Lets talk first about Employee Retention Credit 941 Example :
Our group here what do these men doing everybody in this room is helping teach individuals about ERC and uh always provide a beautiful breakfast and have people really find out about the program we need to head to the space where we are able to show a few of the checks that we are getting for business and I wish to see that what is this this is uh hundreds of millions of dollars actually Kevin hundreds of millions of dollars so these are replicate copies of the letters that go to clients validating that the check is on the way I suggest you understand if you simply start to take a look at some of these here I indicate this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I mean it’s simply I mean think of how many real customers that went through the program yeah this is the very end this is the celebration at the end when the check is validated the numbers are verified 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 know the check is chosen sure and that’s when they pay so they do not pay anything till they really receive the money they don’t pay bottom line Wonder trust anything up until this letter is validated the check is on the way they deposit it into their savings account and they can truly trust Wonder trust that the procedure has been finished and the number of you believe you have actually processed since you began this we’re about 35 000 of these for
about 6 billion dollars wow so clearly they know 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 among these that’s what matters all right Mr Fantastic here you’re at my YouTube channel we’re discussing something really crucial today the worker retention credit which the majority of you have never heard of I definitely had not heard of it up until very recently and discovered a lot about it since this is probably the lowest cost of capital for any small business anywhere
anytime if you have staff members between 5 and five hundred so I’ve got the professional with me this is Josh Fox he’s the creator 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 call up your bank manager 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 ended up being yes the Ambassador and paid representative for this I like this program it’s going away soon you got to find out all about it let’s talk employee retention credit Josh Fox what is an ERC let’s simply start there so throughout the Trump Administration when President Trump was enacted they developed the cares Act and the cares act used organizations 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everyone it makes a huge distinction right there two of them are loans and one’s a refund exactly so the ERC is a refund that’s.
remedy the money money payroll tax refund fine go on sorry I simply need to make sure we got that point I indicate that’s a huge difference a loan versus cash 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 initial cares Act is the ERC and yes Kevin it is a gorgeous hard check in the mail where you get actual money 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 staff member retention credit that individual needed to be a worker so I’m going to make the Presumption this cash 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 business but 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 have to be on payroll in 2020 on the W-2 and you have to be on payroll for the first six months of 2021 on the W-2 proper so there were 6 quarters the program was open well stroll us through the 6 quarters so you had quarters two 3 and 4 of 2020 and you had quarters one two and three of 2021. all right so that’s how it’s determined you have to be on the W-2 during that duration now let’s talk my preferred part money just how much can you get back per staff member that was on a W-2 in those six quarters so the calculation in 2020 to be exact Kevin is 50 of the employee’s wage to a maximum of five thousand dollars per staff member for the year of 2020 and in 2021 the numbers escalated to 70 of the employee’s income to an optimum of 7 thousand per quarter how did that occur um they just changed the rules in.
2021 versus because 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 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 5 thousand in twenty twenty that’s twenty six thousand dollars per employee that is since that’s a great deal of money it is now there’s a caution 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 two you would reduce the 26 000 so what we’re seeing typically Kevin is if you took PPP money someplace 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 huge clearly now the big question is why does no one learn about this due to the fact that appearance when I first became aware of this when I initially met Josh you know I’ve got great deals of financial investments in lots of companies I’m a major advocate for entrepreneurship in America and make lots of numerous investments in business owners of which numerous suffered through the pandemic when I first became aware of this I called BS I do not believe it due to the fact that 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 and that were well should have and we used them carefully to survive during the pandemic so when I found out about this I said nah it can’t be true but when I dug around I even called to my politician buddies Governor Senators they didn’t understand about it I indicate that’s how you know that’s how misinformation is that there’s no info out there then a lot of individuals informed me well you can’t get it since you took the PPP likewise not true so let’s ask Josh why does nobody know about the employee retention credit you understand what’s intriguing you’re discussing the banks Kevin due to the fact that 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 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 process procedure that’s all um and here there was chaos because remember in the original cares act you might not do both programs so if you had done PPP you might refrain from doing ERC in the original program and when they changed the law in 2021 the banks were not doing ERC due to the fact that it’s not alone so you’re getting a tax refund so the government never 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 previously do the banks do it nope the banks don’t do it the payroll companies yeah some of them are doing it as a payroll company your accountant no your accountant’s never ever done this before unless you have an account that entered into this business and bottom line my company Kevin has actually been in business given that 2009 and we have actually been working with the federal government and the state federal government to recuperate money for Fortune 500 Fortune 1000 companies so a great deal of our big big corporate clients have worked with bottom line to recuperate other federal government programs we have actually done sales tax and utilize tax unemployment tax work chance tax credits research and development tax credits unclaimed property property tax all of these other federal government programs.
The worker retention tax credit is a broad based refundable tax credit developed to encourage.
employers to keep workers on their payroll. The credit is 50% of approximately $10,000 in wages paid by an.
employer whose organization is totally or partially suspended because of COVID-19 or whose gross receipts.
decrease by more than 50%.
1. The credit is offered to all employers regardless of size including tax exempt organizations. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) little.
services who take Small company Loans.
2. To qualify, the employer needs to satisfy one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s business is fully or partly suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross invoices are listed below 50% of the similar quarter in 2019. When the.
company’s gross receipts go above 80% of a comparable 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 certifying salaries paid up to $10,000 in overall.
It works for wages paid after March 13th and prior to December 31, 2020.
The definition of certifying earnings varies by whether a company had, usually, more or less than.
100 workers in 2019.
Business that concentrate on ERC filing help generally offer competence and support to assist organizations browse the intricate procedure of claiming the credit. They can use various services, including:.
How is the employee retention credit calculated? Employee Retention Credit 941 Example
Eligibility Evaluation: These companies will evaluate your organization’s eligibility for the ERC based on elements such as your industry, revenue, and operations. If you satisfy the requirements for the credit and recognize the optimum credit amount you can declare, they can help determine.
Documentation and Estimation: ERC filing services will help in collecting the needed documents, such as payroll records and financial statements, to support your claim. They will likewise assist determine the credit quantity based on eligible incomes and other certifying expenses.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for previous quarters, these business can examine your past payroll records and financials to recognize potential opportunities for retroactive credits. They can help you amend previous income tax return to claim these refunds.
Filing Support: Business specializing in ERC filings will prepare and submit the essential kinds and paperwork on your behalf. This consists of finishing Type 941 or any other necessary tax forms.
Compliance and Updates: ERC guidelines and assistance have progressed over time. These companies stay updated with the most recent changes and guarantee that your filings comply with the most present guidelines. If the Internal revenue service requests additional details or performs an audit associated to your ERC claim, they can likewise offer continuous support.
It is necessary to research and vet any business offering ERC filing assistance to ensure their reliability and proficiency. Try to find established firms with experience in tax and payroll services, or think about reaching out to trusted accounting companies or tax specialists who use ERC filing support.
Keep in mind that while these business can provide important help, it’s always an excellent idea to have a basic understanding of the ERC requirements and procedure yourself. This will assist you make informed decisions and make sure 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 procedures. The goal of the ERC is to encourage businesses to maintain and pay their employees during the pandemic, even if their operations have actually been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is available to eligible companies, including for-profit services, tax-exempt companies, and particular governmental entities. To certify, employers need to satisfy one of two requirements:.
Business operations were fully or partly suspended due to a government order related to COVID-19.
Business experienced a substantial decrease in gross receipts. As discussed earlier, for 2021, a substantial decrease is defined as a 20% decline in gross receipts compared to the same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decline in gross receipts compared to the same quarter in 2019, or a 20% decrease in gross invoices compared to the instantly preceding quarter.
Credit Amount: The ERC is a refundable tax credit that offsets the employer’s share of Social Security taxes. The credit amount amounts to a percentage (as much as 70%) of certified earnings paid to employees, consisting of 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: Initially, businesses that got a Paycheck Protection Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 permits companies to claim the ERC even if they got a PPP loan. The 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 declare the credit for qualified wages paid as far back as March 13, 2020. This retroactive provision offers an opportunity for businesses to modify prior-year income tax return and get refunds.
Claiming the Credit: Employers can declare the ERC by reporting it on their work tax returns, normally Form 941. The excess can be refunded to the company if the credit goes beyond the amount of employment taxes owed.
It’s important to keep in mind that the ERC arrangements and eligibility requirements have evolved over time. The very best course of action is to speak with a tax expert or visit the official internal revenue service website for the most updated and comprehensive information concerning the ERC, consisting of any current legislative modifications or updates.
To receive the ERC, a business should satisfy among the following criteria:.
The business operations were fully or partly suspended due to a federal government order related to COVID-19.
Business experienced a considerable decline in gross invoices. For 2021, a substantial decrease is defined as a 20% decrease in gross invoices compared to the very same quarter in 2019. For 2022 and beyond, a significant 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 right away preceding quarter.
The ERC is readily available to organizations of all sizes, consisting of tax-exempt companies, but there are some exceptions. Federal government entities and businesses that got a PPP loan may have restrictions on declaring the credit.
The process for claiming the ERC includes finishing the necessary types and including the credit on your employment tax return (normally Type 941). The exact time it takes to process the credit can vary based on numerous factors, including the intricacy of your service and the work of the IRS. It’s suggested to talk to a tax professional for guidance specific to your circumstance.
There are a number of business that can assist with the process of claiming the ERC. Some popular companies that offer assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young.
Please note that the information provided here is based upon general understanding and may not show the most recent updates or modifications to the ERC. It is essential to consult with a tax expert or go to the main internal revenue service site for the most accurate and up-to-date info concerning eligibility, declaring procedures, and offered support.
Less than 100. The credit is based if the company had 100 or less workers on average in 2019.
on salaries paid to all employees whether they actually worked or not. In other words, even if the.
employees worked full-time and earned money for full time work, the company still gets the credit.
Greater than 100. The credit is if the employer had more than 100 staff members on average in 2019.
enabled only for incomes paid to employees who did not work throughout the calendar quarter.
In both cases, “wages” consists of not just money payments however likewise a part of the cost of company.
supplied healthcare. Employee Retention Credit 941 Example
Employers can be immediately reimbursed for the credit by reducing the amount of payroll taxes they.