Lets talk first about 941X For Employee Retention Credit Example :
Our team here what do these men doing everyone in this space is assisting teach people about ERC and uh always provide a stunning breakfast and have people truly discover the program we should head to the room where we are able to display some of the checks that we are getting for business and I ‘d like to see that what is this this is uh hundreds of countless dollars literally Kevin hundreds of countless dollars so these are replicate copies of the letters that go to customers validating that the check is on the method I mean you know if you simply start 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 suggest it’s just I suggest consider how many real customers 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 IRS heading to the client so that’s how you have the ability to track it you know when you
get this you understand the check is gone for sure and that’s when they pay so they do not pay anything till they actually receive the cash they don’t pay bottom line Wonder trust anything until this letter is verified the check is on the way they deposit it into their bank account and they can genuinely rely on Wonder trust that the procedure has been completed and the number of you believe you’ve processed given that you started this we’re about 35 000 of these for
about 6 billion dollars wow so clearly they know what they’re doing and that’s what you require you require specialists 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 important today the employee retention credit which most of you have never ever become aware of I certainly had not become aware of it up until really just recently and discovered a lot about it due to the fact that this is most likely the most affordable cost of capital for any small company anywhere
anytime if you have employees in between 5 and five hundred so I have actually got the professional 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 simply phone your bank supervisor and say offer 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’ve become yes the Ambassador and paid representative for this I like this program it’s disappearing soon you got to discover all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply begin there so throughout the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act used organizations 3 opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone it makes a big difference right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
correct the cash money payroll tax refund alright go on sorry I simply need to ensure we got that point I mean that’s a huge distinction a loan versus money money I like cash money that’s what we’re discussing 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 real cash from the internal revenue service all right so let’s discuss how it works due to the fact that it sounds like to me if it’s a if it’s employee retention credit that person had to be a staff member so I’m going to make the Presumption this cash is not for the owner not for individuals on the cap table not for shareholders it’s for staff members right you had to have actually owned a business however 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 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 proper so there were 6 quarters the program was open well stroll us through the 6 quarters so you had quarters 2 three and four 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 period now let’s talk my preferred part cash just 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 precise Kevin is 50 of the staff member’s income to a maximum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers increased to 70 of the staff member’s wage to an optimum of 7 thousand per quarter how did that happen um they just changed the rules in.
2021 versus due to the fact that the chaos of the pandemic so they wished 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 after that what takes place 21 000 Max in 2021 oh that’s how you develop twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per staff member that is since that’s a great deal of cash it is now there’s a caution here the PPP money would need to be decreased from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would reduce the 26 000 so what we’re seeing usually Kevin is if you took PPP cash someplace 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 money 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 learn about this due to the fact that look when I initially became aware of this when I initially met Josh you understand I have actually got great deals of financial investments in great deals of companies I’m a major supporter for entrepreneurship in America and make many many investments in business owners of which many suffered through the pandemic when I initially found out about this I called BS I do not think it due to the fact that I utilize 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 which were well deserved and we used them wisely to survive throughout the pandemic so when I became aware of this I said nah it can’t hold true but when I dug around I even contacted us to my politician good friends Guv Senators they didn’t learn about it I imply that’s how you know that’s how misinformation is that there’s no information out there then a lot of individuals told me well you can’t get it due to the fact that you took the PPP likewise not true so let’s ask Josh why does no one understand about the employee retention credit you understand what’s fascinating you’re discussing the banks Kevin due to the fact that in the PPP loan process 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 country and they would process process in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply process process that’s all um and here there was mayhem since remember in the original cares act you could refrain from doing both programs so if you had done PPP you might not do ERC in the original 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 government never made it clear to any person about how to.
do this does your CFO understand how to do this not actually he or she’s never ever done it before 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 business your accountant no your accountant’s never ever done this before unless you have an account that went into this company and bottom line my company Kevin has been in business because 2009 and we have actually been working with the federal government and the state federal government to recuperate money for Fortune 500 Fortune 1000 business so a great deal of our huge huge corporate clients have dealt with bottom line to recuperate other government programs we have actually done sales tax and utilize tax joblessness tax work opportunity tax credits research and development tax credits unclaimed property property tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit created to motivate.
employers to keep employees on their payroll. The credit is 50% of up to $10,000 in salaries paid by an.
Since of COVID-19 or whose gross invoices, employer whose organization is completely or partially suspended.
decrease by more than 50%.
Availability.
1. The credit is readily available to all employers no matter size including tax exempt organizations. There are.
only 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
organizations who take Small Business Loans.
2. To certify, the company needs to satisfy one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s business is totally or partially 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 comparable quarter in 2019. Once the.
company’s gross invoices exceed 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 wages paid up to $10,000 in overall.
It is effective for wages paid after March 13th and before December 31, 2020.
The meaning of certifying earnings varies by whether an employer had, typically, more or less than.
100 staff members in 2019.
Business that focus on ERC filing assistance normally offer competence and assistance to help businesses browse the intricate procedure of declaring the credit. They can offer different services, including:.
How is the employee retention credit calculated? 941X For Employee Retention Credit Example
Eligibility Assessment: These companies will evaluate your company’s eligibility for the ERC based upon aspects such as your market, revenue, and operations. They can assist identify if you fulfill the requirements for the credit and recognize the maximum credit quantity you can claim.
Paperwork and Calculation: ERC filing services will assist in collecting the required paperwork, such as payroll records and financial statements, to support your claim. They will also help determine the credit quantity based upon qualified incomes and other certifying expenditures.
Retroactive Claim Review: If you are eligible to declare the ERC for previous quarters, these business can examine your previous payroll records and financials to recognize possible opportunities for retroactive credits. They can help you change prior tax returns to claim these refunds.
Filing Assistance: Business focusing on ERC filings will prepare and send the necessary types and documents on your behalf. This consists of completing Type 941 or any other required tax return.
Compliance and Updates: ERC regulations and guidance have actually progressed gradually. These business remain updated with the most recent modifications and ensure that your filings adhere to the most present guidelines. If the IRS requests extra details or performs an audit associated to your ERC claim, they can likewise provide ongoing support.
It’s important to research and vet any company offering ERC filing assistance to guarantee their credibility and knowledge. Look for recognized companies with experience in tax and payroll services, or think about connecting to trusted accounting companies or tax experts who offer ERC filing assistance.
Remember that while these business can offer valuable support, it’s always a great idea to have a fundamental understanding of the ERC requirements and process yourself. This will help you make informed choices and make sure accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief procedures. The objective of the ERC is to encourage companies 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 readily available to eligible employers, including for-profit services, tax-exempt organizations, and certain governmental entities. To qualify, employers should meet one of two criteria:.
Business operations were completely or partly suspended due to a federal government order related to COVID-19.
Business experienced a significant decrease in gross receipts. As pointed out 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 decline is defined 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.
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 certified wages paid to employees, consisting of particular health insurance 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, companies that received a Paycheck Defense Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 permits companies to declare the ERC even if they got a PPP loan. However, the exact same salaries can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and boosted, allowing eligible employers to declare the credit for qualified incomes paid as far back as March 13, 2020. This retroactive arrangement supplies an opportunity for companies to modify prior-year tax returns and receive refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their work tax returns, usually Kind 941. If the credit surpasses the amount of work taxes owed, the excess can be reimbursed to the company.
It is necessary to keep in mind that the ERC provisions and eligibility requirements have progressed with time. The very best strategy is to speak with a tax professional or go to the main internal revenue service website for the most up-to-date and comprehensive information concerning the ERC, consisting of any current legal modifications or updates.
To receive the ERC, a company needs to meet one of the following requirements:.
The business operations were totally or partly suspended due to a government order related to COVID-19.
The business experienced a significant decrease in gross invoices. For 2021, a significant decline is specified as a 20% decline in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a substantial decline is specified as a 20% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decline in gross invoices compared to the immediately preceding quarter.
The ERC is readily available to businesses of all sizes, including tax-exempt organizations, but there are some exceptions. Government entities and companies that received a PPP loan might have constraints on declaring the credit.
The procedure for claiming the ERC includes finishing the necessary kinds and including the credit on your employment tax return (normally Type 941). The exact time it takes to process the credit can vary based upon several elements, consisting of the intricacy of your organization and the work of the IRS. It’s advised to talk to a tax professional for assistance specific to your situation.
There are several business that can assist with the process of claiming the ERC. Some widely known companies that offer assistance with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the information supplied here is based on general knowledge and may not reflect the most recent updates or changes to the ERC. It is essential to seek advice from a tax expert or check out the official IRS website for the most current and accurate info relating to eligibility, claiming treatments, and available help.
Less than 100. If the company had 100 or fewer employees usually in 2019, then the credit is based.
on wages paid to all employees whether they actually worked or not. In other words, even if the.
workers worked full time and earned money for full-time work, the company still gets the credit.
Greater than 100. If the company had more than 100 employees on average in 2019, then the credit is.
enabled just for salaries paid to workers who did not work throughout the calendar quarter.
In both cases, “wages” consists of not just money payments however also a portion of the cost of company.
offered healthcare. 941X For Employee Retention Credit Example
Payment.
Employers can be immediately repaid for the credit by decreasing the amount of payroll taxes they.