Lets talk first about 941 Employee Retention Credit Ppp :
Our team here what do these people doing everyone in this space is assisting teach individuals about ERC and uh always provide a beautiful breakfast and have individuals actually learn about the program we should head to the room where we are able to show a few of the checks that we are getting for companies and I ‘d like to see that what is this this is uh numerous countless dollars actually Kevin hundreds of millions of dollars so these are duplicate copies of the letters that go to clients validating that the check is on the method I mean you know if you just start to take a 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 mean it’s simply I mean think about how many actual clients that went through the program yeah this is the very end this is the party 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 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 do not pay anything until they in fact get the money they don’t pay bottom line Wonder trust anything until this letter is validated the check is on the method they transfer it into their bank account and they can really trust Wonder trust that the process has been completed and the number of you think you have actually processed considering that you began this we’re about 35 000 of these for
about six billion dollars wow so plainly they know what they’re doing and that’s what you need you require experts on the other end of the phone to process this and get it to where you get one of these that’s what matters all right Mr Terrific here you’re at my YouTube channel we’re discussing something truly important today the worker retention credit which most of you have never ever become aware of I definitely hadn’t heard of it till extremely just recently and learned a lot about it due to the fact that this is most likely the lowest expense of capital for any small business anywhere
anytime if you have workers 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 Principles they’re the biggest processor of these ERC credits this is a 170 page program so it’s hard this isn’t like PPP we just call your bank manager and say offer me a loan it doesn’t 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 ended up being yes the Ambassador and paid spokesperson for this I love this program it’s going away very soon you got to learn everything about it let’s talk worker retention credit Josh Fox what is an ERC let’s just begin there so during 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 nearly 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.
correct the cash money payroll tax refund all right go on sorry I simply have to make certain we got that point I imply that’s a big distinction a loan versus money cash I like cash cash that’s what we’re talking about fine 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 tough check in the mail where you get real money from the internal revenue service all right so let’s speak about how it works since it sounds like to me if it’s a if it’s staff member retention credit that person needed to be a worker so I’m going to make the Assumption this cash is not for the owner not for people on the cap table not for shareholders it’s for workers right you had to have actually owned an organization but it’s based upon you having W-2 employees 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 first 6 months of 2021 on the W-2 right so there were 6 quarters the program was open well stroll us through the 6 quarters so you had quarters two 3 and 4 of 2020 and you had quarters one 2 and three of 2021. fine so that’s how it’s measured you have to be on the W-2 throughout that period now let’s talk my favorite 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 specific Kevin is 50 of the employee’s salary to an optimum of 5 thousand dollars per employee 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 occur um they just altered the rules in.
2021 versus since the turmoil 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 up to 5 thousand Max and then 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 6 thousand dollars per worker that is since that’s a lot of money it is now there’s a caveat here the PPP cash would need to be minimized 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 on average Kevin is if you took PPP money someplace 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 workers 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 huge concern is why does no one know about this due to the fact that look when I first became aware of this when I initially fulfilled Josh you understand I’ve got great deals of investments in lots of companies I’m a significant supporter for entrepreneurship in America and make numerous numerous investments in entrepreneurs of which numerous suffered through the pandemic when I initially became aware of this I called BS I don’t believe it due to the fact that I use 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 which were well deserved and we used them sensibly to stay alive during the pandemic so when I became aware of this I stated 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 mean that’s how you know that’s how false information 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 real so let’s ask Josh why does nobody know about the employee retention credit you know what’s intriguing you’re discussing the banks Kevin due to the fact that in the PPP loan process 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 could not do both programs so if you had 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 because it’s not alone so you’re getting a tax refund so the federal government never ever made it clear to any person about how to.
do this does your CFO understand how to do this not really he or she’s never done it previously 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 accounting professional no your accounting professional’s never ever done this prior to unless you have an account that went into this service and bottom line my firm Kevin has been in business since 2009 and we’ve been dealing with the federal government and the state government to recover cash for Fortune 500 Fortune 1000 business so a great deal of our huge big corporate customers have actually worked with bottom line to recover other government programs we’ve done sales tax and utilize tax unemployment tax work opportunity 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.
companies to keep workers on their payroll. The credit is 50% of approximately $10,000 in wages paid by an.
Because of COVID-19 or whose gross invoices, employer whose service is fully or partially suspended.
decrease by more than 50%.
1. The credit is available to all companies no matter size consisting of tax exempt companies. There are.
just 2 exceptions: (1) state and local governments and their instrumentalities and (2) little.
businesses who take Small company Loans.
2. To qualify, the employer needs to satisfy one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the company’s business is fully or partially suspended by government order due to COVID-19.
during the calendar quarter or.
o the company’s gross invoices are listed below 50% of the similar quarter in 2019. Once the.
employer’s gross invoices go above 80% of a comparable quarter in 2019 they no longer certify.
after completion of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the certifying salaries paid up to $10,000 in total.
It works for earnings paid after March 13th and prior to December 31, 2020.
The meaning of certifying salaries varies by whether a company had, usually, more or less than.
100 employees in 2019.
Companies that concentrate on ERC filing support normally supply knowledge and assistance to help services navigate the complicated process of declaring the credit. They can provide various services, including:.
How is the employee retention credit calculated? 941 Employee Retention Credit Ppp
Eligibility Assessment: These business will evaluate your business’s eligibility for the ERC based on factors such as your industry, revenue, and operations. They can assist identify if you meet the requirements for the credit and recognize the maximum credit quantity you can declare.
Documentation and Calculation: ERC filing services will assist in gathering the necessary documentation, such as payroll records and monetary statements, to support your claim. They will likewise help compute the credit quantity based upon eligible salaries and other certifying expenses.
Retroactive Claim Review: If you are eligible to claim the ERC for previous quarters, these companies can review your previous payroll records and financials to determine potential chances for retroactive credits. They can assist you amend previous income tax return to declare these refunds.
Filing Support: Business concentrating on ERC filings will prepare and send the necessary forms and documents on your behalf. This includes completing Form 941 or any other necessary tax return.
Compliance and Updates: ERC guidelines and assistance have evolved in time. These business remain upgraded with the most recent modifications and ensure that your filings abide by the most existing guidelines. If the IRS requests additional information or conducts an audit associated to your ERC claim, they can likewise offer continuous assistance.
It is essential to research study and veterinarian any company providing ERC filing help to ensure their trustworthiness and knowledge. Search for recognized firms with experience in tax and payroll services, or think about connecting to trusted accounting companies or tax experts who provide ERC submitting assistance.
Bear in mind that while these business can supply valuable support, it’s constantly a great concept to have a standard understanding of the ERC requirements and process yourself. This will help 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 objective of the ERC is to encourage businesses to maintain and pay their employees throughout the pandemic, even if their operations have actually been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to qualified employers, consisting of for-profit companies, tax-exempt organizations, and particular governmental entities. To certify, employers need to meet one of two criteria:.
The business operations were totally or partly suspended due to a government order related to COVID-19.
Business experienced a significant decline in gross invoices. As mentioned earlier, for 2021, a substantial decline is specified as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decline in gross invoices compared to the same quarter in 2019, or a 20% decrease in gross receipts compared to the immediately 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 percentage (up to 70%) of qualified incomes paid to workers, consisting of specific health insurance costs. The optimum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, companies that received an Income Defense Program (PPP) loan were not qualified for the ERC. However, legislation passed in late 2020 and extended in 2021 permits companies to claim the ERC even if they got a PPP loan. Nevertheless, the exact same wages can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and boosted, permitting qualified employers to declare the credit for qualified salaries paid as far back as March 13, 2020. This retroactive arrangement offers an opportunity for companies to amend prior-year income tax return and get refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their employment income tax return, usually Type 941. The excess can be refunded to the employer if the credit exceeds the quantity of employment taxes owed.
It’s important to keep in mind that the ERC provisions and eligibility criteria have actually progressed with time. The best strategy is to seek advice from a tax expert or go to the official IRS site for the most in-depth and up-to-date information regarding the ERC, including any recent legal modifications or updates.
To get approved for the ERC, a business must meet one of the following criteria:.
The business operations were totally or partly suspended due to a federal government order related to COVID-19.
Business experienced a substantial decrease in gross invoices. For 2021, a significant decline is defined as a 20% decrease in gross invoices compared to the 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 receipts compared to the right away preceding quarter.
The ERC is offered to services of all sizes, consisting of tax-exempt organizations, however there are some exceptions. For instance, government entities and businesses that received a PPP loan may have restrictions on declaring the credit.
The process for declaring the ERC includes finishing the needed forms and consisting of the credit on your work income tax return (generally Type 941). The exact time it takes to process the credit can vary based upon a number of factors, consisting of the intricacy of your organization and the work of the internal revenue service. It’s advised to seek advice from a tax professional for guidance particular to your situation.
There are numerous companies that can help with the process of declaring the ERC. These include accounting firms, tax advisory services, and payroll company. Some popular companies that use help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young. It’s suggested to research and get in touch with these business directly to inquire about their fees and services.
Please note that the details offered here is based on basic knowledge and may not reflect the most recent updates or modifications to the ERC. It is necessary to speak with a tax professional or visit the official internal revenue service website for the most updated and accurate info concerning eligibility, claiming procedures, and readily available assistance.
Less than 100. The credit is based if the employer had 100 or less employees on average in 2019.
on salaries paid to all employees whether they actually 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 employer had more than 100 staff members on average in 2019.
permitted only for earnings paid to staff members who did not work during the calendar quarter.
In both cases, “incomes” includes not just money payments but likewise a portion of the expense of company.
provided health care. 941 Employee Retention Credit Ppp
Employers can be immediately compensated for the credit by minimizing the quantity of payroll taxes they.