Lets talk first about How To File 941 X For Employee Retention Credit :
Our group here what do these guys doing everybody in this room is helping teach individuals about ERC and uh constantly provide a beautiful breakfast and have individuals really find out about the program we must head to the space where we have the ability to show a few of the checks that we are getting for companies and I ‘d like to see that what is this this is uh numerous countless dollars actually Kevin numerous millions of dollars so these are replicate copies of the letters that go to customers validating that the check is on the method I indicate you know if you simply start to look at a few of these here I suggest this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s simply I indicate 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 validated the numbers are verified 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
receive this you understand the check is gone for sure which’s when they pay so they do not pay anything until they actually receive the money they do not pay bottom line Wonder trust anything till this letter is validated the check is on the method they transfer it into their bank account and they can truly trust Wonder trust that the process has been completed and the number of you think you have actually processed given that you started this we’re about 35 000 of these for
about 6 billion dollars wow so clearly they understand what they’re doing which’s what you need you require specialists 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 truly essential today the employee retention credit which most of you have actually never ever heard of I certainly hadn’t become aware of it up until extremely recently and learned a lot about it since this is most likely the lowest cost of capital for any small company anywhere
anytime if you have employees in between five and five hundred so I’ve got the specialist 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 challenging this isn’t like PPP we just phone 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 have actually ended up being yes the Ambassador and paid spokesperson for this I love this program it’s disappearing soon you got to discover 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 developed the cares Act and the cares act used organizations three opportunities you had the PPP loan you had the eidl loan and you had the ERC tax refund and nearly everybody it makes a huge difference right there 2 of them are loans and one’s a refund precisely so the ERC is a refund that’s.
remedy the cash cash payroll tax refund all right go on sorry I just have to make sure we got that point I indicate that’s a huge distinction a loan versus cash money I like money cash that’s what we’re speaking about okay 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 lovely difficult check in the mail where you get actual cash from the internal revenue service all right so let’s discuss how it works because it sounds like to me if it’s a if it’s worker retention credit that person had to be a staff member so I’m going to make the Presumption this money is not for the owner not for people on the cap table not for shareholders it’s for workers right you needed to have actually owned a service but it’s based upon you having W-2 employees in America not 10.99. so as long as you had W-2 workers and you paid federal payroll taxes that’s why you would be qualified so you have 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 right so there were six quarters the program was open well walk us through the six quarters so you had quarters 2 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 duration now let’s talk my favorite part cash just 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 exact Kevin is 50 of the staff member’s salary to a maximum of five thousand dollars per employee for the year of 2020 and in 2021 the numbers increased to 70 of the employee’s income to an optimum of 7 thousand per quarter how did that take place 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 staff members on payroll 100 so if you can get 5 000 per person Max in twenty that was 50 in 2020 up to 5 thousand Max and then what takes place 21 000 Max in 2021 oh that’s how you create twenty six thousand twenty one thousand to twenty twenty one plus 5 thousand in twenty twenty that’s twenty 6 thousand dollars per employee that is since that’s a lot of money it is now there’s a caveat here the PPP money would have to be minimized from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan two you would minimize 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 state hypothetically you owned a dining establishment in New York City where I’m from and you had a hundred workers and you took PPP cash 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 nobody understand about this because look when I first found out about this when I first met Josh you know I’ve got lots of financial investments in lots of companies I’m a major advocate for entrepreneurship in America and make many many investments in entrepreneurs of which many suffered through the pandemic when I initially heard about this I called BS I do not think it due to the fact that I use the PPP we went through the cash 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 should have and we used them sensibly to survive during the pandemic so when I found out about this I said nah it can’t be true however when I dug around I even contacted us to my political leader buddies Governor Senators they didn’t know about it I mean that’s how you know that’s how misinformation is that there’s no information out there then a bunch of individuals 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 nobody know about the employee retention credit you understand what’s fascinating you’re discussing the banks Kevin due to the fact that in the PPP loan procedure the federal government made it extremely 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 process 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 turmoil because keep in mind 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 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 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 business your accountant no your accounting professional’s never ever done this before unless you have an account that went into this organization and bottom line my firm Kevin has stayed in business considering that 2009 and we’ve been working with the federal government and the state government to recuperate money for Fortune 500 Fortune 1000 companies so a lot of our big huge corporate clients have actually dealt with bottom line to recuperate other government programs we’ve done sales tax and use tax unemployment tax work opportunity tax credits research and development tax credits unclaimed property property tax all of these other government programs.
The employee retention tax credit is a broad based refundable tax credit designed to motivate.
companies to keep workers on their payroll. The credit is 50% of as much as $10,000 in salaries paid by an.
Because of COVID-19 or whose gross receipts, employer whose business is completely or partially suspended.
decline by more than 50%.
1. The credit is readily available to all companies despite size consisting of tax exempt companies. There are.
only two exceptions: (1) state and local governments and their instrumentalities and (2) little.
businesses who take Small company Loans.
2. To qualify, the company needs to fulfill one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the employer’s company is totally or partly suspended by federal government order due to COVID-19.
throughout the calendar quarter or.
o the company’s gross invoices are listed below 50% of the comparable quarter in 2019. As soon as the.
company’s gross invoices exceed 80% of an equivalent quarter in 2019 they no longer certify.
after the end of that quarter.
Computation of the Credit.
The quantity of the credit is 50% of the certifying salaries paid up to $10,000 in overall.
It works for salaries paid after March 13th and prior to December 31, 2020.
The definition of certifying incomes varies by whether a company had, on average, more or less than.
100 staff members in 2019.
Companies that focus on ERC filing help typically supply expertise and support to help businesses browse the complex procedure of declaring the credit. They can use numerous services, including:.
How is the employee retention credit calculated? How To File 941 X For Employee Retention Credit
Eligibility Assessment: These business will examine your organization’s eligibility for the ERC based upon aspects such as your market, earnings, and operations. If you fulfill the requirements for the credit and determine the optimum credit amount you can claim, they can assist determine.
Paperwork and Estimation: ERC filing services will assist in collecting the required documents, such as payroll records and monetary declarations, to support your claim. They will likewise assist calculate the credit amount based on qualified salaries and other qualifying expenses.
Retroactive Claim Review: If you are eligible to claim the ERC for prior quarters, these business can evaluate your previous payroll records and financials to recognize prospective opportunities for retroactive credits. They can help you change previous tax returns to declare these refunds.
Filing Assistance: Business concentrating on ERC filings will prepare and send the required forms and paperwork in your place. This consists of completing Form 941 or any other necessary tax return.
Compliance and Updates: ERC guidelines and guidance have progressed with time. These companies stay upgraded with the current modifications and make sure that your filings comply with the most current guidelines. If the IRS requests additional details or carries out an audit associated to your ERC claim, they can likewise supply continuous support.
It is very important to research study and veterinarian any company using ERC filing assistance to guarantee their credibility and competence. Search for recognized firms with experience in tax and payroll services, or think about connecting to relied on accounting firms or tax professionals who offer ERC filing assistance.
Remember that while these companies can supply valuable help, it’s constantly a good idea to have a fundamental understanding of the ERC requirements and procedure yourself. This will help you make informed decisions and ensure accurate filings.
The Worker Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief measures. The objective of the ERC is to encourage companies to retain and pay their employees during the pandemic, even if their operations have been affected.
Here are some key points about the ERC:.
Eligibility: The ERC is offered to qualified companies, consisting of for-profit businesses, tax-exempt organizations, and specific governmental entities. To certify, companies need to meet one of two criteria:.
The business operations were totally or partly suspended due to a federal government order related to COVID-19.
The business experienced a considerable decrease in gross invoices. As mentioned earlier, for 2021, a significant decline is defined as a 20% decrease in gross receipts compared to the exact same quarter in 2019. For 2022 and beyond, a substantial decline is defined as a 20% decline in gross receipts compared to the very 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 (up to 70%) of qualified wages paid to staff members, consisting of certain health plan expenditures. 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 received an Income Protection Program (PPP) loan were not qualified for the ERC. Nevertheless, legislation passed in late 2020 and extended in 2021 enables services to claim the ERC even if they received a PPP loan. However, the very same wages can not be utilized to declare both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has been retroactively expanded and improved, allowing qualified employers to claim the credit for certified wages paid as far back as March 13, 2020. This retroactive arrangement provides a chance for companies to amend prior-year income tax return and receive refunds.
Declaring the Credit: Employers can declare the ERC by reporting it on their employment tax returns, normally Kind 941. The excess can be refunded to the company if the credit exceeds the amount of employment taxes owed.
It is very important to note that the ERC arrangements and eligibility criteria have developed in time. The very best course of action is to speak with a tax expert or visit the main internal revenue service website for the most updated and detailed details regarding the ERC, including any recent legislative changes or updates.
To get approved for the ERC, a service must fulfill one of the following criteria:.
The business operations were completely or partly suspended due to a government order related to COVID-19.
The business experienced a considerable decline in gross receipts. For 2021, a substantial decline is specified as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a substantial decline is defined as a 20% decline in gross receipts compared to the very 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, including tax-exempt organizations, however there are some exceptions. For instance, federal government entities and organizations that got a PPP loan may have restrictions on claiming the credit.
The process for claiming the ERC includes completing the required forms and including the credit on your work tax return (normally Type 941). The exact time it takes to process the credit can vary based upon numerous aspects, consisting of the complexity of your organization and the workload of the internal revenue service. It’s suggested to consult with a tax professional for assistance specific to your situation.
There are numerous business that can help with the procedure of declaring the ERC. Some widely known companies that offer help with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the information provided here is based upon basic knowledge and might not show the most recent updates or changes to the ERC. It’s important to seek advice from a tax professional or visit the main internal revenue service website for the most precise and updated info concerning eligibility, claiming procedures, and available help.
Less than 100. The credit is based if the employer had 100 or fewer staff members on average in 2019.
on incomes paid to all staff members whether they really worked or not. Simply put, even if the.
employees worked full time and made money for full-time work, the company still gets the credit.
Greater than 100. The credit is if the company had more than 100 workers on average in 2019.
enabled just for incomes paid to employees who did not work during the calendar quarter.
In both cases, “wages” includes not simply money payments but also a part of the expense of employer.
provided healthcare. How To File 941 X For Employee Retention Credit
Employers can be right away repaid for the credit by decreasing the quantity of payroll taxes they.