Lets talk first about 941X For Employee Retention Credit :
Our group here what do these men doing everyone in this room is helping teach people about ERC and uh constantly offer a lovely breakfast and have individuals truly discover the program we must head to the room where we have the ability to display some of the checks that we are getting for companies and I want to see that what is this this is uh numerous countless dollars literally Kevin numerous millions of dollars so these are duplicate copies of the letters that go to customers validating that the check is on the way I imply you know if you simply begin to take a look at a few of these here I indicate this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s simply I imply consider 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 verified the numbers are validated and the check is on the mail in the mail from the internal revenue service heading to the consumer so that’s how you have the ability to track it you know when you
receive this you know the check is chosen sure and that’s when they pay so they don’t pay anything until they in fact get the money they don’t pay bottom line Wonder trust anything till this letter is validated the check is on the way they deposit it into their bank account and they can truly trust Wonder trust that the procedure has been ended up and how many you believe you’ve processed considering that you started this we have to do with 35 000 of these for
about 6 billion dollars wow so clearly they know 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 discussing something truly essential today the worker retention credit which most of you have actually never heard of I certainly hadn’t heard of it till extremely recently and discovered a lot about it due to the fact that this is probably the lowest expense of capital for any small company anywhere
anytime if you have staff members in between 5 and five hundred so I have actually got the expert with me this is Josh Fox he’s the creator and CEO of bottom line Ideas they’re the largest 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 give me a loan it does not work there’s not a loan it’s an application and Josh is going to tell us all about it and how to get it and why I have actually become yes the Ambassador and paid representative for this I enjoy this program it’s disappearing soon you got to learn everything 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 provided services three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everybody it makes a big distinction right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the cash cash payroll tax refund all right go on sorry I just need to make sure we got that point I indicate that’s a big distinction a loan versus money cash I like cash cash that’s what we’re speaking about 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 original cares Act is the ERC and yes Kevin it is a beautiful tough check in the mail where you get real cash from the internal revenue service all right so let’s talk about how it works because it sounds like to me if it’s a if it’s employee retention credit that individual had to be an employee 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 staff members right you had to have actually owned a business however it’s based upon you having W-2 staff members in America not 10.99. so as long as you had W-2 employees 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 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 2 3 and 4 of 2020 and you had quarters one 2 and 3 of 2021. fine so that’s how it’s determined you have to be on the W-2 throughout that duration now let’s talk my favorite part cash just how much can you get back per worker that was on a W-2 in those six quarters so the calculation in 2020 to be specific Kevin is 50 of the staff member’s salary to an optimum of 5 thousand dollars per staff member for the year of 2020 and in 2021 the numbers increased to 70 of the worker’s income to a maximum of seven thousand per quarter how did that take place um they simply changed the rules in.
2021 versus due to the fact that the chaos of the pandemic so they wanted to even get more to keep those workers on payroll 100 so if you can get 5 000 per person Max in twenty that was 50 in 2020 approximately 5 thousand Max and after that what occurs 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 6 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 cash would need to be decreased 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 typically Kevin is if you took PPP money somewhere around 10 thousand dollars an individual 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 money you would still get a million dollar in the mail from the IRS so it’s substantial obviously now the big question is why does no one know about this because appearance when I first became aware of this when I initially met Josh you understand I’ve got lots of investments in great deals of business I’m a significant supporter for entrepreneurship in America and make lots of many financial investments in entrepreneurs of which numerous suffered through the pandemic when I initially became aware of this I called BS I do not believe it because I utilize 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 should have and we utilized them carefully to stay alive throughout the pandemic so when I heard about this I stated nah it can’t hold true however when I dug around I even called to my politician buddies Governor Senators they didn’t know about it I imply that’s how you know that’s how misinformation is that there’s no information out there then a bunch 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 nobody know about the worker retention credit you know what’s fascinating you’re talking about the banks Kevin since in the PPP loan procedure the federal government made it really clear that if you desired 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 process that’s all um and here there was turmoil due to the fact that remember in the original cares act you might not do both programs so if you had done PPP you could not do 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 any person about how to.
do this does your CFO know how to do this not really he or she’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 business your accounting professional no your accounting professional’s never ever done this before unless you have an account that entered into this company and bottom line my company Kevin has stayed in business given that 2009 and we have actually been working with the federal government and the state federal government to recuperate cash for Fortune 500 Fortune 1000 companies so a lot of our huge big corporate clients have worked with bottom line to recuperate other federal government programs we’ve done sales tax and utilize tax joblessness 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 designed to motivate.
employers to keep employees on their payroll. The credit is 50% of as much as $10,000 in salaries paid by an.
Due to the fact that of COVID-19 or whose gross receipts, company whose service is completely or partially suspended.
decrease by more than 50%.
1. The credit is available to all companies despite size consisting of tax exempt companies. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) little.
organizations 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 company’s service is totally or partially suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the comparable quarter in 2019. Once the.
company’s gross receipts go above 80% of a comparable quarter in 2019 they no longer certify.
after completion of that quarter.
Computation of the Credit.
The amount of the credit is 50% of the certifying incomes paid up to $10,000 in overall.
It is effective for earnings paid after March 13th and prior to December 31, 2020.
The definition of certifying earnings varies by whether a company had, on average, basically than.
100 staff members in 2019.
Business that specialize in ERC filing support usually offer proficiency and assistance to assist businesses browse the complex process of declaring the credit. They can provide numerous services, consisting of:.
How is the employee retention credit calculated? 941X For Employee Retention Credit
Eligibility Assessment: These business will assess your business’s eligibility for the ERC based upon factors such as your industry, income, and operations. If you satisfy the requirements for the credit and recognize the maximum credit quantity you can claim, they can help determine.
Documents and Estimation: ERC filing services will help in collecting the necessary documentation, such as payroll records and financial declarations, to support your claim. They will likewise help compute the credit amount based on qualified incomes and other qualifying costs.
Retroactive Claim Review: If you are qualified to claim the ERC for previous quarters, these companies can review your previous payroll records and financials to identify potential opportunities for retroactive credits. They can help you modify previous income tax return to declare these refunds.
Filing Assistance: Companies focusing on ERC filings will prepare and send the necessary types and documentation on your behalf. This consists of completing Form 941 or any other necessary tax return.
Compliance and Updates: ERC regulations and assistance have actually progressed with time. These business stay upgraded with the current modifications and guarantee that your filings comply with the most present guidelines. They can also offer ongoing assistance if the internal revenue service requests extra details or conducts an audit related to your ERC claim.
It is necessary to research study and veterinarian any business offering ERC filing support to guarantee their reliability and competence. Look for established firms with experience in tax and payroll services, or think about connecting to trusted accounting companies or tax experts who use ERC filing assistance.
Bear in mind that while these companies can supply valuable assistance, it’s constantly a great concept to have a standard understanding of the ERC requirements and process yourself. This will assist you make informed decisions and ensure accurate filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief procedures. The goal of the ERC is to motivate organizations to maintain and pay their staff members during the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to qualified companies, consisting of for-profit companies, tax-exempt companies, and particular governmental entities. To qualify, employers need to satisfy one of two criteria:.
The business operations were fully or partly suspended due to a federal government order related to COVID-19.
Business experienced a considerable decline in gross receipts. As pointed out previously, for 2021, a considerable decrease is defined 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 very same quarter in 2019, or a 20% decrease in gross invoices compared to the right away preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit amount is equal to a percentage (approximately 70%) of qualified wages paid to staff members, including particular health plan expenditures. 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 an Income Defense Program (PPP) loan were not qualified for the ERC. Nevertheless, 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 Arrangement: The ERC has been retroactively broadened and boosted, allowing eligible companies to claim the credit for certified wages paid as far back as March 13, 2020. This retroactive provision offers an opportunity for businesses to amend prior-year tax returns and get refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their employment income tax return, typically Kind 941. If the credit exceeds the quantity of work taxes owed, the excess can be reimbursed to the employer.
It is essential to keep in mind that the ERC provisions and eligibility criteria have actually evolved with time. The best strategy is to consult with a tax professional or go to the official IRS site for the most updated and detailed details regarding the ERC, consisting of any recent legal modifications or updates.
To receive the ERC, an organization should meet among the following criteria:.
Business operations were totally or partially suspended due to a government order related to COVID-19.
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 substantial decline is specified as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the immediately preceding quarter.
The ERC is offered to businesses of all sizes, consisting of tax-exempt companies, but there are some exceptions. Federal government entities and services that received a PPP loan may have constraints on declaring the credit.
The process for claiming the ERC involves finishing the necessary types and including the credit on your employment income tax return (normally Form 941). The exact time it requires to process the credit can vary based on a number of elements, including the complexity of your company and the work of the internal revenue service. It’s recommended to consult with a tax professional for guidance particular to your situation.
There are a number of companies that can assist with the process of declaring the ERC. These include accounting companies, tax advisory services, and payroll company. Some well-known business that use assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s recommended to research study and call these companies straight to ask about their costs and services.
Please note that the details provided here is based upon general understanding and may not reflect the most current updates or changes to the ERC. It is very important to talk to a tax expert or check out the official IRS site for the most updated and accurate information regarding eligibility, claiming procedures, and available assistance.
Less than 100. The credit is based if the employer had 100 or fewer staff members on average in 2019.
on incomes paid to all workers 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 company still gets the credit.
Greater than 100. If the employer had more than 100 employees typically 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” includes not simply cash payments however likewise a portion of the expense of company.
supplied health care. 941X For Employee Retention Credit
Employers can be instantly compensated for the credit by reducing the quantity of payroll taxes they.