Lets talk first about Employee Retention Credit Deadline To Amend 941 :
Our team here what do these men doing everyone in this room is assisting teach people about ERC and uh constantly offer a beautiful breakfast and have individuals actually discover the program we must head to the space where we are able to display some of the checks that we are getting for business and I ‘d like to see that what is this this is uh hundreds of countless dollars literally Kevin numerous countless dollars so these are replicate copies of the letters that go to clients validating that the check is on the way I indicate you know if you simply start to take a look at some of these here I mean this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I indicate it’s just I suggest think of 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 confirmed the numbers are confirmed 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 know when you
get this you know the check is opted for sure which’s when they pay so they do not pay anything till they really get the cash they don’t pay bottom line Wonder trust anything up until this letter is verified the check is on the way they deposit it into their bank account and they can really trust Wonder trust that the process has actually been completed and the number of you believe you’ve processed given that you began this we have to do with 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 one of these that’s what matters all right Mr Wonderful here you’re at my YouTube channel we’re talking about something actually important today the employee retention credit which the majority of you have actually never ever heard of I definitely hadn’t become aware of it till really just recently and found out a lot about it due to the fact that this is probably the lowest expense of capital for any small business anywhere
anytime if you have staff members 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 Ideas they’re the biggest processor of these ERC credits this is a 170 page program so it’s difficult this isn’t like PPP we simply call up your bank manager and state provide 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 have actually become yes the Ambassador and paid spokesperson for this I like this program it’s going away very soon you got to learn 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 created the cares Act and the cares act provided companies 3 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 difference right there 2 of them are loans and one’s a refund exactly so the ERC is a refund that’s.
fix the cash money payroll tax refund okay go on sorry I just have to make sure we got that point I mean that’s a big distinction a loan versus cash cash I like money money that’s what we’re speaking 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 stunning difficult check in the mail where you get real money from the IRS 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 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 shareholders it’s for staff members right you needed to have actually owned a service however it’s based on you having W-2 employees in America not 10.99. so as long as you had W-2 staff members and you paid federal payroll taxes that’s why you would be qualified so you need 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 six quarters the program was open well walk us through the six quarters so you had quarters 2 three and 4 of 2020 and you had quarters one 2 and three of 2021. fine so that’s how it’s measured you need to be on the W-2 during that period now let’s talk my preferred part cash how much can you get back per employee that was on a W-2 in those 6 quarters so the estimation in 2020 to be specific Kevin is 50 of the staff member’s salary to an optimum of 5 thousand dollars per worker for the year of 2020 and in 2021 the numbers escalated to 70 of the staff member’s salary to an optimum of seven thousand per quarter how did that take place um they just altered the rules in.
2021 versus because the mayhem of the pandemic so they wanted 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 approximately 5 thousand Max and then what takes place 21 000 Max in 2021 oh that’s how you come up with twenty six thousand twenty one thousand to twenty twenty one plus five thousand in twenty twenty that’s twenty 6 thousand dollars per worker 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 reduced from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would minimize the 26 000 so what we’re seeing typically 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 staff members 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 question is why does no one learn about this since look when I initially became aware of this when I first fulfilled Josh you know 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 numerous lots of financial investments in business owners of which lots of suffered through the pandemic when I first 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 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 wisely to stay alive during the pandemic so when I found out about this I stated nah it can’t be true however when I dug around I even contacted us to my politician pals Governor Senators they didn’t understand about it I mean that’s how you understand that’s how misinformation is that there’s no details out there then a bunch of individuals told me well you can’t get it because you took the PPP likewise not real so let’s ask Josh why does no one learn about the worker retention credit you know what’s interesting you’re talking about the banks Kevin since in the PPP loan process the federal government made it extremely 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 procedure that’s all um and here there was chaos since remember in the initial cares act you could not do both programs so if you had done PPP you could refrain from doing ERC in the original program and when they altered the law in 2021 the banks were refraining from doing ERC because it’s not alone so you’re getting a tax refund so the federal government never made it clear to anyone about how to.
do this does your CFO know how to do this not really he or she’s never done it in the past do the banks do it nope the banks do not do it the payroll companies yeah some of them are doing it as a payroll company your accounting professional no your accountant’s never ever done this before unless you have an account that entered into this business and bottom line my firm Kevin has actually 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 companies so a lot of our big big business customers have actually dealt with bottom line to recuperate other federal government programs we have actually done sales tax and use tax unemployment tax work opportunity 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.
companies to keep workers on their payroll. The credit is 50% of approximately $10,000 in earnings paid by an.
company whose company is completely or partially suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is offered to all employers no matter size including tax exempt companies. There are.
just two exceptions: (1) state and local governments and their instrumentalities and (2) little.
services who take Small Business Loans.
2. To qualify, the company needs to satisfy one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s company is fully or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are below 50% of the similar quarter in 2019. Once the.
company’s gross receipts go above 80% of an equivalent quarter in 2019 they no longer qualify.
after the end of that quarter.
Estimation of the Credit.
The amount of the credit is 50% of the certifying wages paid up to $10,000 in total.
It works for salaries paid after March 13th and prior to December 31, 2020.
The definition of certifying salaries differs by whether a company had, usually, more or less than.
100 workers in 2019.
Business that focus on ERC filing assistance generally supply knowledge and support to assist companies browse the complex process of declaring the credit. They can use various services, consisting of:.
How is the employee retention credit calculated? Employee Retention Credit Deadline To Amend 941
Eligibility Assessment: These business will evaluate your service’s eligibility for the ERC based upon aspects such as your market, income, and operations. If you fulfill the requirements for the credit and determine the optimum credit amount you can declare, they can help determine.
Documentation and Estimation: ERC filing services will assist in collecting the required paperwork, such as payroll records and monetary statements, to support your claim. They will also assist calculate the credit amount based on qualified earnings and other certifying expenses.
Retroactive Claim Review: If you are qualified to declare the ERC for prior quarters, these business can examine your past payroll records and financials to determine prospective opportunities for retroactive credits. They can help you change previous tax returns to declare these refunds.
Filing Help: Business focusing on ERC filings will prepare and send the required types and paperwork on your behalf. This includes completing Kind 941 or any other required tax return.
Compliance and Updates: ERC regulations and guidance have actually developed over time. These companies stay updated with the most recent modifications and make sure that your filings abide by the most existing guidelines. They can likewise offer ongoing assistance if the IRS requests extra info or conducts an audit related to your ERC claim.
It is necessary to research study and vet any company offering ERC filing help to guarantee their trustworthiness and knowledge. Search for recognized firms with experience in tax and payroll services, or consider connecting to relied on accounting firms or tax experts who provide ERC filing support.
Remember that while these companies can offer valuable support, it’s always an excellent idea to have a standard understanding of the ERC requirements and process yourself. This will assist you make informed decisions and guarantee accurate filings.
The Worker Retention Credit (ERC) is a refundable tax credit presented by the U.S. federal government as part of COVID-19 relief steps. The objective of the ERC is to encourage companies to maintain and pay their workers throughout the pandemic, even if their operations have been impacted.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is offered to eligible employers, including for-profit businesses, tax-exempt companies, and particular governmental entities. To certify, companies need to meet one of two requirements:.
The business operations were totally or partially suspended due to a federal government order related to COVID-19.
Business experienced a significant decrease in gross invoices. As mentioned previously, for 2021, a considerable decline 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 receipts compared to the exact same quarter in 2019, or a 20% decrease in gross invoices compared to the immediately preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the company’s share of Social Security taxes. The credit quantity is equal to a percentage (approximately 70%) of qualified incomes paid to staff members, including certain health plan 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: At first, services that received an Income Protection 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 got a PPP loan. The same salaries can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively expanded and boosted, permitting qualified employers to claim the credit for qualified salaries paid as far back as March 13, 2020. This retroactive arrangement offers an opportunity for services to modify prior-year income tax return and receive refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their work tax returns, normally Kind 941. The excess can be reimbursed to the employer if the credit exceeds the quantity of work taxes owed.
It is essential to keep in mind that the ERC provisions and eligibility criteria have developed over time. The best course of action is to seek advice from a tax professional or visit the main internal revenue service site for the most comprehensive and updated details regarding the ERC, consisting of any recent legal modifications or updates.
To receive the ERC, an organization must meet one of the following criteria:.
Business operations were completely or partially suspended due to a government order related to COVID-19.
Business experienced a considerable decrease in gross receipts. For 2021, a significant decline is specified as a 20% decline in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a considerable decline is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019, or a 20% decrease in gross receipts compared to the immediately preceding quarter.
The ERC is offered to companies of all sizes, including tax-exempt organizations, however there are some exceptions. Government entities and services that got a PPP loan might have restrictions on claiming the credit.
The process for declaring the ERC includes completing the required kinds and consisting of the credit on your employment tax return (typically Type 941). The exact time it takes to process the credit can differ based upon numerous factors, consisting of the intricacy of your company and the workload of the IRS. It’s advised to talk to a tax professional for assistance specific to your scenario.
There are a number of business that can help with the process of declaring the ERC. These include accounting companies, tax advisory services, and payroll provider. Some popular business that use support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research study and get in touch with these companies directly to inquire about their services and charges.
Please keep in mind that the info provided here is based upon basic understanding and might not show the most current updates or modifications to the ERC. It is necessary to talk to a tax expert or go to the official IRS site for the most updated and precise information concerning eligibility, declaring treatments, and offered support.
Less than 100. The credit is based if the employer had 100 or less employees on average in 2019.
on wages paid to all staff members whether they actually worked or not. Simply put, even if the.
workers worked full-time and made money for full time work, the employer still gets the credit.
Greater than 100. If the employer had more than 100 employees usually in 2019, then the credit is.
allowed only for incomes paid to employees who did not work during the calendar quarter.
In both cases, “salaries” consists of not simply money payments however also a part of the cost of employer.
supplied health care. Employee Retention Credit Deadline To Amend 941
Employers can be right away compensated for the credit by lowering the quantity of payroll taxes they.