If you’re not aware, if you retained your employees during the pandemic and your business meets certain criteria, the U.S. Congress passed a bill that enables you to have a portion of the wages you paid to your employees between March 13, 2020, and September 30, 2021, returned to you. This is the case even if you received a Paycheck Protection Program (PPP) loan.
The Employee Retention Credit (ERC) is a refundable tax credit that was introduced as part of the CARES Act in March 2020 to help businesses retain their employees during the COVID-19 pandemic.
What are the eligibility criteria?
Businesses that were fully or partially suspended due to government orders may be eligible for the credit. (Dental practices were limited to emergency or urgent dental care from March 22, 2020, to April 30, 2020, by executive order from Governor Greg Abbott.)
Additionally, businesses that experienced a significant decline in gross receipts may also be eligible. To qualify, a business must have experienced a decline of more than 50% in gross receipts for a calendar quarter compared to the same quarter in the previous year.
More details are available on the TDA Perks Program website. There are also several online resources about you can refer to; including the IRS website, Journal of Accountancy, Investopedia, and the U.S. Treasury Department.
When is the deadline for filing for a refund?
According to the IRS website, “Generally, for 2020 tax periods, the deadline is April 15, 2024. For 2021 tax periods, the deadline is April 15, 2025.”
I.e., April 2024 is the latest you can file to maximize the potential credit to your practice. However, as with the PPP, once the funds are gone, they are gone.
A TDA Perks Program is helping your peers obtain this refund.
Because the ERC is complicated and the requirements have changed over time, you may have heard different things that make you think your practice won’t qualify.
While the eligibility criteria for the ERC may seem straightforward, the application process can be complex. Additionally, the IRS stated it will be closely scrutinizing ERC claims and that businesses that make false or inaccurate claims could be subject to penalties or even criminal charges.
This is a key reason TDA Perks Program partnered with ERC Specialists, a specialty payroll company exclusively dedicated to simplifying the process of filing for and maximizing the credit.
Many ERC Specialists clients were referred to the company by their CPA firms because of its expertise in navigating the CARES Act. ERC Specialists’ team of CPAs, certified payroll providers (CPPs), and tax lawyers oversee their clients’ credits to ensure they are staying within the program’s guidelines.
There is no fee to work with ERC Specialists. After your refund check is mailed to you from the Treasury, ERC Specialists will invoice you for 15% of the amount paid.
As of early August, more than $18 million collectively has been paid or is scheduled to be refunded to 294 participating TDA members.