Lets talk first about File 941X For Employee Retention Credit :
Our team here what do these people doing everybody in this space is helping teach people about ERC and uh constantly offer a gorgeous breakfast and have individuals actually learn about the program we must head to the room where we are able to display some of the checks that we are getting for companies and I want to see that what is this this is uh numerous countless dollars literally Kevin hundreds of millions of dollars so these are duplicate copies of the letters that go to customers verifying that the check is on the way I mean you know if you just start 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 mean it’s just I indicate 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 confirmed and the check is on the mail in the mail from the IRS heading to the client so that’s how you’re able to track it you understand when you
get this you know the check is opted for sure which’s when they pay so they do not pay anything up until they really receive the money they do not pay bottom line Wonder trust anything up until this letter is confirmed the check is on the way they transfer it into their checking account and they can truly rely on Wonder trust that the procedure has been ended up and the number of you think you have actually processed because you began this we’re about 35 000 of these for
about six billion dollars wow so plainly they know what they’re doing which’s what you need you need specialists 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 Fantastic here you’re at my YouTube channel we’re discussing something actually crucial today the worker retention credit which the majority of you have never ever become aware of I definitely had not become aware of it till extremely 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 workers in between 5 and five hundred so I have actually got the professional with me this is Josh Fox he’s the founder and CEO of bottom line Ideas 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 just call up your bank supervisor 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’ve ended up being yes the Ambassador and paid spokesperson for this I enjoy this program it’s going away very soon you got to find out everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s simply start there so throughout the Trump Administration when President Trump was enacted they came up with the cares Act and the cares act offered services three chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and almost everyone it makes a big difference right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the money cash payroll tax refund alright go on sorry I simply need to make certain we got that point I imply that’s a huge distinction a loan versus money money I like money 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 beautiful difficult check in the mail where you get actual cash from the internal revenue service all right so let’s speak about how it works because 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 people on the cap table not for investors it’s for staff members right you had to have owned a company but it’s based on you having W-2 staff members 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 eligible so you have to be on payroll in 2020 on the W-2 and you need to be on payroll for the first 6 months of 2021 on the W-2 correct so there were six quarters the program was open well stroll us through the 6 quarters so you had quarters 2 three and four of 2020 and you had quarters one 2 and 3 of 2021. okay so that’s how it’s measured you need to be on the W-2 during that duration now let’s talk my favorite part cash how much can you get back per employee that was on a W-2 in those six quarters so the computation in 2020 to be specific Kevin is 50 of the staff member’s salary to an optimum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers escalated to 70 of the staff member’s income to a maximum of seven thousand per quarter how did that occur um they just altered the rules in.
2021 versus due to the fact that 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 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 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 6 thousand dollars so if you took PPP loan one and PPP loan two you would lower the 26 000 so what we’re seeing typically Kevin is if you took PPP cash somewhere around 10 thousand dollars a person so let’s state hypothetically you owned a restaurant in New york city City where I’m from and you had a hundred employees and you took PPP money you would still get a million dollar in the mail from the IRS so it’s huge undoubtedly now the huge question is why does no one understand about this due to the fact that appearance when I initially found out about this when I initially met Josh you know I have actually got great deals of financial investments in lots of business I’m a significant advocate for entrepreneurship in America and make many many financial investments in entrepreneurs of which lots of suffered through the pandemic when I initially found out about this I called BS I don’t think it due to the fact that I use the PPP we went through the money center Banks to get it it was very easy to do we had our CEOs call the banks they got their loans and that were well should have and we utilized them carefully to survive 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 buddies Guv 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 people told me well you can’t get it because you took the PPP also not real so let’s ask Josh why does nobody understand about the worker retention credit you know what’s intriguing 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 procedure 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 mayhem because keep in mind in the initial cares act you could refrain from doing both programs so if you had 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 because it’s not alone so you’re getting a tax refund so the government never ever made it clear to anyone about how to.
do this does your CFO know how to do this not truly he or she’s never done it in the past 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 ever done this before unless you have an account that entered into this service and bottom line my company Kevin has actually 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 companies so a lot of our big huge corporate customers have actually dealt with bottom line to recover other government programs we’ve done sales tax and use tax unemployment tax work opportunity tax credits research and development tax credits unclaimed home property tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit created to encourage.
employers to keep staff members on their payroll. The credit is 50% of as much as $10,000 in wages paid by an.
company whose company is totally or partially suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is available to all employers no matter size consisting of tax exempt companies. There are.
only 2 exceptions: (1) state and city governments and their instrumentalities and (2) little.
organizations who take Small Business Loans.
2. To qualify, the employer has to meet one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s company is completely or partially 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.
employer’s gross receipts exceed 80% of an equivalent quarter in 2019 they no longer certify.
after the end of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the qualifying incomes paid up to $10,000 in overall.
It works for incomes paid after March 13th and prior to December 31, 2020.
The definition of qualifying earnings varies by whether a company had, usually, more or less than.
100 employees in 2019.
Business that specialize in ERC filing help usually provide proficiency and assistance to assist organizations browse the complex process of claiming the credit. They can offer different services, consisting of:.
How is the employee retention credit calculated? File 941X For Employee Retention Credit
Eligibility Assessment: These companies will assess your service’s eligibility for the ERC based upon aspects such as your industry, earnings, and operations. If you meet the requirements for the credit and recognize the maximum credit amount you can claim, they can assist identify.
Documents and Calculation: ERC filing services will help in collecting the required documentation, such as payroll records and monetary declarations, to support your claim. They will also assist compute the credit amount based upon eligible salaries and other qualifying expenses.
Retroactive Claim Evaluation: If you are eligible to claim the ERC for previous quarters, these companies can review your past payroll records and financials to determine potential chances for retroactive credits. They can help you change previous income tax return to declare these refunds.
Filing Support: Companies concentrating on ERC filings will prepare and submit the required forms and documents in your place. This consists of finishing Type 941 or any other required tax return.
Compliance and Updates: ERC policies and guidance have developed gradually. These business remain upgraded with the most recent modifications and make sure that your filings abide by the most current standards. If the Internal revenue service requests additional info or carries out an audit associated to your ERC claim, they can also offer continuous assistance.
It is very important to research study and vet any business offering ERC filing support to ensure their trustworthiness and knowledge. Look for established firms with experience in tax and payroll services, or consider reaching out to trusted accounting companies or tax specialists who use ERC submitting support.
Remember that while these companies can offer valuable assistance, it’s constantly a good idea to have a basic understanding of the ERC requirements and procedure yourself. This will help you make informed decisions and ensure 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 steps. The objective of the ERC is to encourage businesses to retain and pay their workers during the pandemic, even if their operations have actually been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is available to qualified companies, including for-profit businesses, tax-exempt organizations, and particular governmental entities. To certify, companies should fulfill one of two requirements:.
The business operations were completely or partially suspended due to a federal government order related to COVID-19.
Business experienced a substantial decrease in gross receipts. As mentioned previously, for 2021, a substantial decline is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decrease in gross invoices compared to the 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 percentage (approximately 70%) of qualified incomes paid to employees, including certain health plan costs. The optimum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, companies that got an Income Defense Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 enables companies to claim the ERC even if they got a PPP loan. The exact same incomes can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively broadened and boosted, permitting eligible employers to claim the credit for qualified incomes paid as far back as March 13, 2020. This retroactive provision provides a chance for organizations to amend prior-year tax returns and get refunds.
Declaring the Credit: Companies can declare the ERC by reporting it on their work tax returns, usually Type 941. If the credit exceeds the quantity of employment taxes owed, the excess can be refunded to the employer.
It is very important to keep in mind that the ERC provisions and eligibility criteria have actually evolved in time. The best strategy is to talk to a tax expert or check out the official internal revenue service website for the most up-to-date and comprehensive details concerning the ERC, consisting of any recent legislative modifications or updates.
To qualify for the ERC, a service needs to meet one of the following criteria:.
The business operations were totally or partly suspended due to a government order related to COVID-19.
Business experienced a significant decrease in gross receipts. For 2021, a substantial decrease 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 same quarter in 2019, or a 20% decline in gross receipts compared to the right away preceding quarter.
The ERC is readily available to businesses of all sizes, consisting of tax-exempt organizations, however there are some exceptions. For example, federal government entities and services that got a PPP loan may have limitations on claiming the credit.
The procedure for declaring the ERC includes completing the needed types and consisting of the credit on your work income tax return (normally Type 941). The exact time it requires to process the credit can differ based on several elements, consisting of the intricacy of your service and the workload of the IRS. It’s suggested to speak with a tax professional for assistance specific to your situation.
There are a number of companies that can help with the process of declaring the ERC. Some well-known companies that offer assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the details supplied here is based on general understanding and may not reflect the most recent updates or changes to the ERC. It is essential to consult with a tax professional or go to the main internal revenue service website for the most up-to-date and accurate information regarding eligibility, declaring treatments, and readily available support.
Less than 100. If the employer had 100 or less workers typically in 2019, then the credit is based.
on incomes paid to all workers whether they really worked or not. In other words, even if the.
workers worked full time and got paid for full time work, the company still gets the credit.
Greater than 100. The credit is if the employer had more than 100 workers on average in 2019.
allowed only for earnings paid to staff members who did not work throughout the calendar quarter.
In both cases, “salaries” consists of not just money payments but also a part of the cost of company.
supplied health care. File 941X For Employee Retention Credit
Companies can be instantly repaid for the credit by minimizing the amount of payroll taxes they.