By: Carmen George, CPA- Director, Health Care Services
We have written about the Employee Retention Credit (ERC) in previous blogs. However, there have been expansions to the ERC that we wanted to make sure were passed along. This refundable payroll tax credit was designed to encourage employers to keep employees on the payroll even if they weren’t working due to the COVID-19 pandemic. You may think that you don’t qualify because you were deemed an essential business by government authorities. However, many medical, dental and veterinary practices could qualify for the credit even if you didn’t experience the required decline in revenue to be eligible. I urge you to take a look at the ERC. This relief isn’t just designed for retail, restaurants, and other types of businesses. It is also designed for healthcare entities. In Ohio, a mandate ordered medical practices to delay non-essential surgeries and medical procedures. This mandate was in place from March 19, 2020, through April 30, 2020. There is a high possibility that your practice will qualify for the ERC for that period that you were ordered to shut down in 2020. There are some coordination nuances to be considered, so contacting a professional that can provide assistance to see if your medical, dental or veterinary practice qualifies for the ERC is highly recommended. With two decades of experience working with medical practice owners, I am confident I could quickly evaluate your situation and determine if you would qualify for the ERC. Reach out to me today.
Here are some of the key points that outline eligibility and potential credit amounts:
- For 2020, you could earn up to $5,000 for each full-time equivalent employee that you employed from March 13, 2020, to December 31, 2020. You could earn up to $14,000 for each full-time equivalent employee employed from January 1, 2021, to June 30, 2021.
- If you were ordered to fully or partially shut down, you may qualify for the credit. In Ohio, there were no mandates to shut down in 2021, so you would need to review the revenue reduction portion of the eligibility rules.
- If your gross receipts fell below 50% of the same quarter in 2019 for 2020 or below 80% for 2021, you may be eligible.