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[Music] this video today is on how employers can get two credits related to Co in nineteen I want it now and in its this is real important a small business employer I'm gonna show you today a way that you can get an advance payment for the credit related to the employee retention credit the qualified sick leave pay and also for the expanded Family and Medical Leave Act in the prior video I said what is form 7200 and kind of how it works I went through the instructions today with now updated through April 10th I'm gonna now do a live example and show you how that we can use form 7200 and we look here at form 7200 just as a refresher it's an advanced payment on an employer credit do to go with 19 for saying as a quick overview this is a new form they're still we're still getting updates and inputs but most important thing for this normally in order to get credits on payroll as an employer you have to wait till the end of the quarter or at the end of the year in this case I'm gonna show you how that even at the end of every single payroll you may want to do a 7200 in my example today I'm gonna show you what might happen in the real world with a biweekly payroll employer could be one employee it could be as long as it's under 502 to comply with that I need to set it up so what I'm going to do today in this example is we're going to have an employer that paid on April 10th and they're then going to pay again on April 24th what I'm gonna do today is I'm gonna find a form 7200 for the payroll period ending April 10th and when we get done with that form we'll be able to fax it in then whenever we get two weeks from now to April 24th we're gonna do another 7200 in this session and then send it in so I'm literally going to walk you through a live employer you and I together so as we do this I also have to say that when we get to the number you know what what is the employer retention credit we're gonna make an assumption my number is already been calculated what is the you know payroll deposit that's already a given and then we're gonna work that through and again number one we're gonna do payroll period for 10 with a 7200 I'm gonna show you how you have to accumulate those numbers on the second for two we form two weeks from now in this 7200 and then we'll file it then I'm gonna come back and change one factor and redo the payroll period for 410 and 420 for what I'm gonna do there is I'm gonna add a second credit let's go and I've assumed that you watched the videos on employer retention credit I assume that you've already watched the one on qualified sick leave and on the extended family and medical pay that's how you keep track of your payroll and do the numbers alright let's get started looking here at form 7200 the advanced payment of employer credit due to Co in nineteenth what's gonna happen is this information here is for the most part you can fill that out but the important thing I want to stop is right here see what happens is we have three quarters notice there is not quarter number one and if you do the reading on the advanced credit dealing with the employer retention credit it started on March 13th I got some inquiries on what do I do with the fact that the form 7200 does not have a first quarter but yet I've got this credit that started in March what happens is is I'm gonna show you on this form how we're going to include that here now normally if you don't file a 7200 any credit related to March 13 through the 31st will end up on your nine forty one and for today's discussion let's assume you're doing a nineteen forty one report all the 940s qualify for this but let's assume we're done in 1941 so if we don't I'm gonna turn this over if we don't do a 7200 what will happen is we'll get this credit on our second pay report for any employment that's qualified wages for the employer attention cred from March 13th but let's go back to the program if I now look at part one it says check the box for the employment tax form that you're going to file so today I'm going to check box number one it's a 1940 lying be a part 1 it says is this a new business on January 1st and right now for this I must say no it says if you say yes though then you should skip C but the important thing here you only skip see if you have not filed so it says unless you've already filed a 940 and again for today 941 here's why when we fax this 7200 in what they're going to do is they're going to see and refer back to your most recent 941 your new business but you filed first quarter then you're going to go ahead and not skip because you now have a 940 out there and that's the reason for this question then part one line C is the amount reported on line two of the most recent filed 941 as you know you the employer or whoever does your payroll knows that line 2 is gross wages so we'll put a number X in here and then it says part 1 lining D we're gonna put in number of employees when I put in X for the number of employees at this point in time pretty straightforward but what we now gonna move into is how to get this credit now so with that what I've kind of do we're going to go to part 2 but for part 2 what I've done is kind of enlarged this one so it's better seen on the string and number 2 is I have a bigger box to write in so as I said in the introduction for right now make an assumption that what I put on here is qualified wages qualified credits etc so here's what I do an example number 1 so this is 4 for 10 of 20 now as we start down through part 2 we're now going to have to go back to our payroll records and at this point in time in reading all the inch what's going on and we have to retain these records as we did in a prior video informed you we have to save these records for four years so here's what I want to say when in doubt document document doctor stainless do let's look at part 2 line 1 looking here it says toll employee retention credit so that's the credit that a lot of times refer to the e rc and in our given for this period it says the credit well I'm gonna have a given of $5,000 now lying to is well it's the the question is what is our qualified sick leave wages eligible for the credit in this quarter and I think I'm going to stop here because line 1 also says for this quarter lying 2 says for this quarter so right now this is our first pay period because we're on April 10th there's a bi-weekly so this is our first pay period in April we could have some in this case here we could have some employee retention credit available from March so we would include that on line 1 but then on LY - what's qualified sick leave wages and right now let's go and look look at the next line total qualified family leave wages and then when we get down here to line 4 we're gonna add them up I don't know I've ever seen more adding credits and wages together little confusing and that's why I said it's in this presentation I'm actually going to have how these three come about but for the calculation right now the sick leave wages see there we get a hundred percent of the qualified wages for the family leave we get a hundred percent of the qualified wages whereas on line one for the employee retention credit we get we get 50 percent of qualified wages so on this line it's 50 percent of wages that are qualified on this line it's a hundred percent of wages qualified and here is a hundred percent so that's the reason why on line 1 we have a credit it 50% of qualified wages line two is a hundred percent credit of qualified wages line three is a hundred percent of qualified wages now stay tuned some of you may say at this point time was those other numbers the 2:13 etc we'll cover that in the summary at the end so for this example as I said in the beginning let's just do one credit because I want to show you how this accumulates every time we file a 7200 and remember we can file as many 7200 as we want to but if one of them's wrong we cannot amend it it will be reconciled at the end of the quarter on the 1941 and that's that's another question I've gotten some of my prior videos so now what we're going to do looking back here at the forum we're going to add it up so we got lying to a zero nine three zero and line four is $5,000 so the next thing we're going to do blind five the total amount by which you already reduce your federal employment taxes in this case in this payroll period the first period we had a total liability of 3500 so we put the 3500 in here it says total advanced credit requested on previous filings again the reason why I picked April the 10th and doing it by weekly as a fact there's been no pay period in April so the answer to line 6 is zero because we've not previously asked for anything so then we go to line seven and it says what add five and six 3,500 so that's the amount we're telling the IRS when we get to the end of the quarter on the 941 that we want instead of making a deposit to our payroll what we want to do is we want to take this credit line eight advanced request subtract line seven from line four if zero or less do not fill it out this is only get that advanced credit in our case line eight is $1,500 at this point in time we're ready to go back over to the form but before we switch over the form for a second I want to recap part two so what we've done is we've said we had qualified credit qualified wages of $5,000 we had a payroll liability of 30 five hundred so we would like to have this $1,500 back and what we're going to find out we're going to fax this form in now at this point in time matter of fact just for I started as presentation I've select on irs.gov I looked through some of the software tax software research material have and stay tuned but it appears to be there assuming that this refund will be through the normal channels through through your bank account in some cases it may be by email stay tuned it's one of those places where I guess I should say subscribe to our channel because when it updates then you'll be able to get a notice on that so again we're going to get that $1,500 credit and I'm now going to pull the 70-200 back over here and the reason why is that we've completed part two we're asking again for $1,500 and in that somebody's going to sign it and down here we're going to fax in at this fax number the report we just did we are now done with payroll April 10th and we want $1,500 see this is to get the money now so it can help us with payroll let's go a two weeks in advance from now and we're now going to go to a payroll period of April 24th now please this one here you got to stay with me because what I'm going to do is on this form and I'm doing this for example purposes but we're going to go to 420 420 I'm gonna put on here do not file don't file this but for for this period what we ended up with is we're going to have an employee retention credit in this period and if we look here at the form line one $7,000 and doing that and I'm just making a memo of this what happens is is I also what's the other factor I need I need what our employee or liability is and in this case for week for this two-week period is $4,000 this is the numbers we have from our payroll information for the pay period ending for or 24 stay with me I think you'll see why I did this so what I'm now gonna do is slide this form over and I'm going to take the form we just did and lay it right beside it and then underneath it so now what I'm going to do I'm gonna say this is formed 420 420 so what the instructions say is that again I can file this as many times as I want to it's not required to file it and in our first pay period over here we saw with we had 1,500 positive if line 8 is 0 or negative do not file the form so we've but we facts add in two weeks ago here is our current pay period so what it says it's that it's the accumulation of and this is how they're going to track us so now is that on this report what is our year to our why should say what's our quarter to date credits or available well our quarter to date is the 5000 plus the 7000 or we're gonna have here 12,000 okay we have zero on our sick leave wages so we got zero this period so that's gonna be zero over here I should put in a zero here to make that 12,000 let's go to line three qualified family leave wages in our first pay period we had zero in this pay period we have zero qualified wages so that's going to be zero so now what we're going to do is we're going to total that number that is 12,000 and if we look at our line five remember that that's the amount by which we've already reduced it so in the first two pay period we asked for 3,500 in the pay period for the two weeks ending April 24th we're asking for four serve total here is $7,500 now this is a new line and that is line 6 total advance credits requested on previous filings well if I look back on my previous filing here I asked for $1,500 so I'm going to take that 1,500 off line eight and I'm gonna put it here on this second 7,200 of 1,500 so at this point in time I'm done with references to the old 7200 I'm ready to come back to here so up to now we've said review part two line one it's what was our employee retention credit for the quarter we've now are up to 12,000 we did not have any of the other two credits so we can get advance payments on on Form 7200 so line four is $12,000 again line five that has been from our two pay periods are total quarterly again this is all based on quarter that we've asked them to reduce our federal taxes based on having employee credits previously we've asked for 1500 so what that does is that gives us a total on line seven the total of line five and six of $9,000 now what we're gonna do line eight the advanced request we're gonna say line 7 from line four are in this pay period we're gonna ask for $3,000 as you can see here to step back here is the report we did on 10-4 we had 5,000 qualified in credit 3500 we're asking them to use of the five for a $1,500 refund so then we go to we we had the period of the new qualifying for the year or for the pay period and we're gonna add that to what is again everyone who signs quarter quarter quarter say we keep filing 7200 as many times as we want to during the quarter but once we get at the end of the quarter then what's going to happen is is we're gonna file a 941 report for for you the employer and at that point in time when we get into July we're gonna start over so this is quarter by quarter in this case what's going to happen is is again we're gonna ask for three thousand dollars if we would go out here to the next pay period what we do is do the exact same thing as we've done again I've taken you through two pay periods I've showed you how to accumulate it you fax the one in on on for ten on for 24 you can fax this one in for your additional credit in the introduction I mentioned that we were going to be doing another set of 72 hundreds but I want to take the same facts the same employer you the employer we want to add one more credit now in or given I'm gonna write in and again we started at this here's payroll period for for 10 of 20 we're gonna file this report we're going to fax it in the prior one in the first quarter we had here on line one total employee retention credit I'll put the same thing as we had an example one of five thousand dollars but here's the only variable difference if we look at line - it says qualified sick leave wages eligible for the credit so again wages in this period we had a thousand to point out why line one is a credit as I explained an example 1 and I 2 and 3 as wages is in line 1 the employee retention credit is based on 50% of qualified wages in line 2 and line 3 it's based on a hundred percent dollar-for-dollar of qualified wages like I mentioned before very unusual to be adding credits and wages to get to a number but we're gonna do that then line 3 total family leave wages is zero line four what's the total of line 1 2 & 3 it's $6,000 so now we have another thousand dollars available for credit line 5 that was in our given an example 1 I marked this example number 2 so in line 5 what we our liability we're gonna leave it the same as in example 1 $3,500 line 6 advanced credit requested on previous filing because this is our first payroll in April we wouldn't have asked for anything in the prior so that's going to be a total of zero and then on line seven if we look there what we're gonna do on line seven we're going to add five and six together for $3500 lang-8 is the advance request it's going to be the difference in line 7 and for our 2500 so this is going to be the credit we're going to fax in and request and we like I said we can do this immediately remember in example 1 it was $1,500 so there shows you this additional thousand ends up in increasing our request so now let's go to pay period number 2 as I did in in example 1 I'm going to say do not file and this is pay period for 2420 numbers and what was in our old set of numbers was we had I believe the employee retention credit was $7,000 an example one also an example one we had a payroll liability in the this pay period of $4,000 so as we did in the prior one I'm gonna put these two together and what we're gonna end up with I must slide this under here so we're gonna end up with we're gonna take the 5 from the first refundable credit form 7200 it would requested we're gonna add because it's quarter to date we're add the 5 to the 7 and we're gonna get $12,000 then we're going to come back and look we had a thousand and we have 0 so year-to-date we have a thousand line three there's been zero in this pay period we were zero so we're gonna have zero here so now line four and I'm going to remove this well I better not let's go into this line for $13,000 line five is a total amount we've already reduced our federal tax says bye so in the first period we did 3,500 Plus now we're going to do 4,000 and in doing that we've got a total of 7500 line six it says the advanced credit we had done on previous filings if I look at previous filings we requested $2,500 so I'm gonna put $2,500 here let's look wait in reform again we from that from the periods in this quarter we've now offset our our $13,000 credit by 7,500 plus we had a prior advanced credit of 2500 off our prior 7200 so now we're going to have a total of $10,000 our advanced request now is going to be the difference in four and seven or $3,000 now let's see our proof because what happened was fine finally sheet here our credit for the second period and I should label this for twenty four twenty this is a example two and this is example one my point here is we asked for this additional thousand dollars for our sick leave pay that was refunded to us on the first seventy two hundred but we had to pull all the numbers forward quarter today and that's why all these keeps saying quarter but if you notice is for this pay period we got the same credit reef onion so County in summary of example one and two example one I tried to show you we took one credit and put it in multi pay periods so each pay period we had that credit and that was the employee retention credit then why I did an example to as I learned I guess in cooking if you got a pot of chili you don't if the seasoning doesn't taste just right you don't add three or four different seasonings you change it by one to see the outcome and so that's what we did here today was in the first pay period we had that thousand dollar sick leave wage we put that in there we got that credit benefit it went from 1,500 to 2,500 in form 7,200 in that pay period two weeks later we file another form and in that case we had the exact same information in pay period number two and our requested advance credit was the same I think that's counting a recap of a file on the form now the one last thing that I did promise you when I started this video was the fact of in reading instructions and stay tuned again there's a rant put out some more instructions for what's happening but this is based on current instructions and the other thing if is that if you go online for the 941 right now you will not find it in place on the first quarter 1941 where it says that you can put this credit and that's why I was getting questions on my prior video was the fact of how what do I do with this you know employee retention credit when it started on March 13th what I've done here for you is I've done a recap of the instructions and tried to help explain it now that you've actually seen the numbers so form 7200 an instruction explain the numbers accumulate per quarter we saw that an example one an example to going down the the left side of the column form 7,200 part two so we're going to enter a credit well line one was the employee retention credit how do we get that number if it starts again in March 13th but if we're under a hundred full-time employees you count all employees whether they're for load whether they're providing services etc if they're over a hundred but under 500 then there's certain limits generally the full-time employees that are working you won't qualify for that but again I tried to summarize this why are we getting the credit we're trying to keep our employees the purpose againt is to retain where we are either fully or partly shut down so whenever government a governor says okay you know restaurants you can have carry-outs well that is partially shut down or if you are not in an area that government has either fully or partially you down it's in any quarter that your sales are down by 50% per quarter again sales 50% recorder and you look at 2019 and compare to see how do I get the refund well you normally are going to get it on your 940 something but if you want an advanced credit as we did in this video then what happens is you're gonna do it on form 7,200 what's qualifying wages is 50% of qualifying wages paid in that quarter and then the lemon it's limited to 10,000 in qualified wages or a credit of $5,000 per employee per year so that's line one let's go to line two form 7,200 part two and we've got qualified sick leave wages there well that started as you can see here that started on April the 1st also I might no note that you include health insurance and the employers share of the Medicare taxes the credit is for emergency paid sick leave I did a earlier video you probably looked below for a link to that matter of fact I did one for employee retention credit I did one for qualified sick leave did one for family leave but let's continue on down it's because they're unable to work related to koban 19 again you still get it on your 940s or as we did today you would get this on the 7200 after a paper and it's a hundred percent of qualified wages and it's limited to 80 hours again I'm not going to go through every one of these qualified wages here is a hundred percent of the quarantine order doctor seeking Diagnostics or it's two thirds of the qualified wages for carrying somebody that has the virus that's why I said in looking at lying to on part to form 7200 where it says wages is because it's 100% qualified wages here it's two-thirds but whatever number you come up with is actually for the form qualified wages the limit here I've got the limits here is if it's during the 80 hour period - 511 dollars a day or 10 days which would total up to 80 hours or 5110 per employee per year qualified wages limit on 80 hours would be 2,000 per employee per year again I don't want to get too far down deep in it but this is a really good recap line three the qualified family leave wages start April the 1st and they include also health insurance and Medicare taxes it's the emergency Family and Medical Leave expansion act related to code 19 same forms and here it's two thirds of qualified wages caring for the child the child has to be under the age of 18 the limit here is $200 a day for two weeks or a total of $10,000 total per employee per year a reminder as we saw in my overview video that you can see the link below you cannot W ducked in word that we get that you can't double e for example if you use payroll under the employee retention on line one you then cannot use it on line two or three it would not qualify or if you use employee retention credit if you're looking at the paycheck payroll program or paycheck protection program you can't use it over there so again please go to the video in the comparison of the employee retention credit versus the payroll or the paycheck protection program I hope this has helped you through and navigate and our office we already have people that are applying for this credit in advance again this whole video was how to get my money now I want to thank you future updates I can tell you like for example there's some over here and in the employee retention credit I think we're going to see some more guidance there so if you'd like to subscribe so we can update you as this progresses forward I hope to do so and I hope to see in the future thank you [Music]