Employee Retention Credit Conversation

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)

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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.

Source: VERY Frequently Asked Questions About the Expanded Employee Retention Credit : 2021 : Articles : Resources : CLA (CliftonLarsonAllen)

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