Lets talk first about Form 941-x Employee Retention Credit :
Our group here what do these men doing everybody in this space is helping teach people about ERC and uh constantly provide a stunning breakfast and have people actually learn about the program we ought to head to the room where we have the ability to show some of the checks that we are getting for business and I want to see that what is this this is uh hundreds of countless dollars literally Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to clients confirming that the check is on the way I imply you know if you just begin to take a look at a few of these here I mean this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I imply it’s just I indicate think about the number of actual clients that went through the program yeah this is the very end this is the celebration at the end when the check is verified the numbers are verified and the check is on the mail in the mail from the IRS heading to the customer so that’s how you have the ability to track it you understand when you
get this you understand the check is chosen sure and that’s when they pay so they do not pay anything till they really receive the cash they do not pay bottom line Wonder trust anything until this letter is confirmed the check is on the way they deposit it into their checking account and they can truly rely on Wonder trust that the procedure has actually been finished and the number of you believe you’ve processed considering that you started this we’re about 35 000 of these for
about 6 billion dollars wow so plainly they understand what they’re doing and that’s what you require you require 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 speaking about something really important today the staff member retention credit which the majority of you have actually never become aware of I certainly hadn’t heard of it until extremely recently and learned a lot about it due to the fact that this is probably the most affordable cost of capital for any small company anywhere
anytime if you have workers between five and five hundred so I’ve got the professional with me this is Josh Fox he’s the founder and CEO of bottom line Concepts they’re the largest processor of these ERC credits this is a 170 page program so it’s challenging this isn’t like PPP we just call up your bank supervisor and state give 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’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 discover everything about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just begin there so during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act provided organizations 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 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 have to make sure we got that point I indicate that’s a huge distinction a loan versus cash cash I like money cash 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 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 internal revenue service all right so let’s discuss how it works since it sounds like to me if it’s a if it’s worker retention credit that individual had to be a worker 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 employees right you needed to have 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 eligible so you need to be on payroll in 2020 on the W-2 and you need to be on payroll for the first six months of 2021 on the W-2 appropriate so there were six quarters the program was open well walk us through the 6 quarters so you had quarters two three and 4 of 2020 and you had quarters one 2 and three of 2021. alright so that’s how it’s measured you have to be on the W-2 throughout that period now let’s talk my preferred part cash just how much can you return per worker 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 income to an optimum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the staff member’s income to an optimum of seven thousand per quarter how did that happen um they just changed the rules in.
2021 versus due to the fact that 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 approximately five thousand Max and after that what occurs 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 employee that is because that’s a lot of cash it is now there’s a caveat here the PPP money would have to be reduced from the twenty six thousand dollars so if you took PPP loan one and PPP loan two you would reduce the 26 000 so what we’re seeing usually Kevin is if you took PPP cash somewhere around 10 thousand dollars a person so let’s say hypothetically you owned a dining establishment in New york city City where I’m from and you had a hundred staff members and you took PPP cash you would still get a million dollar in the mail from the internal revenue service so it’s big clearly now the huge concern is why does nobody understand about this due to the fact that look when I first heard about this when I first fulfilled Josh you understand I’ve got great deals of financial investments in great deals of business I’m a significant supporter for entrepreneurship in America and make lots of numerous financial investments in business owners of which lots of suffered through the pandemic when I initially found out about this I called BS I don’t think 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 been worthy of and we used them carefully to survive throughout the pandemic so when I found out about this I said nah it can’t hold true but when I dug around I even called to my politician friends Guv Senators they didn’t know about it I imply that’s how you know that’s how false information is that there’s no info out there then a lot of individuals informed me well you can’t get it because you took the PPP also not true so let’s ask Josh why does no one understand about the staff member retention credit you know what’s interesting you’re talking about the banks Kevin because in the PPP loan procedure the federal government made it really clear that if you wanted a PPP loan you would call Wells Fargo Citibank Bank of America any of the big 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 procedure that’s all um and here there was mayhem because remember in the initial cares act you could not do both programs so if you had done PPP you might not do ERC in the initial program and when they altered 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 made it clear to any person about how to.
do this does your CFO understand how to do this not actually he or she’s never ever done it before do the banks do it nope the banks do not do it the payroll companies yeah a few of them are doing it as a payroll business your accounting professional no your accountant’s never done this prior to unless you have an account that went into this service and bottom line my firm Kevin has actually stayed in business because 2009 and we’ve been working with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 companies so a lot of our huge huge business clients have dealt with bottom line to recover other federal government programs we have actually done sales tax and use tax joblessness 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 created to motivate.
employers to keep employees on their payroll. The credit is 50% of up to $10,000 in wages paid by an.
employer whose business is fully or partly suspended because of COVID-19 or whose gross invoices.
decrease by more than 50%.
1. The credit is readily available to all companies regardless of size consisting of tax exempt organizations. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) little.
companies who take Small Business Loans.
2. To certify, the company has to satisfy one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s business 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 listed below 50% of the equivalent quarter in 2019. Once the.
employer’s gross invoices go above 80% of a similar quarter in 2019 they no longer certify.
after completion of that quarter.
Calculation of the Credit.
The amount of the credit is 50% of the qualifying salaries paid up to $10,000 in total.
It is effective for wages paid after March 13th and before December 31, 2020.
The meaning of qualifying earnings differs by whether an employer had, on average, more or less than.
100 employees in 2019.
Business that specialize in ERC filing support typically supply knowledge and support to assist organizations navigate the complex procedure of declaring the credit. They can offer various services, consisting of:.
How is the employee retention credit calculated? Form 941-x Employee Retention Credit
Eligibility Assessment: These companies will examine your business’s eligibility for the ERC based on factors such as your industry, profits, and operations. They can assist determine if you satisfy the requirements for the credit and identify the optimum credit amount you can declare.
Documentation and Calculation: ERC filing services will help in gathering the required paperwork, such as payroll records and monetary declarations, to support your claim. They will also help compute the credit quantity based on qualified incomes and other certifying expenses.
Retroactive Claim Review: If you are eligible to declare the ERC for prior quarters, these companies can review your previous payroll records and financials to identify potential opportunities for retroactive credits. They can help you change previous tax returns to claim these refunds.
Filing Support: Companies specializing in ERC filings will prepare and submit the necessary types and documentation in your place. This consists of finishing Kind 941 or any other necessary tax forms.
Compliance and Updates: ERC guidelines and assistance have actually developed gradually. These business remain updated with the most recent modifications and make sure that your filings adhere to the most present standards. If the Internal revenue service demands additional info or performs an audit related to your ERC claim, they can also provide continuous support.
It is necessary to research study and veterinarian any company offering ERC filing support to guarantee their credibility and knowledge. Look for established companies with experience in tax and payroll services, or think about connecting to trusted accounting companies or tax specialists who provide ERC filing assistance.
Remember that while these companies can offer important help, it’s constantly a great idea to have a standard understanding of the ERC requirements and process yourself. This will help you make notified choices and guarantee accurate filings.
The Employee 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 services to maintain and pay their staff members 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, consisting of for-profit businesses, tax-exempt organizations, and specific governmental entities. To certify, companies must fulfill one of two requirements:.
The business operations were totally or partially suspended due to a federal government order related to COVID-19.
The business experienced a substantial decline in gross invoices. As discussed earlier, for 2021, a considerable decline is specified as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a substantial decrease is specified as a 20% decline in gross invoices compared to the exact same quarter in 2019, or a 20% decrease in gross invoices compared to the right away preceding quarter.
Credit Quantity: 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 certified wages paid to staff members, consisting of particular health insurance costs. The optimum credit per staff member is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, services that received a Paycheck Protection Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 enables companies to claim the ERC even if they received a PPP loan. However, the same incomes can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively broadened and enhanced, permitting eligible employers to claim the credit for certified wages paid as far back as March 13, 2020. This retroactive arrangement supplies an opportunity for services to modify prior-year tax returns and get refunds.
Claiming the Credit: Employers can claim the ERC by reporting it on their work tax returns, usually Form 941. The excess can be reimbursed to the company if the credit exceeds the quantity of employment taxes owed.
It is essential to keep in mind that the ERC arrangements and eligibility criteria have actually developed gradually. The very best strategy is to consult with a tax professional or go to the main internal revenue service site for the most up-to-date and in-depth information regarding the ERC, including any recent legal changes or updates.
To qualify for the ERC, an organization needs to meet among the following criteria:.
The business operations were fully or partially suspended due to a federal government order related to COVID-19.
Business experienced a considerable decrease in gross receipts. For 2021, a significant decline is specified as a 20% decrease in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decline is defined as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decrease in gross receipts compared to the instantly preceding quarter.
The ERC is readily available to businesses of all sizes, consisting of tax-exempt companies, however there are some exceptions. For example, federal government entities and services that got a PPP loan might have limitations on declaring the credit.
The process for declaring the ERC includes finishing the required kinds and consisting of the credit on your employment tax return (typically Type 941). The exact time it requires to process the credit can vary based upon several factors, consisting of the complexity of your service and the workload of the IRS. It’s advised to speak with a tax expert for assistance particular to your circumstance.
There are numerous companies that can assist with the procedure of claiming the ERC. These include accounting firms, tax advisory services, and payroll service providers. Some widely known companies that offer help with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research study and get in touch with these business directly to ask about their charges and services.
Please keep in mind that the details supplied here is based on basic knowledge and may not show the most current updates or changes to the ERC. It is essential to speak with a tax professional or go to the official internal revenue service site for the most current and accurate info relating to eligibility, declaring procedures, and offered support.
Less than 100. The credit is based if the employer had 100 or fewer employees on average in 2019.
on incomes paid to all staff members whether they actually worked or not. Simply put, even if the.
staff members worked full-time and made money for full time work, the company still gets the credit.
Greater than 100. If the company had more than 100 workers usually in 2019, then the credit is.
permitted only for salaries paid to workers who did not work throughout the calendar quarter.
In both cases, “earnings” includes not just cash payments however also a portion of the cost of company.
provided healthcare. Form 941-x Employee Retention Credit
Companies can be immediately reimbursed for the credit by decreasing the quantity of payroll taxes they.