Employee Retention Tax Credit Explainer ERTC Claims Process Video Launched
The new Employee Retention Tax Credit (ERTC) was created to help business owners and their employees during the coronavirus pandemic. Now, ERTC Claims has launched a new video to help businesses understand the process of claiming this tax credit. This video will explain the ERTC claims process in detail, including what information is needed, how to apply, and more.
Let's take a closer look at the ERTC Claims process video.
Overview of Employee Retention Tax Credit (ERTC)
The federal Coronavirus Aid, Relief and Economic Security (CARES) Act of 2020 created the Employee Retention Tax Credit (ERTC) to help employers keep their businesses running during the economic downturn caused by COVID-19. The ERTC is a refundable tax credit available to employers who continue to pay wages and maintain benefits for their employees. This credit can help employers offset payroll taxes up to certain limits.
Eligible employers can receive a refundable tax credit equal to 70 percent of up to $10,000 in wages paid per employee during the 2020 calendar year. Employers qualify for this tax credit if they have experienced significant revenue losses due to COVID-19 or have had operations fully or partially suspended due to government mandates related to COVID-19.
In order for an employer’s ERTC claim information to be processed properly by payroll filings, it is important that they collect and maintain detailed employee wage records from January 1 – December 31, 2020. The Internal Revenue Service (IRS) requires the collection of personal information from each qualifying employee on Form 5884C, Employee Retention Tax Credit Calculation and Collection of Employee Wages form in order for them process ERTC claims correctly.
For further assistance with claim calculations and IRS filing requirements, the IRS has launched an informative video as part of a larger outreach campaign explaining the process step-by-step so that any small business owner can get started with their own claims quickly without worrying about potential filing errors or missing important details required by law.
Overview of ERTC Claims Process Video
As part of the government’s efforts to support businesses and employees affected by the coronavirus outbreak, the Employee Retention Tax Credit (ERTC) is designed to help companies keep their employees on payroll. To assist employers in understanding and claiming the provisions of the ERTC, a new video titled “Introduction to ERTC Claims Process” has been launched.
The video describes how businesses can claim a 50% tax credit for eligible wages paid from March 13th 2020 to December 31st 2020 under the Employee Retention Tax Credit. The video provides an overview of the eligibility criteria and payment process for employers who are interested in claiming this credit. Additionally, it explains how businesses can utilize this tax credit program as part of their financial health strategy.
The video further explains that businesses must have experienced either suspension of operations due to COVID-19 or decline in gross receipts of more than 50% compared to 2019 levels in order to be eligible for this program. It further states that payments received through other government programs such as Paycheck Protection Program (PPP) will not be counted against any potential benefit a business may receive through ERTC claims process.
The “Introduction to ERTC Claims Process” video also touches on topics such as:
- Maximum amounts that can be claimed;
- Documentation requirements;
- Deadlines; and
- Procedures for filing claims with IRS.
The final portion of the video outlines helpful resources for those interested in finding out more about ERTC claims process and how it applies to their specific business situation.
The Employee Retention Tax Credit (ERTC) was established by the government as part of the Coronavirus Aid Relief and Economic Security (CARES) Act to provide financial relief to businesses that have been financially impacted by the pandemic.
To be eligible for the ERTC, businesses must meet certain criteria in terms of their number of employees, wages, and financial losses. In this section, we'll explain the criteria that must be met in order to qualify for the ERTC:
- Number of employees
- Financial losses
In order to qualify for the Employee Retention Tax Credit (ERTC), an employer must have experienced a either Full or Partial Suspension of operations duration business, or a significant decline in gross receipts compared to the same quarter from the previous year. Qualifying wages are wages that are paid during either of these two periods, beginning on March 12, 2020 and ending on December 31, 2020. This period may be extended per Internal Revenue Service guidance.
Furthermore, to qualify for the ERTC wages must be Paid To Employees Can Not Exceed $10,000 per quarter per employee including health plan expenses. Only increased wages paid due to reduction in hours or suspension of operations or decreased gross receipts over same quarter prior year can be included in Qualifying Wages. Employers may calculate their ERTC qualified wages using any reasonable method but need to document their process and keep records available if requested by IRS.
Employers will also need to consider any applicable state and local taxes which are incurred when filing quarterly taxes related to payroll. If filing Form 5884-A, employers will then determine the amount of the credit they can claim by multiplying the Qualifying Wages times 50%. Employers with fewer than 50 full-time employees are able to maximize their claimable credit amount up to $50K for each quarter as specified on Form 5884-A.
The Employee Retention Tax Credit (ERTC) is a measure implemented by the federal government to help businesses and organizations which have been affected by the COVID-19 pandemic. This credit is available for eligible employers that have either fully or partially suspended operations during a calendar quarter due to the effects of COVID-19, or has experienced significant reductions in gross receipts (50% or more compared to the same period in the preceding year).
Qualifying businesses may be eligible to claim this tax credit if they meet certain criteria:
- The business must have been in operation on March 12, 2020.
- The business must maintain an office/establishment within the United States and/or territories.
- The employer must carry on a trade or business during the calendar quarter when claiming ERTC eligibility.
- In order to receive ERTC, employers cannot receive assistance under PPP nor claimed ERTC for wages paid in prior quarters for which PPP was received.
- At least one employee retained by the employer must continue working full time (not part time) during such calendar quarter and receive wages from such employer that are not covered by PPP.
In addition, there are several types of employers who may not qualify for this tax credit including: government entities, foreign entities and individuals who receive wages subject to U.S. income tax withholding as well as any business organization exempt from income tax under IRC sections 501(c), 521(b) or 860(b).
The U.S. Department of the Treasury has mandated regulations for claiming the Employee Retention Tax Credit (ERTC) that allow employers to retain their workforces and receive a payroll tax credit to support their companies’ COVID-19 recovery. Employees must meet certain qualifications to be eligible for the ERTC, which include a reduction in gross receipts or operations due to the coronavirus pandemic as well as participating in an Qualified Health Plan or Plant Ancillary Benefit Plan.
In order to claim ERTC, employers must meet certain conditions with respect to their employees such as maintaining their average number of full-time equivalent employees from 2019, or hire new employees before December 31, 2020. Furthermore, qualifying employees must have worked more than two consecutive months for an employer who experienced at least a 20% reduction in gross receipts compared to 2019's numbers and must also fall within an income range specified by the Treasury Department ($3,000/month or less).
Additionally there are separate criteria for eligibility of specified groups such as those affected by COVID–19 related closures or those affected by reductions in hours sufficient enough to bring them below the threshold set by Treasury Department alluded earlier; these guidelines establish that these individuals may be eligible so long as they earn no less than $2,000 per month on average over two consecutive months regardless of any qualifying health plan participation status/hours worked considerations.
ERTC Claims Process
Employee Retention Tax Credit (ERTC) claims process is an important process for employers as it helps them claim for the tax credit. Through ERTC claims, employers can easily receive tax credits for a portion of their payrolls.
To make it easier for employers to understand the ERTC claims process, a video has been launched to walk employers through the important steps they need to take in order to submit a claim. Let's discuss the ERTC claims process further.
Calculating Qualifying Wages
Employers can calculate the qualified wages that are eligible for ERTC credits with a formula based on their total number of full-time employees, the average number of monthly full-time employees, and their average annual wages for 2020. Specifically, employers should calculate their total payroll costs for 2020 (including wages and health benefits) for all eligible full-time employees. They should then divide that amount by 12 to obtain the average monthly payroll cost. To find the average number of full-time employees per month, employers should add together all full-time employees in each month (January through December) and then divide that total by 12. Now they have calculated two important numbers:
- Average Monthly Payroll Costs; and
- Average Number of Full-Time Employees;
Once qualifying wages have been determined, employers must further reduce these wages if they received or intend to receive certain other credits related to paid sick/family leave under the Families First Coronavirus Response Act or another government funded funding program in 2020 or 2021. The actual credit depends on both the amount of qualified wages paid during a given quarter AND what type of benefit is provided (e.g., Sick Leave Credits vs Paid Family Leave Credit). Employers with multiple locations must also be sure to consider any apportionment rules that may apply when calculating qualifying wage amounts at different sites or locations around the country. It is important for employers to understand these components so they are fully prepared when filing taxes related to ERTC claims process credits.
Submitting ERTC Claims
Sending in ERTC claims is the step which qualifies employers for the Employee Retention Tax Credit. In order to successfully submit and receive the ERTC, employers must understand the process and meet all requirements. As an employer, you will need to complete and submit IRS Form 941-X, Adjusted Employer’s Quarterly Federal Tax Return or Claim for Refund.
The form submission will include information related to your total wages paid, hours worked by FTEs during the calendar quarter, state unemployment insurance taxes paid during the quarter and other information. Furthermore, it is important to note that your ERTC claim must match with Form 941 that was filed earlier in the same year as you are claiming credits. Employment records must be kept for a period of 4 years after submitting a claim for ERTC to prove accuracy of information submitted if requested by IRS.
In order to simplify this process for businesses seeking assistance with gathering documentation and filing claims for credits under the Employee Retention Tax Credit Program (ERTC), our company has launched its latest step-by-step video guide on how to submit accurate and timely ERTC claims based on current guidelines from the Internal Revenue Service (IRS). The guide covers topics such as:
- Eligibility requirements
- Form preparation tips
- Filing techniques available via online or traditional mail submission processes in line with current regulations from IRS.
Documenting ERTC Claims
Documentation is essential for the successful claim of payroll tax credits under the Employee Retention Tax Credit (ERTC). Accurate records of qualified wages paid and proper filing are key to receiving ERTC payments. This guide will provide step-by-step information on documenting and filing ERTC claims.
Before claiming the ERTC, employers must determine eligibility first by meeting certain criteria. Eligible employers can qualify for an immediate end of year refundable payroll tax credit equal to 70% of the qualified wages paid (up to a maximum of $10,000 per employee). Qualified wages refer to taxable wages (up to $10,000) in calendar quarters when businesses were partially closed or were experiencing a significant decline in gross receipts compared to the same period in 2019. Employers with fewer than 100 full-time employees must pay at least 50% of their total regular rate wages toward the designated quarter’s qualified wages alone in order to receive generous credit rates.
Once eligibility has been determined, employers should document their eligible employees’ information and paystubs related to each quarter’s claimed credit. Sectionalized reports showing all employees’ names, hire dates, federal ID numbers and social security numbers as well as types of employee payments made are also required components for proper documentation and accurate filings. Payroll summaries must also report each quarter’s total costs along with total claimed wages over that period. Employers should also provide copies of appropriate forms 941 filed quarterly with the IRS and any other related documentation such as a written declaration confirming qualification within days prior to filing for claim disbursement.
Finally, companies should retain copies of documents related with their ERTC claims submission including all supporting business financial evidence like records on gross receipts from customers or from government funds before filing for confiscation and compensation acceptance decisions from eligible payment organizations like banks or authorities overseeing relief payments during COVID19 era who can assist when needed in making sure that reimbursement takes place quickly after current regulations dictate those possibilities are available.
ERTC Claims Process Video
With the Employee Retention Tax Credit (ERTC) playing such an important role in helping businesses stay afloat during the pandemic, it is essential to understand the process for claiming the credit.
To make it easier for businesses to understand the ERTC claims process, a video has been launched by the IRS to explain the process in detail. This video will take businesses through the process from start to finish and provide valuable information that can help them get their ERTC claim filed correctly.
Overview of Video
The ERTC Claims Process Video is a detailed explainer video that provides viewers with an overview of how the Employee Retention Tax Credit (ERTC) works, what type of business might be eligible for the tax credit, and how the claims process works. This brief video helps small business owners understand how the ERTC can benefit their organizations when claimed correctly.
The video begins by explaining who may qualify for the ERTC. Businesses that have experienced economic hardship due to COVID-19 such as a 20% or more drop in gross receipts compared to 2019 levels, or have been partially or fully shut down can potentially receive a tax credit equal up to 5.6% of payroll costs up to $28,000 per employee.
The video then explains clearly and concisely each step of the claims process including:
- Reviewing eligibility criteria
- Complete relevant forms
- Gather relevant records and documents
- Calculate total qualified wages
- File Form 941 and use IRS paid preparer authorization form (if necessary)
- Use Form 942 to file Statements with IRS
- Obtain signature from responsible party on behalf of employer/organization after filing Form 941/Form 942
Finally, viewers are provided with helpful resources on where to find even more assistance for their taxes and any questions about the ERTC Claims Process Video are answered.
Benefits of Video
Using a video to explain the Employee Retention Tax Credit (ERTC) Claims Process can be an effective way to communicate this important information to employees. Videos provide employees with a quick and easy way to access information that is easy to follow and understand, which can be especially beneficial if certain concepts are complex or difficult to grasp.
A video explaining the ERTC Claims Process is also beneficial for employers because it can reduce misunderstandings or confusion among employees, decrease time spent answering questions about complex topics, and create better relationships between employers and their workforce by providing them with timely, informative, accurate information. Additionally, videos can be valuable promotional material when used in conjunction with other materials like blog posts or website content.
For employers looking for a more effective way to explain the ERTC Claims Process, a video offers several key benefits:
- Engagement: Videos can make complex topics easier for viewers to understand by presenting visual cues that draw in the audience’s attention and help them stay engaged throughout.
- Familiarity: Videos give viewers an “at-a-glance” understanding of how their tax credit works rather than reading through lengthy text documents that may be hard to comprehend.
- Retention: Since videos are more entertaining than traditional text content, they are better at retaining viewers’ attention and encourage them to share what they have learned with their colleagues in order to spread awareness of the program.
Link to Video
Watch this tutorial video for a step by step guide on how to submit an ERTC (Employee Retention Tax Credit) claim in QuickBooks. The ERTC program was established under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. This video explains the steps that you need to take in order to process an ERTC claim. Additionally, our experts will be available for a Q&A session after the video if you need further help or clarification.
Follow this link to view the comprehensive tutorial: [link]
The ERTC Claims Process Video was developed to give employers an inside look at how to submit a successful ERTC claim. It provides a step-by-step breakdown on how to successfully file for the Employee Retention Tax Credit. The video also offers guidance and advice from tax professionals and other experts on how to maximize the ERTC filing process.
The video has been well-received by employers, who have found it an invaluable resource for navigating their ERTC claims. Whether you're looking to file a simple or complex claim, the ERTC Claims Process Video is available as a go-to resource.
Summary of ERTC Claims Process Video
This video explains the process for claiming the employee retention tax credit (ERTC) established by the Coronavirus Aid, Relief, and Economic Security (CARES) Act for 2020. The ERTC is designed to provide financial incentives to employers who have been affected by coronavirus-related closures or reductions in gross receipts.
In order for employers to claim the ERTC, they must meet certain requirements regarding their eligibility and complete a Form 941-X quarterly adjustment form with the Internal Revenue Service (IRS). The video walks employers through this process in detail, from determining whether they are eligible and calculating their available credit amounts to understanding filing requirements and completing necessary paperwork. In addition, the video provides a helpful summary of key points to remember when completing Form 941-X.
The goal of this video is to help employers efficiently assess their potential tax credits and streamline their claims process so that they can make well-informed decisions about their financial future.
Resources for Further Information
Whether you are a small business trying to make the most of the Employee Retention Tax Credit or an eligible self-employed individual, the goal should be to decide if and how you can use this credit and make a claim quickly.
Fortunately, there are numerous resources available to help you understand ERTC policies and how to make an ERTC claim. This includes IRS materials, Treasury Department guidance, and videos that clearly explain complicated matters in easy-to-understand language.
For more information on topics related to the Employee Retention Tax Credit such as eligibility criteria, rules and regulations, calculation methods, claiming processes and more please visit:
- The official IRS website: https://www.irs.gov/credits-deductions/employers/employee-retention-tax-credit
- The SBA website: https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/employee-retention-credit
- Recently launched official video which provides a comprehensive overview of ERTC procedure: https://www.irs.gov/businesses/small-businesses–self–employed/the–employee–retention–tax–credit
- Webinars hosted by leading tax specialist Accounting Principals covering deciphering recent legislations including federal aid programs: https://go2 TheTaxVoiceliveeventspage
Additionally, since this is a new tax credit with important details yet to be determined by the Internal Revenue Service (IRS), it is important for businesses to stay up to date with changes in legislation governing these credits as they do become available through trusted sources like Treasury departments and pay attention any key court rulings or IRS guidelines related to ERTC claims process that may impact businesses like yours.