Lets talk first about Amend 941 For Employee Retention Credit :
Our group here what do these people doing everyone in this space is assisting teach people about ERC and uh constantly offer a stunning breakfast and have individuals really learn about the program we must head to the room where we have the ability to show some of the checks that we are getting for business and I ‘d like to see that what is this this is uh numerous countless dollars literally Kevin numerous countless dollars so these are duplicate copies of the letters that go to customers verifying that the check is on the method I imply you understand if you simply start to take a look at a few of these here I indicate this one’s 8 million this one is 1.1 million 1.7 million 1.4 million I suggest it’s simply I mean think about the number of actual clients that went through the program yeah this is the very end this is the party at the end when the check is confirmed the numbers are validated 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 know when you
get this you know the check is gone for sure and that’s when they pay so they don’t pay anything up until they in fact receive the cash they don’t pay bottom line Wonder trust anything up until this letter is verified the check is on the method they transfer it into their checking account and they can truly trust Wonder trust that the process has actually been completed and the number of you think you’ve processed considering that you began this we’re about 35 000 of these for
about six billion dollars wow so clearly they know what they’re doing and that’s what you require you require professionals 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 essential today the staff member retention credit which the majority of you have actually never ever become aware of I certainly had not become aware of it till very recently and found out a lot about it because this is probably the most affordable cost of capital for any small business anywhere
anytime if you have workers between 5 and five hundred so I’ve got the specialist with me this is Josh Fox he’s the founder and CEO of bottom line Concepts 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 state give 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’ve become yes the Ambassador and paid spokesperson for this I like this program it’s disappearing soon you got to find out everything about it let’s talk employee 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 offered businesses 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 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 money payroll tax refund fine go on sorry I just need to make sure we got that point I indicate that’s a big distinction a loan versus money money I like cash cash 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 lovely 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 staff member 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 individuals on the cap table not for investors it’s for employees right you had to have actually 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 employees and you paid federal payroll taxes that’s why you would be qualified so you need 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 6 quarters the program was open well walk us through the 6 quarters so you had quarters 2 three and 4 of 2020 and you had quarters one 2 and 3 of 2021. okay so that’s how it’s determined you need to be on the W-2 throughout that duration now let’s talk my favorite part cash how much can you return per staff member that was on a W-2 in those six quarters so the computation in 2020 to be specific Kevin is 50 of the worker’s wage to an optimum 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 happen um they simply changed the rules in.
2021 versus since the chaos 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 approximately 5 thousand Max and then what happens 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 worker that is because that’s a great deal of cash it is now there’s a caution 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 two you would decrease the 26 000 so what we’re seeing on average Kevin is if you took PPP cash somewhere around 10 thousand dollars an individual so let’s say hypothetically you owned a dining establishment in New york city City where I’m from and you had a hundred workers and you took PPP money you would still get a million dollar in the mail from the internal revenue service so it’s substantial clearly now the big concern is why does no one know about this because look when I initially heard about this when I initially fulfilled Josh you understand I’ve got great deals of financial investments in lots of companies I’m a major supporter for entrepreneurship in America and make lots of numerous investments in entrepreneurs of which many suffered through the pandemic when I first heard about this I called BS I don’t believe it because I utilize the PPP we went through the money center Banks to get it it was very easy to do we had our CEOs call the banks they got their loans which were well deserved and we utilized them wisely to survive during the pandemic so when I became aware of this I said nah it can’t hold true however when I dug around I even called to my politician friends Governor Senators they didn’t know about it I indicate that’s how you understand that’s how misinformation is that there’s no details out there then a bunch of individuals informed me well you can’t get it since you took the PPP also not true so let’s ask Josh why does no one learn about the staff member retention credit you understand what’s intriguing you’re speaking about the banks Kevin due to the fact that in the PPP loan process the federal government made it very 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 procedure process that’s all um and here there was chaos since keep in mind in the original cares act you could refrain from doing 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 refraining from doing ERC because 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 know how to do this not actually she or he’s never done it before do the banks do it nope the banks don’t do it the payroll business yeah a few of them are doing it as a payroll company your accounting professional no your accounting professional’s never ever 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 given that 2009 and we’ve 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 huge business clients have actually worked with bottom line to recuperate other federal government programs we have actually done sales tax and utilize tax unemployment tax work opportunity tax credits research and development tax credits unclaimed property real estate tax all of these other federal government programs.
The employee retention tax credit is a broad based refundable tax credit developed to encourage.
employers to keep staff members on their payroll. The credit is 50% of up to $10,000 in earnings paid by an.
employer whose business is fully or partially suspended because of COVID-19 or whose gross receipts.
decline by more than 50%.
1. The credit is readily available 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) little.
companies who take Small Business Loans.
2. To certify, the employer needs to fulfill one of two alternative tests. The tests are computed each.
calendar quarter– Either.
o the employer’s company is totally or partly suspended by federal government order due to COVID-19.
during the calendar quarter or.
o the employer’s gross receipts are listed below 50% of the equivalent quarter in 2019. As soon as the.
company’s gross receipts 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 qualifying incomes paid up to $10,000 in overall.
It is effective for salaries paid after March 13th and prior to December 31, 2020.
The meaning of certifying salaries varies by whether an employer had, typically, basically than.
100 employees in 2019.
Companies that concentrate on ERC filing help usually supply knowledge and support to help companies browse the intricate process of claiming the credit. They can use different services, including:.
How is the employee retention credit calculated? Amend 941 For Employee Retention Credit
Eligibility Assessment: These business will evaluate your organization’s eligibility for the ERC based on factors such as your market, revenue, and operations. They can help identify if you meet the requirements for the credit and determine the optimum credit quantity you can claim.
Documentation and Calculation: ERC filing services will help in gathering the needed paperwork, such as payroll records and financial declarations, to support your claim. They will likewise assist determine the credit quantity based upon eligible earnings and other qualifying costs.
Retroactive Claim Evaluation: If you are qualified to declare the ERC for prior quarters, these companies can evaluate your previous payroll records and financials to recognize possible chances for retroactive credits. They can assist you amend prior income tax return to declare these refunds.
Filing Assistance: Business focusing on ERC filings will prepare and send the needed kinds and documentation in your place. This includes finishing Form 941 or any other necessary tax return.
Compliance and Updates: ERC regulations and assistance have actually progressed in time. These companies stay upgraded with the most recent modifications and guarantee that your filings adhere to the most current guidelines. If the IRS demands additional information or conducts an audit related to your ERC claim, they can also offer continuous assistance.
It is very important to research and veterinarian any company using ERC filing support to ensure their reliability and knowledge. Search for recognized firms with experience in tax and payroll services, or think about reaching out to trusted accounting firms or tax experts who offer ERC filing assistance.
Remember that while these business can supply important help, it’s always a good concept to have a standard understanding of the ERC requirements and process yourself. This will help you make notified decisions and guarantee accurate filings.
The Staff Member Retention Credit (ERC) is a refundable tax credit introduced by the U.S. federal government as part of COVID-19 relief procedures. The objective of the ERC is to encourage services to maintain and pay their employees throughout the pandemic, even if their operations have been impacted.
Here are some key points about the ERC:.
Eligibility: The ERC is readily available to qualified employers, including for-profit businesses, tax-exempt companies, and particular governmental entities. To certify, companies need to satisfy one of two requirements:.
The business operations were completely or partially suspended due to a government order related to COVID-19.
Business experienced a significant decrease in gross receipts. As mentioned earlier, for 2021, a considerable decline is specified as a 20% decline in gross invoices compared to the same quarter in 2019. For 2022 and beyond, a significant decrease is specified as a 20% decrease in gross receipts compared to the very same quarter in 2019, or a 20% decrease in gross receipts 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 quantity is equal to a percentage (as much as 70%) of certified salaries paid to workers, including certain health insurance 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, services that received an Income Protection Program (PPP) loan were not eligible for the ERC. Legislation passed in late 2020 and extended in 2021 enables businesses to claim the ERC even if they received a PPP loan. Nevertheless, the same salaries can not be used to claim both the PPP loan forgiveness and the ERC.
Retroactive Arrangement: The ERC has been retroactively broadened and boosted, permitting eligible companies to declare the credit for qualified earnings paid as far back as March 13, 2020. This retroactive provision supplies a chance for companies to amend prior-year income tax return and get refunds.
Declaring the Credit: Companies can claim the ERC by reporting it on their work income tax return, generally Form 941. If the credit surpasses the quantity of work taxes owed, the excess can be refunded to the employer.
It is necessary to note that the ERC arrangements and eligibility criteria have actually progressed in time. The very best strategy is to seek advice from a tax professional or go to the main IRS website for the most in-depth and updated info concerning the ERC, consisting of any recent legislative changes or updates.
To receive the ERC, a business needs to meet one of the following requirements:.
The business operations were completely or partially suspended due to a government order related to COVID-19.
The business experienced a considerable decline in gross invoices. For 2021, a significant decrease is defined 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% decline in gross receipts compared to the exact same quarter in 2019, or a 20% decline in gross receipts compared to the instantly preceding quarter.
The ERC is offered to businesses of all sizes, consisting of tax-exempt organizations, however there are some exceptions. Government entities and organizations that received a PPP loan may have restrictions on declaring the credit.
The process for declaring the ERC includes finishing the necessary kinds and consisting of the credit on your work tax return (usually Type 941). The exact time it takes to process the credit can vary based upon numerous factors, consisting of the intricacy of your company and the work of the IRS. It’s recommended to seek advice from a tax professional for assistance specific to your circumstance.
There are several companies that can assist with the procedure of claiming the ERC. Some well-known business that use support with ERC claims include ADP, Paychex, Deloitte, and Ernst & Young.
Please keep in mind that the info provided here is based upon basic understanding and might not reflect the most current updates or modifications to the ERC. It is necessary to seek advice from a tax professional or go to the main internal revenue service site for the most precise and current information relating to eligibility, declaring treatments, and readily available help.
Less than 100. If the employer had 100 or fewer employees on average in 2019, then the credit is based.
on earnings paid to all workers whether they really worked or not. To put it simply, even if the.
employees worked full-time and made money for full time work, the employer still gets the credit.
Greater than 100. If the employer had more than 100 employees usually in 2019, then the credit is.
permitted only for earnings paid to employees who did not work throughout the calendar quarter.
In both cases, “salaries” consists of not simply money payments but likewise a portion of the cost of employer.
offered healthcare. Amend 941 For Employee Retention Credit
Companies can be instantly reimbursed for the credit by lowering the amount of payroll taxes they.