Lets talk first about Employee Retention Credit 941 X :
Our team here what do these people doing everyone in this space is helping teach people about ERC and uh always supply a stunning breakfast and have individuals really learn about the program we need to 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 literally Kevin numerous countless dollars so these are duplicate copies of the letters that go to customers verifying that the check is on the method I mean you understand if you simply begin to look at a few of these here I mean this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I mean it’s just I imply consider how many actual customers that went through the program yeah this is the very end this is the celebration at the end when the check is validated the numbers are validated and the check is on the mail in the mail from the IRS heading to the client so that’s how you’re able to track it you understand when you
get this you understand the check is gone for sure which’s when they pay so they don’t pay anything up until they in fact get the cash they do not pay bottom line Wonder trust anything until this letter is verified the check is on the method they transfer it into their checking account and they can truly rely on Wonder trust that the procedure has actually been ended up and the number of you think you’ve processed considering that 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 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 talking about something really important today the staff member retention credit which the majority of you have never heard 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 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 difficult this isn’t like PPP we just call your bank supervisor and say give me a loan it doesn’t work there’s not a loan it’s an application and Josh is going to tell all of us about it and how to get it and why I’ve become yes the Ambassador and paid spokesperson for this I love this program it’s going away soon you got to find out all about it let’s talk worker retention credit Josh Fox what is an ERC let’s simply start there so throughout the Trump Administration when President Trump was enacted they created the cares Act and the cares act used businesses three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everybody it makes a huge difference right there two 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 fine go on sorry I simply have to make sure we got that point I mean that’s a big difference a loan versus money cash I like cash cash 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 beautiful hard check in the mail where you get actual cash from the IRS all right so let’s speak about how it works because it sounds 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 Presumption this cash is not for the owner not for individuals on the cap table not for investors it’s for staff members right you had to have actually owned a service however it’s based on you having W-2 employees in America not 10.99. As long as you had W-2 workers and you paid federal payroll taxes that’s why you would be eligible so you have to be on payroll in 2020 on the W-2 and you have to be on payroll for the very first six months of 2021 on the W-2 correct so there were 6 quarters the program was open well stroll us through the 6 quarters so you had quarters 2 three and 4 of 2020 and you had quarters one two and three of 2021. okay 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 how much can you get back per employee that was on a W-2 in those 6 quarters so the computation in 2020 to be specific Kevin is 50 of the employee’s salary to a maximum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the employee’s income to a maximum of seven thousand per quarter how did that happen um they simply changed the rules in.
2021 versus because the turmoil 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 as much as 5 thousand Max and then what happens 21 000 Max in 2021 oh that’s how you create twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty 6 thousand dollars per worker that is because that’s a lot of money it is now there’s a caveat here the PPP cash would need to be lowered from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would lower the 26 000 so what we’re seeing on average 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 City where I’m from and you had a hundred employees and you took PPP cash you would still get a million dollar in the mail from the IRS so it’s huge certainly now the big concern is why does nobody understand about this due to the fact that look when I initially heard about this when I first fulfilled Josh you know I’ve got lots of investments in lots of companies I’m a significant supporter for entrepreneurship in America and make many lots of investments in business owners of which many suffered through the pandemic when I first heard about this I called BS I do not think it since I utilize the PPP we went through the money 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 been worthy of and we used them sensibly to stay alive during the pandemic so when I heard about this I stated nah it can’t hold true but when I dug around I even called to my politician pals Guv Senators they didn’t understand about it I imply that’s how you understand 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 because you took the PPP also not true so let’s ask Josh why does no one learn about the worker retention credit you understand what’s interesting you’re talking about the banks Kevin because 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 big 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 turmoil due to the fact that remember in the initial cares act you might not do both programs so if you had actually done PPP you could not do ERC in the original program and when they changed the law in 2021 the banks were not doing ERC due to the fact that 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 understand how to do this not actually she or he’s never ever done it before do the banks do it nope the banks do not do it the payroll business yeah a few of them are doing it as a payroll company your accounting professional no your accountant’s never ever 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 have actually been dealing with the federal government and the state federal government to recover cash for Fortune 500 Fortune 1000 business so a lot of our big huge business clients have worked with bottom line to recuperate other government programs we have actually done sales tax and use tax joblessness tax work chance 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 designed to encourage.
employers to keep workers on their payroll. The credit is 50% of as much as $10,000 in wages paid by an.
company whose company is fully or partially suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
1. The credit is offered to all employers despite size including tax exempt organizations. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) little.
companies who take Small Business Loans.
2. To certify, the company has to meet one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s organization 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 equivalent quarter in 2019. Once the.
employer’s gross receipts exceed 80% of an equivalent quarter in 2019 they no longer certify.
after the end of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the qualifying earnings paid up to $10,000 in overall.
It is effective for incomes paid after March 13th and prior to December 31, 2020.
The meaning of qualifying wages varies by whether a company had, usually, more or less than.
100 staff members in 2019.
Companies that concentrate on ERC filing support normally supply proficiency and assistance to help services navigate the complicated process of claiming the credit. They can offer different services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit 941 X
Eligibility Assessment: These business will evaluate your organization’s eligibility for the ERC based on aspects such as your industry, revenue, and operations. They can assist determine if you satisfy the requirements for the credit and determine the optimum credit amount you can claim.
Documents and Calculation: ERC filing services will assist in collecting the essential documentation, such as payroll records and monetary declarations, to support your claim. They will likewise help calculate the credit quantity based upon eligible salaries and other certifying costs.
Retroactive Claim Evaluation: If you are eligible to claim the ERC for previous quarters, these business can review your previous payroll records and financials to determine potential chances for retroactive credits. They can help you change previous tax returns to declare these refunds.
Filing Assistance: Companies concentrating on ERC filings will prepare and send the necessary forms and documents in your place. This includes finishing Form 941 or any other required tax return.
Compliance and Updates: ERC guidelines and guidance have progressed in time. These business stay upgraded with the most recent modifications and make sure that your filings adhere to the most present standards. If the IRS demands extra information or carries out an audit related to your ERC claim, they can also provide ongoing support.
It’s important to research and vet any company offering ERC filing assistance to ensure their credibility and proficiency. Search for established firms with experience in tax and payroll services, or consider connecting to relied on accounting firms or tax specialists who use ERC submitting assistance.
Remember that while these business can provide important help, it’s constantly an excellent idea to have a basic understanding of the ERC requirements and process yourself. This will assist you make notified choices and ensure precise filings.
The Employee Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief measures. The goal of the ERC is to motivate businesses to maintain and pay their workers throughout the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to eligible companies, consisting of for-profit organizations, tax-exempt organizations, and specific governmental entities. To qualify, employers must fulfill one of two requirements:.
The business operations were fully or partially suspended due to a government order related to COVID-19.
The business experienced a substantial decrease in gross invoices. As mentioned earlier, for 2021, a substantial decline is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decrease in gross receipts compared to the same quarter in 2019, or a 20% decline 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 amount is equal to a percentage (approximately 70%) of qualified wages paid to employees, including specific health insurance expenses. The maximum 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 Protection Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 enables organizations to claim the ERC even if they received a PPP loan. However, the same salaries 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 qualified employers to declare the credit for certified wages paid as far back as March 13, 2020. This retroactive arrangement offers a chance for businesses to amend prior-year income tax return and receive refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their work tax returns, generally Form 941. If the credit exceeds the quantity of employment taxes owed, the excess can be refunded to the company.
It’s important to note that the ERC provisions and eligibility requirements have progressed over time. The very best course of action is to talk to a tax professional or visit the official IRS website for the most in-depth and current info regarding the ERC, consisting of any current legislative modifications or updates.
To receive the ERC, a service must meet one of the following requirements:.
The 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 significant decrease 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% decline in gross invoices 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 businesses of all sizes, including tax-exempt organizations, but there are some exceptions. Federal government entities and organizations that got a PPP loan might have limitations on claiming the credit.
The procedure for claiming the ERC includes completing the needed types and consisting of the credit on your employment tax return (usually Type 941). The exact time it takes to process the credit can differ based upon numerous aspects, consisting of the complexity of your company and the work of the IRS. It’s recommended to consult with a tax expert for guidance particular to your circumstance.
There are several business that can assist with the process of declaring the ERC. These include accounting firms, tax advisory services, and payroll provider. Some well-known companies that provide help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research study and call these companies directly to ask about their services and costs.
Please keep in mind that the details provided here is based on basic knowledge and might not reflect the most current updates or modifications to the ERC. It is very important to seek advice from a tax expert or check out the official IRS site for the most current and precise details regarding eligibility, declaring procedures, and readily available assistance.
Less than 100. If the employer had 100 or fewer staff members typically in 2019, then the credit is based.
on incomes paid to all staff members whether they really worked or not. In other words, even if the.
workers worked full time and made money 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.
enabled just for earnings paid to employees who did not work during the calendar quarter.
In both cases, “wages” includes not just cash payments but likewise a portion of the expense of employer.
supplied health care. Employee Retention Credit 941 X
Employers can be instantly reimbursed for the credit by lowering the amount of payroll taxes they.