Lets talk first about Employee Retention Credit 941 :
Our group here what do these people doing everyone in this room is helping teach individuals about ERC and uh always supply a gorgeous breakfast and have individuals truly find out about the program we must head to the space where we have the ability to display 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 customers validating that the check is on the method I suggest you understand if you simply start 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 suggest it’s simply I indicate consider the number of real clients that went through the program yeah this is the very end this is the celebration at the end when the check is confirmed the numbers are verified and the check is on the mail in the mail from the internal revenue service heading to the customer so that’s how you have the ability to track it you understand when you
get this you know the check is gone for sure which’s when they pay so they do not pay anything up until they in fact receive the cash they do not pay bottom line Wonder trust anything till this letter is validated the check is on the method they transfer it into their savings account and they can truly trust Wonder trust that the process has been finished and how many you think you’ve processed since you began this we’re about 35 000 of these for
about 6 billion dollars wow so clearly they understand what they’re doing which’s what you require you need 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 Wonderful here you’re at my YouTube channel we’re discussing something really important today the staff member retention credit which the majority of you have never heard of I certainly had not become aware of it up until really just recently and discovered a lot about it since this is probably the most affordable cost of capital for any small business anywhere
anytime if you have staff members in between five and five hundred so I’ve 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 just call your bank supervisor and say offer me a loan it does not 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 ended up being yes the Ambassador and paid representative for this I like this program it’s disappearing soon you got to find out all about it let’s talk worker retention credit Josh Fox what is an ERC let’s just begin there so throughout the Trump Administration when President Trump was enacted they developed the cares Act and the cares act offered services three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically 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 money money payroll tax refund alright go on sorry I just need to make certain we got that point I imply that’s a big distinction a loan versus money cash I like cash money that’s what we’re talking 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 initial cares Act is the ERC and yes Kevin it is a stunning hard check in the mail where you get actual cash from the internal revenue service 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 had to be a staff member so I’m going to make the Assumption this money is not for the owner not for individuals on the cap table not for shareholders it’s for employees right you needed to have owned a company but it’s based upon you having W-2 workers 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 need to be on payroll in 2020 on the W-2 and you need to be on payroll for the very first six months of 2021 on the W-2 correct so there were six quarters the program was open well stroll 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. fine so that’s how it’s measured you need to be on the W-2 throughout that duration now let’s talk my preferred part cash how much can you get back per staff member that was on a W-2 in those 6 quarters so the calculation in 2020 to be exact Kevin is 50 of the staff member’s income to a maximum of five thousand dollars per worker 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 changed the rules in.
2021 versus since the mayhem 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 come up with twenty 6 thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty six thousand dollars per worker that is since that’s a great deal of money it is now there’s a caveat here the PPP money 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 on average Kevin is if you took PPP cash someplace around 10 thousand dollars a person so let’s say hypothetically you owned a dining establishment in New York City where I’m from and you had a hundred workers and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s substantial obviously now the huge question is why does no one know about this because appearance when I initially became aware of this when I initially met Josh you understand I have actually got lots of investments in lots of companies I’m a significant advocate for entrepreneurship in America and make numerous many financial investments in entrepreneurs of which numerous suffered through the pandemic when I first became aware of this I called BS I don’t believe it because I utilize 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 and that were well deserved and we utilized them carefully to stay alive during 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 friends Governor Senators they didn’t understand about it I indicate that’s how you understand that’s how false information is that there’s no details out there then a bunch of individuals told me well you can’t get it since you took the PPP also not true so let’s ask Josh why does nobody know about the worker retention credit you know what’s fascinating you’re discussing 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 nation 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 mayhem due to the fact that remember in the initial cares act you could refrain from doing both programs so if you had actually done PPP you could refrain from doing ERC in the initial program and when they changed the law in 2021 the banks were refraining from doing ERC since it’s not alone so you’re getting a tax refund so the government never ever made it clear to any person about how to.
do this does your CFO understand how to do this not really she or he’s never done it before do the banks do it nope the banks do not do it the payroll business yeah some of them are doing it as a payroll company your accounting professional no your accountant’s never done this before unless you have an account that entered into this company and bottom line my company Kevin has been in business considering that 2009 and we have actually been working with the federal government and the state government to recover money for Fortune 500 Fortune 1000 business so a great deal of our huge huge business clients have dealt with bottom line to recover other federal government programs we have actually done sales tax and utilize tax unemployment tax work opportunity tax credits research and development tax credits unclaimed property property tax all of these other government programs.
The staff member retention tax credit is a broad based refundable tax credit created to motivate.
companies to keep workers on their payroll. The credit is 50% of approximately $10,000 in wages paid by an.
Since of COVID-19 or whose gross receipts, employer whose company is fully or partly 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 city governments and their instrumentalities and (2) little.
organizations who take Small company Loans.
2. To certify, the company needs to satisfy one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s service is completely or partly suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross receipts are below 50% of the equivalent quarter in 2019. Once the.
employer’s gross invoices exceed 80% of an equivalent quarter in 2019 they no longer certify.
after completion of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the certifying salaries paid up to $10,000 in total.
It is effective for wages paid after March 13th and prior to December 31, 2020.
The definition of qualifying incomes varies by whether a company had, on average, more or less than.
100 staff members in 2019.
Business that focus on ERC filing assistance usually supply knowledge and support to help businesses navigate the complicated procedure of claiming the credit. They can use various services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit 941
Eligibility Evaluation: These companies will evaluate your company’s eligibility for the ERC based on aspects such as your industry, revenue, and operations. They can assist determine if you meet the requirements for the credit and recognize the maximum credit quantity you can claim.
Documents and Computation: ERC filing services will assist in gathering the needed documentation, such as payroll records and financial statements, to support your claim. They will likewise assist calculate the credit quantity based upon eligible earnings and other certifying costs.
Retroactive Claim Evaluation: If you are eligible to declare the ERC for previous quarters, these companies can evaluate your past payroll records and financials to determine possible chances for retroactive credits. They can assist you modify previous income tax return to claim these refunds.
Filing Help: Business focusing on ERC filings will prepare and send the needed kinds and paperwork on your behalf. This includes completing Form 941 or any other required tax forms.
Compliance and Updates: ERC guidelines and assistance have progressed in time. These business remain upgraded with the latest modifications and make sure that your filings adhere to the most present standards. They can likewise provide continuous assistance if the internal revenue service demands extra details or conducts an audit related to your ERC claim.
It is essential to research and veterinarian any company using ERC filing help to guarantee their credibility and competence. Search for recognized firms with experience in tax and payroll services, or consider connecting to relied on accounting firms or tax specialists who use ERC filing support.
Remember that while these business can provide valuable support, it’s always a great idea to have a fundamental understanding of the ERC requirements and process yourself. This will assist you make informed choices 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 encourage services to keep and pay their staff members throughout the pandemic, even if their operations have been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is readily available to eligible companies, including for-profit companies, tax-exempt companies, and certain governmental entities. To certify, employers must meet one of two requirements:.
The business operations were fully or partly suspended due to a government order related to COVID-19.
Business experienced a significant decrease in gross receipts. As mentioned earlier, for 2021, a substantial decrease is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019. For 2022 and beyond, a considerable decrease is defined as a 20% decline 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 amounts to a portion (approximately 70%) of certified wages paid to workers, including specific health insurance costs. 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, businesses that got a Paycheck Protection Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 enables businesses to declare the ERC even if they received a PPP loan. The same earnings can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and improved, permitting qualified companies to declare the credit for certified incomes paid as far back as March 13, 2020. This retroactive arrangement supplies an opportunity for companies to change prior-year income tax return and receive refunds.
Declaring the Credit: Employers can claim the ERC by reporting it on their work tax returns, typically Type 941. The excess can be refunded to the employer if the credit goes beyond the quantity of employment taxes owed.
It is essential to keep in mind that the ERC arrangements and eligibility criteria have evolved gradually. The best course of action is to consult with a tax professional or visit the main IRS website for the most up-to-date and detailed details regarding the ERC, consisting of any recent legislative modifications or updates.
To qualify for the ERC, a business must satisfy one of the following criteria:.
Business operations were completely or partly suspended due to a government order related to COVID-19.
Business experienced a considerable decrease in gross receipts. For 2021, a substantial decline is specified as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a considerable decline 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 instantly preceding quarter.
The ERC is available to services of all sizes, including tax-exempt companies, however there are some exceptions. For instance, federal government entities and organizations that got a PPP loan might have restrictions on claiming the credit.
The process for claiming the ERC involves finishing the necessary types and including the credit on your work tax return (normally Type 941). The exact time it requires to process the credit can vary based upon several aspects, including the complexity of your organization and the work of the internal revenue service. It’s recommended to talk to a tax expert for guidance particular to your circumstance.
There are numerous companies that can assist with the process of declaring the ERC. These include accounting firms, tax advisory services, and payroll company. Some widely known companies that provide assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research study and call these business directly to ask about their fees and services.
Please keep in mind that the details offered here is based on general knowledge and might not show the most current updates or changes to the ERC. It is essential to talk to a tax expert or check out the official IRS website for the most accurate and current information concerning eligibility, declaring treatments, and readily available support.
Less than 100. The credit is based if the company had 100 or fewer staff members on average in 2019.
on wages paid to all workers whether they really worked or not. Simply put, even if the.
staff members worked full time and made money for full time work, the employer still gets the credit.
Greater than 100. The credit is if the employer had more than 100 staff members on average in 2019.
enabled just for earnings paid to workers who did not work during the calendar quarter.
In both cases, “wages” consists of not just cash payments but also a part of the cost of company.
offered healthcare. Employee Retention Credit 941
Companies can be immediately compensated for the credit by minimizing the amount of payroll taxes they.