Lets talk first about 941 X 2020 Employee Retention Credit :
Our team here what do these people doing everybody in this room is helping teach individuals about ERC and uh always offer a stunning breakfast and have individuals really learn more about the program we need to head to the room where we are able to show a few 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 actually Kevin numerous countless 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 take a 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 indicate it’s simply I imply consider the number of real 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 understand when you
get this you know the check is gone for sure which’s when they pay so they don’t pay anything till they in fact get the cash they don’t pay bottom line Wonder trust anything till this letter is verified the check is on the way they transfer it into their checking account and they can genuinely trust Wonder trust that the process has actually been ended up and the number of you believe you have actually processed considering that you began this we’re about 35 000 of these for
about 6 billion dollars wow so plainly they know what they’re doing which’s what you require you require experts 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 Terrific here you’re at my YouTube channel we’re discussing something really crucial today the worker retention credit which the majority of you have actually never become aware of I certainly had not become aware of it till very just recently and discovered a lot about it due to the fact that this is most likely the most affordable cost of capital for any small business anywhere
anytime if you have workers 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 Ideas they’re the largest processor of these ERC credits this is a 170 page program so it’s hard this isn’t like PPP we simply phone your bank supervisor and state provide 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 have actually become yes the Ambassador and paid representative for this I love this program it’s disappearing 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 during the Trump Administration when President Trump was enacted they developed the cares Act and the cares act offered businesses 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody it makes a huge distinction right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the money cash payroll tax refund alright go on sorry I just need to make certain we got that point I imply that’s a huge distinction a loan versus money 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 original cares Act is the ERC and yes Kevin it is a beautiful hard check in the mail where you get actual money from the IRS all right so let’s talk about how it works due to the fact that it seems like to me if it’s a if it’s worker retention credit that individual needed to be an employee so I’m going to make the Assumption this cash is not for the owner not for individuals on the cap table not for shareholders it’s for workers right you needed to have actually owned an organization however it’s based on you having W-2 workers 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 6 months of 2021 on the W-2 proper so there were 6 quarters the program was open well walk us through the 6 quarters so you had quarters two 3 and 4 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 return per worker that was on a W-2 in those 6 quarters so the estimation in 2020 to be specific Kevin is 50 of the worker’s income to a maximum of 5 thousand dollars per employee for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the employee’s wage to a maximum of 7 thousand per quarter how did that take place um they simply changed the rules in.
2021 versus since the turmoil of the pandemic so they wanted 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 up to five 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 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 cash would need to be lowered from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would reduce the 26 000 so what we’re seeing usually Kevin is if you took PPP money 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 cash you would still get a million dollar in the mail from the IRS so it’s big obviously now the huge question is why does nobody learn about this due to the fact that look when I initially found out about this when I first fulfilled Josh you know I have actually got great deals of financial investments in lots of business I’m a major advocate for entrepreneurship in America and make many many financial investments in business owners of which numerous suffered through the pandemic when I initially heard about this I called BS I do not believe it due to the fact that I use the PPP we went through the money center Banks to get it it was extremely easy to do we had our CEOs call the banks they got their loans which were well deserved and we used them carefully to stay alive throughout the pandemic so when I heard about this I stated nah it can’t be true however when I dug around I even contacted us to my politician pals Guv Senators they didn’t learn about it I suggest that’s how you know that’s how misinformation is that there’s no information out there then a lot of people informed me well you can’t get it due to the fact that you took the PPP likewise not real so let’s ask Josh why does no one know about the employee retention credit you know what’s intriguing you’re discussing the banks Kevin because in the PPP loan process the federal government made it really clear that if you desired a PPP loan you would call Wells Fargo Citibank Bank of America any of the huge 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 chaos since remember in the original cares act you could refrain from doing both programs so if you had done PPP you could not do 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 government never ever made it clear to anybody 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 company your accounting professional no your accountant’s never ever done this prior to unless you have an account that went into this company and bottom line my firm Kevin has actually stayed in business considering that 2009 and we have actually been dealing with the federal government and the state federal government to recover money for Fortune 500 Fortune 1000 business so a great deal of our big huge corporate customers have actually worked with bottom line to recuperate other government programs we have actually done sales tax and utilize tax joblessness tax work opportunity tax credits research and development tax credits unclaimed home property tax all of these other government programs.
The staff member retention tax credit is a broad based refundable tax credit developed to motivate.
employers to keep staff members on their payroll. The credit is 50% of approximately $10,000 in wages paid by an.
Due to the fact that of COVID-19 or whose gross receipts, company whose business is completely or partly suspended.
decline by more than 50%.
1. The credit is offered to all employers no matter size including tax exempt organizations. 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 fulfill one of two alternative tests. The tests are calculated each.
calendar quarter– Either.
o the employer’s business is totally or partly suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross invoices are below 50% of the similar quarter in 2019. As soon as the.
company’s gross invoices exceed 80% of a similar 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 incomes paid up to $10,000 in overall.
It works for salaries paid after March 13th and before December 31, 2020.
The meaning of certifying wages differs by whether a company had, typically, basically than.
100 workers in 2019.
Companies that focus on ERC filing help normally offer knowledge and support to assist organizations browse the intricate process of claiming the credit. They can use various services, consisting of:.
How is the employee retention credit calculated? 941 X 2020 Employee Retention Credit
Eligibility Evaluation: These companies will examine your service’s eligibility for the ERC based upon factors such as your market, profits, and operations. If you fulfill the requirements for the credit and identify the optimum credit amount you can claim, they can help determine.
Paperwork and Computation: ERC filing services will assist in gathering the needed paperwork, such as payroll records and financial declarations, to support your claim. They will also help calculate the credit amount based on eligible earnings and other certifying costs.
Retroactive Claim Evaluation: If you are eligible to claim the ERC for previous quarters, these business can examine your previous payroll records and financials to recognize possible chances for retroactive credits. They can help you amend previous income tax return to claim these refunds.
Filing Assistance: Companies concentrating on ERC filings will prepare and submit the necessary forms and documents on your behalf. This consists of finishing Kind 941 or any other necessary tax forms.
Compliance and Updates: ERC policies and guidance have actually evolved over time. These companies remain upgraded with the latest changes and ensure that your filings comply with the most existing guidelines. They can also offer continuous assistance if the internal revenue service requests extra information or conducts an audit related to your ERC claim.
It is necessary to research study and vet any company offering ERC filing support to guarantee their reliability and proficiency. Search for established firms with experience in tax and payroll services, or think about reaching out to relied on accounting firms or tax experts who use ERC filing assistance.
Bear in mind that while these companies can supply valuable support, it’s constantly a great idea to have a basic understanding of the ERC requirements and process yourself. This will assist you make informed decisions and guarantee accurate filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit presented by the U.S. government as part of COVID-19 relief measures. The goal of the ERC is to encourage companies to maintain and pay their staff members throughout the pandemic, even if their operations have actually been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to eligible companies, including for-profit businesses, tax-exempt companies, and specific governmental entities. To qualify, companies should satisfy one of two requirements:.
Business operations were completely or partially suspended due to a federal government order related to COVID-19.
Business experienced a considerable decrease in gross invoices. As mentioned previously, for 2021, a considerable decline is defined as a 20% decline in gross invoices compared to the exact same quarter in 2019. For 2022 and beyond, a significant decrease is defined as a 20% decrease in gross invoices compared to the exact same quarter in 2019, or a 20% decline in gross receipts compared to the instantly preceding quarter.
Credit Quantity: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit quantity is equal to a percentage (up to 70%) of certified wages paid to workers, consisting of certain health insurance expenses. 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, companies that got a Paycheck Protection Program (PPP) loan were not qualified for the ERC. Legislation passed in late 2020 and extended in 2021 allows organizations to claim the ERC even if they got a PPP loan. The same incomes can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and improved, enabling eligible employers to declare the credit for certified salaries paid as far back as March 13, 2020. This retroactive arrangement supplies an opportunity for businesses to change prior-year tax returns and receive refunds.
Claiming the Credit: Companies can claim the ERC by reporting it on their employment income tax return, normally Form 941. The excess can be refunded to the company if the credit goes beyond the quantity of work taxes owed.
It is necessary to keep in mind that the ERC provisions and eligibility requirements have developed over time. The best strategy is to consult with a tax expert or go to the official internal revenue service site for the most up-to-date and in-depth details concerning the ERC, including any recent legal changes or updates.
To receive the ERC, a business should satisfy among the following criteria:.
Business operations were completely or partially suspended due to a government order related to COVID-19.
The business experienced a significant decline in gross invoices. For 2021, a significant decline is specified as a 20% decrease in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a significant decline is specified as a 20% decrease 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 available to businesses of all sizes, including tax-exempt organizations, but there are some exceptions. For instance, federal government entities and businesses that received a PPP loan might have restrictions on claiming the credit.
The procedure for declaring the ERC includes completing the necessary types and consisting of the credit on your work tax return (usually Form 941). The exact time it takes to process the credit can differ based upon several aspects, consisting of the complexity of your organization and the work of the IRS. It’s suggested to speak with a tax professional for assistance particular to your circumstance.
There are numerous business that can help with the process of claiming the ERC. These consist of accounting firms, tax advisory services, and payroll service providers. Some well-known business that offer support with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s a good idea to research and get in touch with these business directly to inquire about their services and fees.
Please keep in mind that the info provided here is based on basic understanding and might not reflect the most recent updates or modifications to the ERC. It is necessary to speak with a tax expert or check out the official IRS site for the most updated and precise details concerning eligibility, claiming treatments, and available support.
Less than 100. The credit is based if the company had 100 or fewer staff members on average in 2019.
on earnings paid to all staff members whether they really worked or not. Simply put, even if the.
workers 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 employees usually in 2019, then the credit is.
enabled only for incomes paid to staff members who did not work during the calendar quarter.
In both cases, “earnings” includes not just cash payments however likewise a part of the expense of employer.
offered health care. 941 X 2020 Employee Retention Credit
Companies can be right away compensated for the credit by reducing the quantity of payroll taxes they.