Chip Hart & Paulie Vanchiere got together and talked with Thomas Laine, CPA to discuss the ERC and how this program can help Pediatric practices. During the recorded conversation below, they learned about the eligibility requirements for the ERC as well as walked through a few scenarios to show how much practices may be eligible to receive.
ERC Slides 3-6-21.pdf (360.8 KB)
Just finished listening to the webinar. Thank you, full of great information. If a practice qualifies using numbers for Q4 2020 vs Q4 2019, but then doesn’t qualify for Q1 because they got PPP #2 monies, would that be a problem?
Were do we find all the rules that Tom talked about regarding percent ownership?
Here’s some info that may help:
Owners with greater than 50% ownership in a corporation, either directly or by attribution, may not claim the credit for their own wages. Owners who are unrelated may claim the credit against their own wages if they hold 50% or less ownership in the company.
The credit is getting extended as part of the American Rescue Plan Act, the $1.9 trillion relief package just signed by President Biden. Originally scheduled to end on June 30, ERC will continue through year end, giving business owners access to as much as $33,000 per employee in incentives.
Second-half of 2021:
The new law allows businesses to claim the refundable credit against the employer share of employment taxes (including Medicare) equal to as much as $7,000 per full-time employee per quarter during the last half of the year. So, including the existing provisions, business owners this year would qualify for up to $28,000 per employee.
The same eligibility rules apply in the last two quarters of 2021: your company must have experienced a full or partial shut down or at least a 20 percent drop in quarterly gross receipts in 2021.
Source: What You Need to Know About the Employee Retention Credit and Your Taxes | Inc.com
two questions:
Do we file a 941 for each of the two quarters we are comparing to qualify for the ERC?
Is the report of quarterly earnings per employee supposed to be for Q1 2021, Q1 2019, or both? Based on the excel spreadsheet example you gave in the ERC talk, and the numbers you used, I wasn’t sure.
Thanks!
One a regular basis the IRS is issuing guidance on policy interpretations that I don’t keep up with. Our spreadsheet was based on the guidance at that time. There are many nuances to the ERC and their practice tax structure that come into play. My suggestion would be to reach out to your accountant to review. Often times there are way to play with multiple months/quarters in a variety of ways to become eligible, etc.
We submitted our 941 April 1- and requested that the ERC be refunded. NO word from the IRS yet. Does anyone know how long it takes? We use a payroll company- not sure how the money gets back to us? Check in the mail? Sent to the paycheck company to give to us? We send Paychex our money with each payroll and they disperse to the employees and file with the IRS. Anyone know how this refund works? Anyone get money back yet? We also submitted a 7200 for advance credit for quarter two- April 1 as well, but no word back.
Our payroll company ADP assisted in sending an amended 1Q 941 (for a small fee). I was advised that since we already filed the original 1Q 941 that instead of a credit we would receive a check in the mail from the IRS and to expect it to take 10 - 15 weeks (or longer because of their backlog).
I am realizing my PMI user name is listed as PPMA - this is Jill Venskytis, CMM
Bringing back an old topic that I thought no way we would qualify for.
Our accountant connected us with a group in Houston, TX called Alliantgroup. You can see their website at alliantgroup.com. They specialize in getting ERC credits.
Again thinking that we would not qualify, we had not pursued this avenue. They operate on taking a percent of the credit you receive. Since we were not originally going to apply for the credit, we did not think we had anything to lose by letting them help us. They were going to be the ones filling out the forms and getting the documentation organized. Sounds like the tax law has regularly been changing this year on the topic and difficult to keep up with. Also sounds like many more businesses qualify than initially would have thought.
We just received info from them this week with the data we will use to fill out 941-X adjusted employer’s quarterly tax return and claim for refund. We will go through our payroll company to help file.
I don’t know the end result yet, but thought I would bring the topic back up, because this could be worthwhile for many practices. Fingers crossed. Rumor is that it may be another 6 months before we find out the end result after we file.
The filing deadlines appears to be 3 years from the time the original Form 941 was filed.
Curious what other have heard on the topic and if others have filed or plan to file. Did you do it yourself or enlist help from a consultant?
Bill
We just did the same, through a consulting firm in Austin. Our CPA was not helpful.
Files a 941-X and waiting.
Any who filed for the ERC in 2020 and 2021:
Have you received any payments/refunds to date? Filed with our accountants in November 2021 for both 2020 and 2021. I am to understand that that this will take some “months” to process. Nothing to date.
We have not heard anything. I am also wondering how this is refunded? Applied to future taxes or refunded check?
Filed in October/November 2021via accountants for a $. It’s been more than 16 weeks thus far. My understanding from the accountants a refund check to the practice…mailed.
Payment arrived by mail for each quarter that a refund/credit was earned. Just in time to pay taxes due April 18, 2022.
We just heard from the accounting firm that filed for us. 2 quarters have been approved and theoretically checks are going to be sent. Another 3 quarters have been assigned for review. Fingers crossed.