Lets talk first about Filing 941 X For Employee Retention Credit :
Our team here what do these guys doing everyone in this room is assisting teach individuals about ERC and uh constantly provide a gorgeous breakfast and have individuals really find out about the program we should head to the room where we have the ability 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 hundreds of millions of dollars actually Kevin numerous countless dollars so these are duplicate copies of the letters that go to clients verifying that the check is on the way I indicate you know if you simply begin to look at some 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 just I imply think about the number of real clients that went through the program yeah this is the very end this is the party at the end when the check is confirmed the numbers are validated and the check is on the mail in the mail from the IRS heading to the consumer so that’s how you have the ability to track it you understand when you
receive this you know the check is gone for sure and that’s when they pay so they don’t pay anything until they really receive the cash they do not pay bottom line Wonder trust anything till this letter is confirmed the check is on the way they deposit it into their savings account and they can really trust Wonder trust that the procedure has been completed and how many you believe you have actually processed considering that you started 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 need experts 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 speaking about something actually important today the staff member retention credit which most of you have never become aware of I certainly had not heard of it till extremely 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 business anywhere
anytime if you have staff members between five 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 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 simply call your bank supervisor and say provide me a loan it doesn’t 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 spokesperson for this I enjoy this program it’s disappearing soon you got to discover all about it let’s talk employee retention credit Josh Fox what is an ERC let’s just begin there so during the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act provided companies three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everyone it makes a big distinction right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
fix the money money payroll tax refund fine go on sorry I simply need to make certain we got that point I suggest that’s a huge distinction a loan versus cash money I like money cash 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 gorgeous hard check in the mail where you get real money from the IRS all right so let’s discuss how it works since it seems like to me if it’s a if it’s worker retention credit that individual needed to be a staff member so I’m going to make the Presumption this cash is not for the owner not for people on the cap table not for investors it’s for staff members right you needed to have owned a company but it’s based on you having W-2 employees in America not 10.99. so 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 6 months of 2021 on the W-2 right so there were 6 quarters the program was open well stroll us through the six quarters so you had quarters two three and 4 of 2020 and you had quarters one 2 and 3 of 2021. fine so that’s how it’s measured you have to be on the W-2 throughout that duration now let’s talk my favorite part money how much can you get back per employee that was on a W-2 in those six quarters so the calculation in 2020 to be precise Kevin is 50 of the employee’s wage to a maximum of 5 thousand dollars per staff member for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s salary to an optimum of seven thousand per quarter how did that take place um they simply altered the rules in.
2021 versus because the turmoil of the pandemic so they wished 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 as much as five thousand Max and then what takes place 21 000 Max in 2021 oh that’s how you create twenty 6 thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty six thousand dollars per employee that is since that’s a lot of cash it is now there’s a caution here the PPP money would have to be lowered 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 usually Kevin is if you took PPP money somewhere around ten thousand dollars an individual 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 internal revenue service so it’s substantial certainly now the huge concern is why does nobody learn about this due to the fact that appearance when I initially heard about this when I initially met Josh you understand I have actually got lots of investments in lots of business I’m a major supporter for entrepreneurship in America and make numerous many investments in business owners of which numerous suffered through the pandemic when I first found out about this I called BS I do not believe it because I utilize the PPP we went through the money center Banks to get it it was extremely easy to do we had our CEOs call the banks they got their loans and that were well should have and we used them carefully to stay alive throughout the pandemic so when I became aware of this I said nah it can’t be true however when I dug around I even contacted us to my politician good friends Governor Senators they didn’t understand about it I indicate that’s how you know that’s how misinformation is that there’s no info out there then a bunch of individuals informed me well you can’t get it because you took the PPP likewise not true so let’s ask Josh why does nobody understand about the employee retention credit you understand what’s fascinating you’re speaking about the banks Kevin because 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 huge banks in our country and they would process procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s just process process that’s all um and here there was chaos since keep in mind in the initial cares act you might refrain from doing both programs so if you had actually 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 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 anybody about how to.
do this does your CFO know how to do this not really he or she’s never done it before do the banks do it nope the banks don’t do it the payroll companies yeah some of them are doing it as a payroll company your accountant no your accountant’s never ever done this before unless you have an account that entered into this organization and bottom line my company Kevin has actually stayed in business because 2009 and we’ve been dealing with the federal government and the state federal government to recover cash for Fortune 500 Fortune 1000 companies so a lot of our big huge business customers have actually dealt with bottom line to recover other government programs we’ve done sales tax and utilize tax joblessness tax work chance tax credits research and development tax credits unclaimed home real estate tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit developed to encourage.
employers to keep employees on their payroll. The credit is 50% of approximately $10,000 in earnings paid by an.
Due to the fact that of COVID-19 or whose gross invoices, company whose business is fully or partially suspended.
decline by more than 50%.
1. The credit is offered to all employers regardless of size consisting of tax exempt organizations. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) little.
companies who take Small company Loans.
2. To certify, the employer needs to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s business is completely or partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross receipts are below 50% of the comparable quarter in 2019. Once the.
employer’s gross invoices go above 80% of a comparable quarter in 2019 they no longer qualify.
after completion of that quarter.
Estimation of the Credit.
The quantity of the credit is 50% of the qualifying earnings paid up to $10,000 in total.
It works for incomes paid after March 13th and prior to December 31, 2020.
The definition of qualifying incomes varies by whether an employer had, on average, basically than.
100 staff members in 2019.
Business that specialize in ERC filing support usually provide know-how and support to help companies browse the intricate process of claiming the credit. They can use numerous services, including:.
How is the employee retention credit calculated? Filing 941 X For Employee Retention Credit
Eligibility Evaluation: These business will examine your company’s eligibility for the ERC based on aspects such as your industry, revenue, and operations. They can help determine if you fulfill the requirements for the credit and determine the optimum credit amount you can claim.
Documents and Estimation: ERC filing services will assist in collecting the needed paperwork, such as payroll records and financial declarations, to support your claim. They will likewise help compute the credit amount based upon eligible incomes and other qualifying expenditures.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for previous quarters, these companies can review your past payroll records and financials to identify possible chances for retroactive credits. They can help you change previous income tax return to claim these refunds.
Filing Help: Business focusing on ERC filings will prepare and send the necessary kinds and documentation in your place. This includes completing Type 941 or any other required tax forms.
Compliance and Updates: ERC guidelines and guidance have actually progressed in time. These business remain upgraded with the most recent modifications and guarantee that your filings adhere to the most present guidelines. They can also offer ongoing assistance if the internal revenue service demands additional information or conducts an audit related to your ERC claim.
It is very important to research study and veterinarian any business providing ERC filing assistance to ensure their credibility and proficiency. Try to find recognized firms with experience in tax and payroll services, or think about connecting to relied on accounting companies or tax experts who offer ERC filing assistance.
Keep in mind that while these companies can offer valuable help, it’s always a great idea to have a basic understanding of the ERC requirements and process yourself. This will assist you make notified choices and make sure accurate filings.
The Worker Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief steps. The goal of the ERC is to encourage services to keep and pay their employees throughout the pandemic, even if their operations have been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to eligible employers, including for-profit companies, tax-exempt organizations, and certain governmental entities. To certify, employers need to fulfill one of two criteria:.
The business operations were fully or partly suspended due to a government order related to COVID-19.
Business experienced a significant decline in gross invoices. As pointed out earlier, for 2021, a considerable decline is defined as a 20% decrease in gross invoices 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 receipts compared to the instantly preceding quarter.
Credit Quantity: 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 (approximately 70%) of qualified incomes paid to staff members, including specific health insurance expenses. The maximum credit per staff member is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, companies that received a Paycheck Defense Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 allows services to claim the ERC even if they received a PPP loan. The exact same wages can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and enhanced, enabling qualified companies to claim the credit for certified salaries paid as far back as March 13, 2020. This retroactive arrangement provides a chance for services to change prior-year income tax return and get refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their employment income tax return, typically Form 941. If the credit goes beyond the quantity of work taxes owed, the excess can be refunded to the company.
It’s important to keep in mind that the ERC arrangements and eligibility requirements have developed in time. The best strategy is to speak with a tax expert or check out the main internal revenue service site for the most detailed and current details relating to the ERC, including any current legal changes or updates.
To receive the ERC, an organization needs to fulfill one of the following criteria:.
The business operations were completely or partly suspended due to a federal government order related to COVID-19.
The business experienced a considerable decline in gross invoices. For 2021, a considerable decline is specified as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decline in gross receipts compared to the very same quarter in 2019, or a 20% decline in gross receipts compared to the right away preceding quarter.
The ERC is offered to organizations of all sizes, consisting of tax-exempt companies, but there are some exceptions. For instance, government entities and companies that received a PPP loan might have limitations on declaring the credit.
The procedure for claiming the ERC includes finishing the essential kinds and consisting of the credit on your employment income tax return (usually Type 941). The exact time it takes to process the credit can vary based upon numerous elements, consisting of the intricacy of your organization and the workload of the IRS. It’s suggested to speak with a tax expert for guidance specific to your scenario.
There are several business that can help with the procedure of declaring the ERC. These consist of accounting firms, tax advisory services, and payroll company. Some popular companies that offer help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research and get in touch with these business straight to ask about their services and charges.
Please keep in mind that the information provided here is based upon basic understanding and might not reflect the most current updates or modifications to the ERC. It’s important to consult with a tax expert or check out the main internal revenue service website for the most precise and updated information regarding eligibility, claiming treatments, and readily available assistance.
Less than 100. If the employer had 100 or fewer staff members usually in 2019, then the credit is based.
on salaries paid to all workers whether they really worked or not. Simply put, even if the.
staff members worked full time and earned money for full-time work, the employer still gets the credit.
Greater than 100. If the employer had more than 100 workers typically in 2019, then the credit is.
enabled only for wages paid to employees who did not work during the calendar quarter.
In both cases, “earnings” consists of not just cash payments but likewise a portion of the expense of employer.
supplied healthcare. Filing 941 X For Employee Retention Credit
Employers can be instantly reimbursed for the credit by reducing the quantity of payroll taxes they.