Lets talk first about Form 941X For Employee Retention Credit :
Our group here what do these people doing everybody in this space is assisting teach people about ERC and uh constantly offer a gorgeous breakfast and have people really learn about the program we should head to the room where we have the ability to display a few of the checks that we are getting for business and I want to see that what is this this is uh numerous millions of dollars literally Kevin numerous millions of dollars so these are replicate copies of the letters that go to clients verifying that the check is on the method I imply you understand if you just begin to 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 indicate it’s just I mean think about how many 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 confirmed and the check is on the mail in the mail from the internal revenue service heading to the consumer so that’s how you have the ability to track it you know when you
get this you understand the check is opted for sure which’s when they pay so they don’t pay anything up until they actually get the cash they don’t pay bottom line Wonder trust anything up until this letter is confirmed the check is on the way they transfer it into their bank account and they can genuinely trust Wonder trust that the process has been completed and how many you believe you’ve processed because you started this we have to do with 35 000 of these for
about 6 billion dollars wow so clearly they know what they’re doing and that’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 Wonderful here you’re at my YouTube channel we’re talking about something truly crucial today the worker retention credit which the majority of you have never ever become aware of I certainly hadn’t become aware of it until really 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 company anywhere
anytime if you have staff members in between five and five hundred so I have actually got the specialist with me this is Josh Fox he’s the creator 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 phone your bank supervisor and say provide 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 become yes the Ambassador and paid spokesperson for this I love this program it’s disappearing very soon you got to find out all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just start 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 practically everybody it makes a big distinction right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
correct the cash cash payroll tax refund alright go on sorry I just need to ensure we got that point I suggest that’s a huge difference a loan versus cash money I like cash money that’s what we’re discussing 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 gorgeous tough check in the mail where you get real cash from the internal revenue service all right so let’s speak about how it works since it seems like to me if it’s a if it’s worker retention credit that person needed to be a worker so I’m going to make the Assumption this money is not for the owner not for people on the cap table not for investors it’s for employees right you needed to have actually owned a business however it’s based on 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 eligible 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 six quarters the program was open well stroll us through the 6 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 determined you have to be on the W-2 during 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 calculation in 2020 to be specific Kevin is 50 of the staff member’s wage to an optimum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers escalated to 70 of the staff member’s wage to an optimum of 7 thousand per quarter how did that occur um they simply altered the rules in.
2021 versus due to the fact that 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 as much as 5 thousand Max and after that 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 staff member that is since that’s a great deal of money it is now there’s a caution here the PPP money would need to be lowered from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would decrease the 26 000 so what we’re seeing usually Kevin is if you took PPP cash somewhere around 10 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 staff members and you took PPP money you would still get a million dollar in the mail from the internal revenue service so it’s big clearly now the huge question is why does nobody understand about this since appearance when I initially found out about this when I initially met Josh you understand I’ve got lots of investments in great deals of companies I’m a significant advocate for entrepreneurship in America and make many many investments in business owners of which lots of suffered through the pandemic when I first heard about this I called BS I don’t think it because I utilize the PPP we went through the money 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 should have and we utilized them sensibly 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 called to my political leader buddies Guv Senators they didn’t learn about it I suggest that’s how you understand that’s how misinformation is that there’s no info 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 nobody learn about the employee retention credit you know what’s interesting you’re speaking about the banks Kevin since in the PPP loan process 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 country and they would process procedure in Canada a pre-pp loan there’s no loans in Canada by the way it’s simply procedure process that’s all um and here there was mayhem due to the fact that remember in the original cares act you could not do 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 not doing ERC since 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 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 accountant no your accountant’s never done this prior to unless you have an account that entered into this company and bottom line my company 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 business so a lot of our big huge business customers have actually worked with bottom line to recuperate other federal government programs we’ve done sales tax and utilize tax unemployment tax work opportunity tax credits research and development tax credits unclaimed home property tax all of these other federal 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 approximately $10,000 in salaries paid by an.
employer whose organization is totally or partially suspended because of COVID-19 or whose gross invoices.
decline by more than 50%.
Accessibility.
1. The credit is offered to all companies regardless of size including tax exempt companies. There are.
just 2 exceptions: (1) state and city governments and their instrumentalities and (2) small.
organizations who take Small company Loans.
2. To qualify, the company has to meet one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s business is completely or partially 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 comparable quarter in 2019. As soon as the.
company’s gross invoices 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 salaries paid up to $10,000 in total.
It is effective for incomes paid after March 13th and before December 31, 2020.
The definition of certifying salaries differs by whether an employer had, usually, more or less than.
100 workers in 2019.
Companies that specialize in ERC filing support usually provide know-how and assistance to help businesses browse the intricate procedure of claiming the credit. They can offer various services, including:.
How is the employee retention credit calculated? Form 941X For Employee Retention Credit
Eligibility Assessment: These companies will assess your company’s eligibility for the ERC based on aspects such as your market, revenue, and operations. If you fulfill the requirements for the credit and identify the optimum credit quantity you can declare, they can help identify.
Documents and Computation: ERC filing services will assist in gathering the necessary documentation, such as payroll records and monetary statements, to support your claim. They will also assist calculate the credit quantity based on eligible salaries and other qualifying expenses.
Retroactive Claim Review: If you are qualified to claim the ERC for previous quarters, these business can evaluate your past payroll records and financials to identify potential opportunities for retroactive credits. They can assist you amend prior income tax return to declare these refunds.
Filing Support: Business focusing on ERC filings will prepare and send the essential forms and documents in your place. This includes completing Kind 941 or any other required tax return.
Compliance and Updates: ERC regulations and guidance have evolved with time. These business remain updated with the current changes and guarantee that your filings adhere to the most present guidelines. If the IRS requests additional info or performs an audit associated to your ERC claim, they can likewise provide continuous assistance.
It is very important to research study and vet any business offering ERC filing assistance to guarantee their credibility and know-how. Look for established companies with experience in tax and payroll services, or think about connecting to relied on accounting companies or tax professionals who use ERC filing support.
Remember that while these business can provide important support, it’s always a great concept to have a fundamental understanding of the ERC requirements and procedure yourself. This will help you make notified choices and make sure precise filings.
The Worker Retention Credit (ERC) is a refundable tax credit introduced by the U.S. government as part of COVID-19 relief steps. The goal of the ERC is to motivate businesses to maintain and pay their workers throughout the pandemic, even if their operations have actually been affected.
Here are some bottom lines about the ERC:.
Eligibility: The ERC is available to eligible companies, consisting of for-profit organizations, tax-exempt organizations, and certain governmental entities. To certify, companies should meet one of two criteria:.
The business operations were fully or partially suspended due to a federal government order related to COVID-19.
Business experienced a substantial decline in gross invoices. As discussed previously, for 2021, a substantial decrease is defined as a 20% decline in gross receipts compared to the exact 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 immediately preceding quarter.
Credit Amount: 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 certified salaries paid to employees, consisting of specific health plan expenditures. The maximum credit per employee is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: At first, organizations that received an Income Security Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 permits companies to declare the ERC even if they got a PPP loan. Nevertheless, the exact same wages can not be utilized to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively expanded and enhanced, permitting qualified companies to claim the credit for qualified incomes paid as far back as March 13, 2020. This retroactive provision supplies a chance for services to amend prior-year tax returns and get refunds.
Claiming the Credit: Companies can declare the ERC by reporting it on their employment income tax return, generally Kind 941. If the credit surpasses the quantity of employment taxes owed, the excess can be reimbursed to the company.
It is very important to keep in mind that the ERC provisions and eligibility requirements have actually evolved gradually. The best strategy is to consult with a tax expert or go to the main internal revenue service site for the most comprehensive and up-to-date info regarding the ERC, including any recent legal modifications or updates.
To get approved for the ERC, an organization should fulfill one of the following requirements:.
The business operations were totally or partly suspended due to a government order related to COVID-19.
The business experienced a significant decline in gross receipts. For 2021, a considerable decline is specified as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a significant decline is defined 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.
The ERC is offered to companies of all sizes, including tax-exempt companies, but there are some exceptions. For example, federal government entities and services that received a PPP loan may have limitations on claiming the credit.
The process for declaring the ERC includes finishing the required kinds and consisting of the credit on your work income tax return (typically Form 941). The exact time it requires to process the credit can vary based upon several aspects, including the intricacy of your service and the workload of the IRS. It’s recommended to speak with a tax expert for assistance particular to your situation.
There are several business that can help with the procedure of claiming the ERC. Some popular companies that provide support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the details provided here is based upon basic understanding and might not show the most recent updates or modifications to the ERC. It’s important to talk to a tax expert or check out the main IRS website for the most up-to-date and precise details regarding eligibility, declaring treatments, and offered help.
Less than 100. If the employer had 100 or less workers typically in 2019, then the credit is based.
on incomes paid to all employees whether they really worked or not. Simply put, even if the.
staff members worked full-time and got paid for full-time work, the employer still gets the credit.
Greater than 100. If the company had more than 100 staff members on average in 2019, then the credit is.
permitted just for salaries paid to staff members who did not work during the calendar quarter.
In both cases, “salaries” consists of not simply cash payments however likewise a part of the cost of employer.
supplied health care. Form 941X For Employee Retention Credit
Payment.
Employers can be instantly repaid for the credit by lowering the amount of payroll taxes they.