Lets talk first about How To File Form 941 X For Employee Retention Credit :
Our team here what do these people doing everybody in this room is helping teach individuals about ERC and uh constantly supply a beautiful breakfast and have people really discover the program we ought to head to the space where we have the ability to show some of the checks that we are getting for companies and I wish to see that what is this this is uh hundreds of millions of dollars actually Kevin numerous countless dollars so these are replicate copies of the letters that go to customers confirming that the check is on the way I suggest you know if you simply begin to look at a few of these here I imply this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I mean it’s simply I suggest consider 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 verified the numbers are validated and the check is on the mail in the mail from the internal revenue service heading to the consumer so that’s how you’re able to track it you understand when you
get this you know the check is opted for sure which’s when they pay so they don’t pay anything until they actually receive the money they do not pay bottom line Wonder trust anything until 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 how many you think you have actually processed because you started this we have to do with 35 000 of these for
about 6 billion dollars wow so plainly they know what they’re doing which’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 discussing something actually important today the employee retention credit which most of you have never ever heard of I certainly hadn’t heard of it up until very just recently and learned a lot about it because this is probably the most affordable cost of capital for any small business 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 hard this isn’t like PPP we simply contact your bank supervisor and state offer 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’ve ended up being yes the Ambassador and paid representative for this I love this program it’s going away very soon you got to learn all about it let’s talk staff member retention credit Josh Fox what is an ERC let’s just start there so during the Trump Administration when President Trump was enacted they created the cares Act and the cares act provided businesses 3 chances you had the PPP loan you had the eidl loan and you had the ERC tax refund and practically everyone it makes a huge distinction right there two of them are loans and one’s a refund precisely so the ERC is a refund that’s.
fix the money money payroll tax refund fine go on sorry I just need to make certain we got that point I suggest that’s a big difference a loan versus cash money I like cash money that’s what we’re discussing 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 stunning difficult check in the mail where you get real money from the internal revenue service all right so let’s speak about how it works because it sounds like to me if it’s a if it’s employee 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 shareholders it’s for staff members right you had to have owned a company but it’s based upon 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 qualified 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 appropriate so there were six quarters the program was open well walk us through the six quarters so you had quarters two 3 and 4 of 2020 and you had quarters one 2 and 3 of 2021. fine so that’s how it’s measured you need to be on the W-2 throughout that duration now let’s talk my preferred part cash how much can you return per employee that was on a W-2 in those six quarters so the calculation in 2020 to be specific Kevin is 50 of the worker’s wage to a maximum of five thousand dollars per worker for the year of 2020 and in 2021 the numbers skyrocketed to 70 of the worker’s salary to a maximum of seven thousand per quarter how did that occur um they just altered the rules in.
2021 versus since the chaos of the pandemic so they wished 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 approximately five thousand Max and then what happens 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 staff member that is since that’s a lot of money it is now there’s a caveat here the PPP money would need to be reduced from the twenty 6 thousand dollars so if you took PPP loan one and PPP loan 2 you would lower the 26 000 so what we’re seeing on average Kevin is if you took PPP money someplace 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 certainly now the huge concern is why does no one understand about this due to the fact that look when I first found out about this when I initially satisfied Josh you understand I have actually got lots of investments in great deals of companies I’m a significant supporter for entrepreneurship in America and make numerous lots of investments in entrepreneurs of which numerous suffered through the pandemic when I initially heard about this I called BS I do not think it since I utilize 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 should have and we used them carefully to survive during the pandemic so when I became aware of this I stated nah it can’t hold true however when I dug around I even called to my political leader pals Guv Senators they didn’t learn about it I suggest that’s how you know that’s how false information is that there’s no information out there then a bunch of people told me well you can’t get it due to the fact that you took the PPP also not true so let’s ask Josh why does nobody understand about the staff member retention credit you know what’s fascinating you’re discussing the banks Kevin because in the PPP loan procedure the federal government made it extremely clear that if you wanted a PPP loan you would call Wells Fargo Citibank Bank of America any of the huge banks in our nation and they would process process 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 turmoil because remember in the original cares act you could not do both programs so if you had actually done PPP you might not do ERC in the initial program and when they altered 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 federal government never ever made it clear to anybody about how to.
do this does your CFO understand how to do this not really she or he’s never done it before 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 done this before unless you have an account that went into this company and bottom line my firm Kevin has been in business given that 2009 and we have actually been dealing with the federal government and the state federal government to recuperate money for Fortune 500 Fortune 1000 companies so a lot of our huge big corporate clients have actually dealt with bottom line to recover other federal government programs we have actually done sales tax and use tax unemployment tax work chance 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 developed to motivate.
companies to keep employees on their payroll. The credit is 50% of as much as $10,000 in incomes paid by an.
Since of COVID-19 or whose gross receipts, company whose company is completely or partially suspended.
decline by more than 50%.
1. The credit is available to all companies no matter size consisting of tax exempt companies. There are.
only two exceptions: (1) state and city governments and their instrumentalities and (2) small.
businesses who take Small Business Loans.
2. To qualify, the employer has to satisfy one of two alternative tests. The tests are determined each.
calendar quarter– Either.
o the company’s service is fully or partly suspended by government order due to COVID-19.
throughout the calendar quarter or.
o the employer’s gross invoices are below 50% of the equivalent quarter in 2019. Once the.
company’s gross invoices go above 80% of a comparable quarter in 2019 they no longer certify.
after the end of that quarter.
Calculation of the Credit.
The quantity of the credit is 50% of the certifying wages paid up to $10,000 in overall.
It is effective for wages paid after March 13th and before December 31, 2020.
The definition of certifying wages differs by whether an employer had, usually, basically than.
100 workers in 2019.
Business that specialize in ERC filing help normally offer competence and assistance to help companies navigate the complex process of claiming the credit. They can use different services, including:.
How is the employee retention credit calculated? How To File Form 941 X For Employee Retention Credit
Eligibility Evaluation: These companies will examine your organization’s eligibility for the ERC based upon elements such as your market, earnings, and operations. They can assist identify if you meet the requirements for the credit and identify the optimum credit amount you can declare.
Paperwork and Computation: ERC filing services will assist in collecting the required paperwork, such as payroll records and financial declarations, to support your claim. They will likewise help calculate the credit amount based on eligible earnings and other certifying expenditures.
Retroactive Claim Review: If you are qualified to claim the ERC for prior quarters, these business can review your past payroll records and financials to determine potential chances for retroactive credits. They can help you amend previous tax returns to claim these refunds.
Filing Support: Companies concentrating on ERC filings will prepare and submit the needed types and paperwork on your behalf. This consists of finishing Form 941 or any other required tax return.
Compliance and Updates: ERC guidelines and guidance have progressed gradually. These business stay upgraded with the current changes and ensure that your filings comply with the most present guidelines. They can likewise supply continuous support if the internal revenue service requests extra info or conducts an audit related to your ERC claim.
It is essential to research and veterinarian any company providing ERC filing support to guarantee their reliability and proficiency. Search for recognized firms with experience in tax and payroll services, or think about connecting to relied on accounting firms or tax professionals who provide ERC submitting assistance.
Keep in mind that while these companies can provide valuable help, it’s constantly a good idea to have a standard understanding of the ERC requirements and procedure yourself. This will assist you make notified decisions and make sure accurate filings.
The Worker 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 motivate companies 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 offered to eligible companies, including for-profit companies, tax-exempt organizations, and certain governmental entities. To qualify, companies should fulfill one of two criteria:.
Business operations were fully or partly suspended due to a federal government order related to COVID-19.
Business experienced a significant decline in gross invoices. As discussed previously, for 2021, a considerable 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% decline 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 amount is equal to a portion (approximately 70%) of certified salaries paid to workers, including certain health plan costs. The maximum credit per worker is $7,000 per quarter in 2021 and $10,000 per quarter in 2022 and beyond.
Interaction with PPP: Initially, organizations that received an Income Protection Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 allows services to declare the ERC even if they got a PPP loan. The same salaries can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Provision: The ERC has actually been retroactively broadened and boosted, enabling eligible employers to declare the credit for qualified earnings paid as far back as March 13, 2020. This retroactive provision provides a chance for businesses to change prior-year tax returns and get refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their work income tax return, typically Form 941. If the credit goes beyond the quantity of employment taxes owed, the excess can be reimbursed to the company.
It’s important to keep in mind that the ERC provisions and eligibility requirements have progressed gradually. The best course of action is to talk to a tax expert or check out the official IRS site for the most in-depth and updated details concerning the ERC, including any recent legal modifications or updates.
To receive the ERC, an organization needs to meet one of the following criteria:.
The business operations were fully or partially suspended due to a government order related to COVID-19.
The business experienced a considerable decrease in gross receipts. For 2021, a substantial decrease is defined as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decrease is defined 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 immediately preceding quarter.
The ERC is available to companies of all sizes, consisting of tax-exempt companies, but there are some exceptions. Federal government entities and services that received a PPP loan might have constraints on claiming the credit.
The process for claiming the ERC includes completing the necessary kinds and including the credit on your employment income tax return (normally Type 941). The exact time it requires to process the credit can differ based on numerous aspects, consisting of the complexity of your company and the work of the IRS. It’s recommended to speak with a tax expert for guidance particular to your scenario.
There are a number of business that can aid with the process of claiming the ERC. These consist of accounting companies, tax advisory services, and payroll provider. Some widely known companies that offer assistance with ERC claims consist of ADP, Paychex, Deloitte, and Ernst & Young. It’s advisable to research and contact these companies directly to inquire about their costs and services.
Please note that the info offered here is based on general understanding and may not show the most current updates or changes to the ERC. It is necessary to consult with a tax professional or visit the official IRS website for the most precise and current info concerning eligibility, claiming procedures, and offered help.
Less than 100. If the employer had 100 or less staff members typically in 2019, then the credit is based.
on wages paid to all employees whether they really worked or not. Simply put, 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 company had more than 100 staff members on average in 2019.
permitted only for earnings paid to employees who did not work during the calendar quarter.
In both cases, “earnings” consists of not simply money payments but likewise a portion of the cost of company.
offered health care. How To File Form 941 X For Employee Retention Credit
Employers can be immediately repaid for the credit by reducing the amount of payroll taxes they.