Lets talk first about 941X 2020 Employee Retention Credit :
Our team here what do these men doing everyone in this space is assisting teach individuals about ERC and uh always offer a stunning breakfast and have individuals actually find out about the program we should head to the room where we are able 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 millions of dollars actually Kevin numerous millions of dollars so these are duplicate copies of the letters that go to customers validating that the check is on the method I mean you understand if you simply begin to take a look at a few of these here I suggest this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I imply it’s simply I indicate think about 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 confirmed and the check is on the mail in the mail from the internal revenue service heading to the customer so that’s how you have the ability to track it you know when you
receive this you know the check is chosen sure which’s when they pay so they do not pay anything up until they actually get the money they don’t pay bottom line Wonder trust anything up until this letter is validated the check is on the method they transfer it into their checking account and they can genuinely rely on Wonder trust that the procedure has actually been ended up and the number of you think you’ve processed since you began this we have to do with 35 000 of these for
about six billion dollars wow so clearly they understand what they’re doing which’s what you require you require 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 Wonderful here you’re at my YouTube channel we’re speaking about something truly crucial today the employee retention credit which the majority of you have actually never ever become aware of I definitely hadn’t become aware of it until extremely just recently and learned a lot about it since this is probably the lowest cost of capital for any small company anywhere
anytime if you have workers 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 Principles they’re the biggest processor of these ERC credits this is a 170 page program so it’s difficult this isn’t like PPP we just call up your bank supervisor and state 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 have actually ended up being yes the Ambassador and paid representative 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 simply begin there so throughout the Trump Administration when President Trump was enacted they developed the cares Act and the cares act provided organizations three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically 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 money money payroll tax refund all right go on sorry I simply have to make sure we got that point I indicate that’s a huge difference a loan versus cash cash I like cash 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 stunning tough check in the mail where you get real cash from the IRS all right so let’s speak about how it works since it sounds like to me if it’s a if it’s staff member retention credit that individual had to be a worker so I’m going to make the Presumption this money is not for the owner not for people on the cap table not for shareholders it’s for workers right you had to have actually owned a business but it’s based upon you having W-2 workers 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 have to be on payroll in 2020 on the W-2 and you have to be on payroll for the first 6 months of 2021 on the W-2 right 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. okay 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 cash just how much can you return per staff member that was on a W-2 in those 6 quarters so the computation in 2020 to be specific Kevin is 50 of the worker’s salary to an optimum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the worker’s income to a maximum of seven thousand per quarter how did that occur um they just 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 staff members on payroll 100 so if you can get 5 000 per person Max in twenty that was 50 in 2020 as much as five thousand Max and then 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 five thousand in twenty twenty that’s twenty six thousand dollars per employee that is because that’s a lot of cash it is now there’s a caveat 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 2 you would decrease the 26 000 so what we’re seeing usually Kevin is if you took PPP cash 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 staff members and you took PPP cash you would still get a million dollar in the mail from the IRS so it’s big clearly now the huge concern is why does nobody know about this since look when I initially heard about this when I first satisfied Josh you understand I have actually got great deals of investments in lots of business I’m a significant supporter for entrepreneurship in America and make numerous numerous investments in business owners of which many suffered through the pandemic when I initially became aware of 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 deserved and we used them wisely to survive throughout the pandemic so when I found out about this I said nah it can’t hold true but when I dug around I even called to my politician good friends Governor Senators they didn’t learn about it I indicate that’s how you understand that’s how misinformation is that there’s no details out there then a lot of people informed 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 nobody learn about the worker retention credit you understand what’s fascinating you’re talking about the banks Kevin due to the fact that in the PPP loan procedure the federal government made it very 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 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 turmoil due to the fact that keep in mind in the original cares act you could refrain from doing both programs so if you had actually done PPP you could not do ERC in the original program and when they altered 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 any person about how to.
do this does your CFO know how to do this not actually he or she’s never done it previously do the banks do it nope the banks do not do it the payroll companies yeah a few of them are doing it as a payroll business your accountant no your accountant’s never done this prior to unless you have an account that entered into this company and bottom line my firm Kevin has been in business since 2009 and we’ve been working with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 business so a great deal of our huge big corporate customers have dealt with bottom line to recuperate other government programs we’ve 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 federal government programs.
The employee retention tax credit is a broad based refundable tax credit developed to motivate.
employers to keep workers on their payroll. The credit is 50% of up to $10,000 in earnings paid by an.
Since of COVID-19 or whose gross receipts, employer whose organization is completely or partially suspended.
decrease by more than 50%.
1. The credit is offered to all employers despite size consisting of tax exempt organizations. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) small.
businesses who take Small company Loans.
2. To certify, the company needs to fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s company is fully or partly suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross receipts are below 50% of the equivalent quarter in 2019. Once the.
company’s gross invoices go above 80% of an equivalent quarter in 2019 they no longer qualify.
after completion of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the qualifying earnings paid up to $10,000 in overall.
It is effective for earnings paid after March 13th and before December 31, 2020.
The definition of qualifying salaries varies by whether a company had, typically, basically than.
100 workers in 2019.
Companies that specialize in ERC filing help generally supply expertise and support to help businesses navigate the complicated process of claiming the credit. They can offer different services, including:.
How is the employee retention credit calculated? 941X 2020 Employee Retention Credit
Eligibility Assessment: These companies will evaluate your business’s eligibility for the ERC based upon aspects such as your industry, revenue, and operations. If you satisfy the requirements for the credit and recognize the optimum credit amount you can declare, they can assist determine.
Documentation and Calculation: ERC filing services will assist in collecting the essential documents, such as payroll records and financial statements, to support your claim. They will likewise assist determine the credit quantity based upon qualified wages and other qualifying costs.
Retroactive Claim Review: If you are qualified to claim the ERC for previous quarters, these business can evaluate your previous payroll records and financials to identify prospective chances for retroactive credits. They can help you modify prior tax returns to declare these refunds.
Filing Assistance: Companies specializing in ERC filings will prepare and submit the essential types and documents on your behalf. This consists of finishing Form 941 or any other necessary tax forms.
Compliance and Updates: ERC guidelines and assistance have progressed in time. These companies remain upgraded with the most recent changes and guarantee that your filings adhere to the most existing standards. They can also provide continuous assistance if the internal revenue service demands additional details or conducts an audit related to your ERC claim.
It’s important to research and vet any business offering ERC filing assistance to guarantee their reliability and expertise. Try to find recognized firms with experience in tax and payroll services, or consider reaching out to relied on accounting companies or tax professionals who provide ERC submitting support.
Remember that while these companies can provide important help, it’s constantly a great concept to have a basic understanding of the ERC requirements and procedure yourself. This will help you make notified decisions and guarantee accurate 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 objective of the ERC is to encourage services to keep 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 services, tax-exempt companies, and particular governmental entities. To qualify, companies need to meet one of two requirements:.
Business operations were completely or partly suspended due to a federal government order related to COVID-19.
The business experienced a significant decline in gross invoices. As mentioned earlier, for 2021, a significant decline is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decline is defined as a 20% decline in gross receipts compared to the exact same quarter in 2019, or a 20% decline in gross receipts compared to the instantly preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity is equal to a portion (as much as 70%) of qualified incomes paid to staff members, including particular health insurance costs. 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, businesses that received a Paycheck Defense Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 enables organizations to claim the ERC even if they got a PPP loan. The same wages can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has actually been retroactively broadened and boosted, allowing eligible companies to declare the credit for qualified earnings paid as far back as March 13, 2020. This retroactive provision supplies an opportunity for businesses to modify prior-year income tax return and get refunds.
Declaring the Credit: Employers can declare the ERC by reporting it on their employment income tax return, generally Type 941. The excess can be refunded to the company if the credit surpasses the quantity of employment taxes owed.
It is essential to note that the ERC provisions and eligibility requirements have actually progressed with time. The very best strategy is to seek advice from a tax expert or check out the official internal revenue service website for the most up-to-date and comprehensive information relating to the ERC, consisting of any current legislative modifications or updates.
To qualify for the ERC, a business needs to satisfy one of the following requirements:.
Business operations were completely or partly suspended due to a government order related to COVID-19.
The business experienced a substantial decrease in gross receipts. For 2021, a substantial decline is defined as a 20% decrease 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 exact same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
The ERC is available to services of all sizes, consisting of tax-exempt companies, however there are some exceptions. For instance, government entities and companies that got a PPP loan may have limitations on declaring the credit.
The process for claiming the ERC involves completing the necessary kinds and including the credit on your employment tax return (normally Type 941). The exact time it requires to process the credit can differ based upon numerous factors, including the intricacy of your service and the work of the IRS. It’s advised to seek advice from a tax professional for assistance specific to your scenario.
There are numerous companies that can help with the procedure of claiming the ERC. Some well-known business that use help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the info supplied here is based on general understanding and may not show the most current updates or changes to the ERC. It is very important to seek advice from a tax expert or visit the official internal revenue service website for the most up-to-date and accurate details relating to eligibility, declaring procedures, and available help.
Less than 100. The credit is based if the company had 100 or less staff members on average in 2019.
on salaries paid to all workers whether they really worked or not. To put it simply, even if the.
workers worked full time and got paid for full-time work, the company still gets the credit.
Greater than 100. If the company had more than 100 employees usually in 2019, then the credit is.
allowed just for salaries paid to staff members who did not work throughout the calendar quarter.
In both cases, “salaries” consists of not just money payments however likewise a portion of the expense of company.
provided healthcare. 941X 2020 Employee Retention Credit
Employers can be instantly repaid for the credit by decreasing the amount of payroll taxes they.