhere around ten 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 staff members and you took PPP money 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 know about this because appearance when I first became aware of this when I initially satisfied Josh you understand I’ve got great deals of financial investments in lots of companies I’m a major supporter for entrepreneurship in America and make lots of many investments in entrepreneurs of which many suffered through the pandemic when I initially heard about this I called BS I do not think 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 and that were well should have and we utilized them sensibly to stay alive throughout the pandemic so when I heard about this I said nah it can’t hold true but when I dug around I even contacted us to my politician pals Guv Senators they didn’t learn about it I indicate that’s how you know that’s how false information is that there’s no info out there then a bunch of people told me well you can’t get it since you took the PPP also not true so let’s ask Josh why does no one learn about the staff member retention credit you understand what’s intriguing you’re discussing the banks Kevin because in the PPP loan process 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 nation and they would process process 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 chaos because keep in mind in the initial cares act you could not do both programs so if you had done PPP you might not do ERC in the original 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 government never ever made it clear to any person about how to.
do this does your CFO know how to do this not really she or he’s never done it in the past do the banks do it nope the banks don’t do it the payroll business yeah some of them are doing it as a payroll company your accounting professional no your accountant’s never done this before unless you have an account that went into this company and bottom line my company Kevin has actually been in business because 2009 and we have actually been working with the federal government and the state federal government to recover cash for Fortune 500 Fortune 1000 companies so a lot of our huge big corporate customers have actually worked with bottom line to recuperate other federal government programs we have actually done sales tax and utilize tax unemployment tax work opportunity tax credits research and development tax credits unclaimed home property tax all of these other government programs.
The staff member retention tax credit is a broad based refundable tax credit developed to encourage.
employers to keep staff members on their payroll. The credit is 50% of as much as $10,000 in wages paid by an.
company whose service is totally or partly suspended because of COVID-19 or whose gross invoices.
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.
organizations who take Small company Loans.
2. To qualify, the company needs to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s company is fully or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross invoices are listed below 50% of the similar quarter in 2019. When the.
employer’s gross receipts go above 80% of an equivalent quarter in 2019 they no longer qualify.
after the end 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 salaries paid after March 13th and prior to December 31, 2020.
The definition of certifying salaries varies by whether an employer had, typically, more or less than.
100 workers in 2019.
Companies that specialize in ERC filing help generally provide know-how and assistance to assist businesses navigate the intricate process of claiming the credit. They can provide numerous services, including:.
How is the employee retention credit calculated? How To File 941 For Employee Retention Credit
Eligibility Evaluation: These business will evaluate your organization’s eligibility for the ERC based upon elements such as your market, profits, and operations. If you fulfill the requirements for the credit and recognize the optimum credit quantity you can claim, they can assist identify.
Paperwork and Calculation: ERC filing services will assist in collecting the essential paperwork, such as payroll records and financial declarations, to support your claim. They will also assist calculate the credit quantity based on eligible salaries and other qualifying expenses.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for prior quarters, these business can review your previous payroll records and financials to recognize potential chances for retroactive credits. They can help you amend previous tax returns to declare these refunds.
Filing Assistance: Business focusing on ERC filings will prepare and send the needed kinds and documents on your behalf. This includes completing Kind 941 or any other necessary tax forms.
Compliance and Updates: ERC guidelines and assistance have actually evolved in time. These companies stay updated with the latest modifications and guarantee that your filings abide by the most existing guidelines. They can also offer ongoing assistance if the IRS demands extra details or carries out an audit related to your ERC claim.
It is essential to research study and vet any business using ERC filing support to guarantee their reliability and know-how. Look for recognized companies with experience in tax and payroll services, or consider connecting to trusted accounting firms or tax specialists who offer ERC filing support.
Bear in mind that while these business can offer important assistance, it’s constantly an excellent idea to have a standard understanding of the ERC requirements and process yourself. This will help you make informed decisions and ensure accurate filings.
The Worker Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief steps. The objective of the ERC is to motivate businesses to maintain and pay their workers throughout the pandemic, even if their operations have actually been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to qualified companies, consisting of for-profit companies, tax-exempt organizations, and specific governmental entities. To certify, employers need to meet one of two requirements:.
Business operations were fully or partially suspended due to a federal government order related to COVID-19.
The business experienced a substantial decline in gross receipts. As mentioned previously, for 2021, a considerable decrease is specified as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a substantial decrease is defined as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decline in gross invoices compared to the immediately 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 (as much as 70%) of qualified wages paid to employees, including certain health insurance expenditures. 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, businesses that received a Paycheck Defense Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 permits businesses to declare the ERC even if they received a PPP loan. The same wages can not be used to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and enhanced, enabling eligible companies to declare the credit for certified earnings paid as far back as March 13, 2020. This retroactive provision provides an opportunity for services to modify prior-year income tax return and receive refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their work tax returns, typically Type 941. If the credit goes beyond the amount of employment taxes owed, the excess can be reimbursed to the company.
It is essential to keep in mind that the ERC provisions and eligibility requirements have progressed with time. The best strategy is to speak with a tax professional or visit the main internal revenue service website for the most detailed and up-to-date info regarding the ERC, consisting of any current legal changes or updates.
To get approved for the ERC, a service must meet among the following criteria:.
Business operations were completely or partially suspended due to a government order related to COVID-19.
Business experienced a substantial decline in gross receipts. For 2021, a substantial decrease is specified as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decline is specified as a 20% decrease 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.
The ERC is readily available to services of all sizes, including tax-exempt companies, however there are some exceptions. Federal government entities and businesses that got a PPP loan may have constraints on claiming the credit.
The procedure for declaring the ERC includes completing the essential types and including the credit on your employment tax return (normally Type 941). The exact time it requires to process the credit can vary based upon a number of aspects, including the complexity of your organization and the work of the internal revenue service. It’s suggested to speak with a tax professional for guidance specific to your situation.
There are several business that can help with the procedure of declaring the ERC. Some widely known companies that provide help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the details offered here is based on general understanding and might not reflect the most recent updates or modifications to the ERC. It’s important to speak with a tax expert or check out the main IRS website for the most updated and accurate details regarding eligibility, declaring procedures, and offered support.
Less than 100. The credit is based if the company had 100 or fewer workers on average in 2019.
on earnings paid to all workers whether they in fact worked or not. To put it simply, even if the.
staff members worked full time and got paid for full time work, the employer still gets the credit.
Greater than 100. The credit is if the employer had more than 100 workers on average in 2019.
permitted only for earnings paid to staff members who did not work throughout the calendar quarter.
In both cases, “earnings” includes not simply money payments however also a part of the expense of employer.
offered healthcare. How To File 941 For Employee Retention Credit
Companies can be immediately repaid for the credit by minimizing the amount of payroll taxes they.