ERC is a refundable payroll tax credit for wages paid and health coverage provided by an employer whose operations were suspended due to government orders from Covid-19. We are sharing information on Qualification for getting ERC Refunds because many dental offices do not know that they may qualify!
If your company experienced significant reduction in gross receipts, you may be eligible. Dental offices were some of the hardest hit industries. As a company who supports dental offices throughout the United States, Dental Dynamic Staffing wants to continue to help dental offices by providing this valuable information on ERC.
Paperwork can be submitted to claim credits for the cost of keeping employees. This paperwork can be claimed for certain quarters and can be used to offset federal payroll tax deposits, including the employee FICA and income tax withholding.
You might think that you are not eligible because you received a PPP loan. But this is no longer the case. The Relief Act and American Rescue Plan Act now allows you to do both.
So, how do you know if you’re eligible? It’s complicated. Most accountants have not filed an ERC claim and if they have, they might have only filed a couple. This is where expertise is very important. If they file and you are declined, you may have passed up significant money. It’s important to find a company who has filed many times and has a formula for success.
To determine eligibility, we need to compare quarterly results. But first, your company has to have been either fully or partially suspended as a result of the government, limiting commerce, travel or meetings due to Covid-19. For example, many dental offices were closed. In Pennsylvania and Indiana, dental offices were closed longer than dental offices in other states. Most likely, those dental offices will get more money back. That’s because those offices would have experienced a much more significant decline in gross sales during those shut downs.
Depending on your employee count you may or may not be eligible. Large companies with over 500 full time employees. Full time includes only those employees who work over 30 hours per week. Employers can claim ERC for wages paid to employees that were retained even when they were not productive. Smaller companies may claim a credit for all wages paid to employees.
Gross receipts from 2019 are compared to those of 2020 and 2021. Depending on the quarter and lost revenue, certain percentages determine eligibility. Health care benefits paid are also taken into consideration. If you have more than one location, you may have to aggregate gross receipts to determine eligibility.
Because of the change in the law, employers who received PPP loans may now also look into getting ERC credits for 2020 and 2021.
For the purpose of calculations, a “full-time employee” means an employee who, with respect to any calendar month in 2019, worked an average of at least 30 hours per week or 130 hours in the month. This is the same definition used for purposes of the Affordable Care Act. Importantly, aggregation rules apply when determining the number of full-time employees. In general, all entities are considered a single employer if they are a controlled group of corporations, are under common control, or are aggregated for benefit plan purposes.
Companies who claimed PPP can now file for ERC, however, there is no “double dipping.” Wages used to claim the ERC cannot also be counted as “payroll costs.” Therefore, PPP must also be accounted for when calculating the ERC claim.
This is all helpful information for the dental industry. Dental Dynamic Staffing has done research and we have found a company called ERC-Refunds that is working with many dental offices. If you are wondering about your eligibility, they have been very helpful to our clients and are offering free consultations. If they believe you are eligible, they will submit the paperwork and charge a 10% fee based on your refund. It’s a reasonable and low risk way to potentially get more money back for lost revenue due to government shut-downs.
Just like dental offices, those of us who are companies that support dental offices were also negatively impacted by Covid-19 and government regulations. Fortunately, those days have mostly passed, and there are programs like this in place to help keep businesses moving forward. We are happy that we are in a position to share this information and help other companies from the dental industry that might be wondering if they are eligible. As always, we at DDS are here to support our clients and provide valuable information to the dental industry.