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Employee Retention Credit (ERC) Can Provide Relief For Medical, Dental Practice Owners

Negatively Impacted Businesses get up to

$33,000 per Employee

Maximize Credit. Minimize Disruption.

Employee Retention Credit services for employers impacted by COVID-19 maximize benefits and leverage reports fully substantiated for IRS auditing, with little disruption to your business operations. 

The Employee Retention Credit (ERC), in particular, is proving to be an incredible source of relief as medical and dental professionals continue to seek out ways to return to normal and, most importantly, keep their doors open.

What Is The ERC?

The ERC is a refundable payroll tax credit for wages paid and health coverage provided by an eligible employer.  For 2020, this is a business whose operations were either fully or partially suspended due to a COVID-19-related governmental order, or that experienced a 50% decline in revenue in a calendar quarter of 2020 when compared to the same calendar quarter in 2019.

This means that medical and dental practices, even if they didn’t experience the 50 percent decline in revenue, are still likely to qualify for the ERC – as they were ordered to close by “governmental order.”

How Can Medical, Dental Practice Owners Benefit From The ERC?

The ERC, for most practices, pertains to qualified wages PAID during the period of time your practice was ordered to partially or fully close. Furthermore, even after practices were ordered to temporarily close, shareholders and/or non-shareholder doctors, dentists, and other healthcare professionals and highly compensated employees were still receiving a paycheck during this period. Additionally, some practices paid a few key employees to report to work to help with emergency cases, make calls to patients, cover administrative responsibilities, etc.

The ERC can be used by practice owners to offset federal payroll tax deposits, including the employee Federal Insurance Contributions Act (FICA) and income tax withholding components of the employer’s federal payroll tax deposits, or refunded by amending the applicable quarterly Form 941 of 2020. For 2020, Eligible employers may claim a 50% tax credit of up to $5,000 per employee, for the year for qualified wages of $10,000, (qualified wages also include the cost to continue providing health benefits to the employee.)

For 2021, the credit has been changed to a 70% credit, or a maximum of $7,000 per quarter for qualified wages.  And the reduction of calendar quarterly revenues for 2021 is  20% when compared to the same calendar quarter of 2019. 

 

The Bottom Line

It is reassuring to see more opportunities for healthcare practice owners and other businesses to get some relief in the wake of the pandemic. However, the guidelines governing these programs can be complex. That’s why it’s important to partner with a trusted, professional team that can help you navigate the application processes and ensure you have a strategy that allows you to make the most of your funds.

At Dr. Tax Credit, we have established a dedicated PPP and ERC team that is solely focused on helping businesses like yours navigate these government programs and use the funds to strengthen their balance sheets. We also have deep, industry-specific experience working with growth-focused dental practices of all sizes.

If your practice needs a professional partner, and you would like to learn more about how Dr. Tax Credit can help, please contact us here.