Lets talk first about Example Of 941X With Employee Retention Credit :
Our team here what do these guys doing everybody in this space is helping teach people about ERC and uh always provide a gorgeous breakfast and have individuals really learn more about the program we need to head to the space 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 numerous millions of dollars literally Kevin hundreds of millions of dollars so these are duplicate copies of the letters that go to customers validating that the check is on the method I imply you understand if you simply begin to 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 suggest consider the number of real 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 confirmed and the check is on the mail in the mail from the internal revenue service heading to the client so that’s how you have the ability to track it you know when you
get this you know the check is gone for sure and that’s when they pay so they don’t pay anything up until they in fact receive the money they don’t pay bottom line Wonder trust anything up until this letter is confirmed the check is on the method they deposit it into their bank account and they can genuinely rely on Wonder trust that the procedure has actually been ended up and how many you believe you’ve processed because you began this we have to do with 35 000 of these for
about six 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 among these that’s what matters all right Mr Terrific here you’re at my YouTube channel we’re speaking about something actually essential today the employee retention credit which most of you have never become aware of I certainly hadn’t become aware of it till very just recently and learned a lot about it since this is most likely the most affordable cost of capital for any small business anywhere
anytime if you have employees between five and five hundred so I have actually got the expert with me this is Josh Fox he’s the founder and CEO of bottom line Principles 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 manager and state offer 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’ve become yes the Ambassador and paid spokesperson for this I like this program it’s going away soon you got to discover all 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 companies 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everyone 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.
correct the cash money payroll tax refund okay go on sorry I simply need to make sure we got that point I imply that’s a big distinction a loan versus cash money I like cash cash that’s what we’re talking 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 initial cares Act is the ERC and yes Kevin it is a lovely tough check in the mail where you get actual money from the IRS all right so let’s discuss how it works since 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 individuals on the cap table not for investors it’s for workers right you needed to have owned a business however it’s based upon you having W-2 employees 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 have to be on payroll in 2020 on the W-2 and you have to be on payroll for the first six 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 2 3 and four of 2020 and you had quarters one two and 3 of 2021. all right 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 worker that was on a W-2 in those 6 quarters so the computation in 2020 to be exact Kevin is 50 of the staff member’s wage 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 salary to a maximum of 7 thousand per quarter how did that occur um they simply altered the rules in.
2021 versus because the chaos of the pandemic so they wanted to even get more to keep those employees 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 after that what takes place 21 000 Max in 2021 oh that’s how you come up with twenty 6 thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty six thousand dollars per staff member that is because that’s a great deal of cash it is now there’s a caveat here the PPP money would need to be lowered 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 on average Kevin is if you took PPP cash somewhere around 10 thousand dollars a person 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 cash you would still get a million dollar in the mail from the IRS so it’s substantial certainly now the big concern is why does no one learn about this due to the fact that look when I first found out about this when I initially fulfilled Josh you understand I have actually got great deals of financial investments in great deals of business I’m a major supporter for entrepreneurship in America and make many many financial investments in business owners of which lots of suffered through the pandemic when I initially became aware of this I called BS I don’t believe it because I use the PPP we went through the cash 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 been worthy of and we used them wisely to survive throughout the pandemic so when I found out about this I said nah it can’t be true but when I dug around I even called to my politician buddies Guv Senators they didn’t learn about it I suggest 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 due to the fact that you took the PPP also not true so let’s ask Josh why does no one learn about the employee retention credit you know what’s fascinating you’re speaking 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 country and they would process process in Canada a pre-pp loan there’s no loans in Canada by the way it’s just procedure procedure that’s all um and here there was chaos because keep in mind in the initial cares act you might refrain from doing both programs so if you had done PPP you might refrain from doing ERC in the original program and when they changed the law in 2021 the banks were not doing ERC because it’s not alone so you’re getting a tax refund so the federal government never ever made it clear to anybody about how to.
do this does your CFO understand how to do this not really he or she’s never ever done it before do the banks do it nope the banks don’t do it the payroll companies yeah a few of them are doing it as a payroll company your accountant no your accounting professional’s never done this before unless you have an account that went into this organization and bottom line my firm Kevin has been in business considering that 2009 and we’ve been working with the federal government and the state government to recover money for Fortune 500 Fortune 1000 companies so a lot of our huge big business clients have worked with bottom line to recover other federal government programs we have actually done sales tax and utilize tax unemployment tax work chance tax credits research and development tax credits unclaimed property real estate tax all of these other federal government programs.
The staff member retention tax credit is a broad based refundable tax credit designed to encourage.
employers to keep employees on their payroll. The credit is 50% of as much as $10,000 in earnings paid by an.
Because of COVID-19 or whose gross receipts, company whose business is totally or partly suspended.
decrease by more than 50%.
1. The credit is readily available to all employers despite size consisting of tax exempt organizations. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) little.
services who take Small company Loans.
2. To qualify, the employer has to satisfy one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s organization is totally or partly suspended by government order due to COVID-19.
during the calendar quarter or.
o the company’s gross invoices are below 50% of the comparable quarter in 2019. When the.
company’s gross receipts exceed 80% of a similar quarter in 2019 they no longer certify.
after completion of that quarter.
Computation of the Credit.
The quantity of the credit is 50% of the certifying incomes paid up to $10,000 in total.
It is effective for incomes paid after March 13th and before December 31, 2020.
The meaning of certifying incomes differs by whether an employer had, typically, basically than.
100 employees in 2019.
Business that specialize in ERC filing support usually provide knowledge and assistance to help organizations navigate the complex process of claiming the credit. They can offer numerous services, including:.
How is the employee retention credit calculated? Example Of 941X With Employee Retention Credit
Eligibility Evaluation: These business will evaluate your service’s eligibility for the ERC based upon aspects such as your industry, revenue, and operations. If you fulfill the requirements for the credit and identify the maximum credit amount you can claim, they can assist figure out.
Documents and Computation: ERC filing services will help in gathering the needed documents, such as payroll records and financial declarations, to support your claim. They will also assist compute the credit quantity based upon qualified earnings and other certifying costs.
Retroactive Claim Review: If you are eligible to declare the ERC for prior quarters, these companies can examine your previous payroll records and financials to determine potential chances for retroactive credits. They can help you amend prior tax returns to claim these refunds.
Filing Assistance: Business specializing in ERC filings will prepare and submit the needed forms and documentation on your behalf. This includes finishing Form 941 or any other required tax forms.
Compliance and Updates: ERC regulations and guidance have actually progressed over time. These business remain upgraded with the most recent modifications and ensure that your filings abide by the most current standards. They can likewise provide continuous assistance if the IRS requests extra info or carries out an audit related to your ERC claim.
It is essential to research study and veterinarian any company offering ERC filing support to ensure 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 experts who offer ERC filing assistance.
Remember that while these companies can offer valuable help, it’s constantly a great idea to have a basic understanding of the ERC requirements and process yourself. This will assist you make informed choices and guarantee precise filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief procedures. The goal of the ERC is to encourage companies to keep and pay their workers during the pandemic, even if their operations have been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is available to qualified employers, including for-profit businesses, tax-exempt companies, and certain governmental entities. To certify, employers need to satisfy one of two requirements:.
The business operations were totally or partially suspended due to a government order related to COVID-19.
The business experienced a considerable decrease in gross invoices. As mentioned previously, for 2021, a significant decline is specified as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decline in gross invoices compared to the 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 portion (up to 70%) of qualified earnings paid to employees, consisting of particular health plan expenses. The optimum credit per staff member 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 eligible for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 permits companies to declare the ERC even if they got a PPP loan. However, the same wages 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 employers to claim the credit for qualified earnings paid as far back as March 13, 2020. This retroactive provision offers a chance for companies to modify prior-year income tax return and receive refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their work income tax return, generally Type 941. The excess can be reimbursed to the company if the credit goes beyond the quantity of employment taxes owed.
It is necessary to note that the ERC arrangements and eligibility criteria have actually developed with time. The best strategy is to talk to a tax expert or visit the official IRS website for the most updated and in-depth details regarding the ERC, including any current legal modifications or updates.
To qualify for the ERC, a service must meet one of the following requirements:.
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. For 2021, a substantial decline is defined as a 20% decline in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
The ERC is offered to organizations of all sizes, including tax-exempt organizations, however there are some exceptions. Federal government entities and services that received a PPP loan might have limitations on declaring the credit.
The procedure for declaring the ERC involves finishing the required kinds and consisting of the credit on your work income tax return (typically Type 941). The exact time it requires to process the credit can differ based upon a number of elements, consisting of the complexity of your company and the work of the internal revenue service. It’s recommended to talk to a tax professional for assistance specific to your scenario.
There are a number of companies that can assist with the process of declaring the ERC. Some widely known business that use support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the information offered here is based on basic understanding and might not show the most recent updates or modifications to the ERC. It’s important to speak with a tax professional or check out the official internal revenue service site for the most updated and precise info regarding eligibility, claiming procedures, and offered assistance.
Less than 100. If the employer had 100 or fewer employees usually in 2019, then the credit is based.
on wages paid to all employees whether they in fact worked or not. In other words, even if the.
staff members worked full-time and made money for full-time work, the company still gets the credit.
Greater than 100. The credit is if the company had more than 100 staff members on average in 2019.
permitted only for earnings paid to workers who did not work during the calendar quarter.
In both cases, “wages” includes not just money payments however likewise a part of the expense of employer.
offered healthcare. Example Of 941X With Employee Retention Credit
Companies can be instantly compensated for the credit by minimizing the quantity of payroll taxes they.