Despite the recent expansion of stimulus relief dollars available to dental practice owners, early surveys suggest thousands of dental practices have no plans to claim refund checks of up to $33,000 per employee.
The American Rescue Plan Act of 2021 was signed into law by President Biden on March 11, 2021, and ushered in a great expansion of the Employee Retention Tax Credits first introduced by the CARES Act in April 2020.
Previously, employers were forced to choose between forgivable loans through the Payroll Protection Program (PPP) or Employee Retention Tax Credits (ERTC) claimed through employment tax filings with the Internal Revenue Service.
With the sweeping legislation, employers can now receive PPP loans and also claim ERTC refunds.
However, the complexity of the ERTC computation and the need for sufficient audit documentation has kept many practice owners from pursuing these refund checks.
The ClearSmileNetwork is proud to support practice owners through its recent partnership with JWC ERTC Advisory CPA, a national CPA firm specializing in maximizing these employee retention credits.
“Practice owners keep telling us they don’t qualify because they took PPP funds, but that’s simply not true anymore. That was true in 2020, but is no longer the case in 2021,” said Jace Campbell, founder of JWC Employee Retention Tax Credit Advisory CPA, LLC. “We’re excited to partner with the ClearSmileNetwork to get more cash back to these practice owners who sacrificed so much this past year while keeping their employees paid. And just as importantly, to support them as a key industry in this economic recovery.”
The maximum claim per employee in 2020 continues to be $5,000, but has been expanded to $7,000 per quarter in 2021, which could accumulate to $33,000 per employee over the entire two year period.
The legislation disallows the employers to pay employees with PPP funds and to then claim those same dollars as qualifying wages under the ERTC tax code. Luckily, with a sound methodology and attention to detail, this issue can often be avoided.
“It has become evident as to why most payroll services are steering clear of this. To maximize the refund you’ve got to allocate PPP dollars and ERTC claims on a per-employee basis every day,” explained Mr. Campbell. “We’re documenting how certain hours of the day are paid with PPP money and other hours of the day are included in qualifying ERTC wages.”
For employers executing this exercise themselves, it should be noted that qualifying wages are defined differently by the Payroll Protection Program (administered by the Small Business Administration) and the ERTC rules (as defined by the Internal Revenue Service).
Additionally, the expanded legislation introduced new eligibility for practices with more than 100 employees, which could benefit smaller DSO’s who aggregate under IRS aggregation rules.
Bankers who were previously incentivized to originate PPP loans don’t have any connection with this program supported by the Internal Revenue Service.
Outsourced payroll service providers generally don’t have the bandwidth to become experts in this new legislation and develop the supporting audit documentation. Furthermore, most of these third-party professional organizations do not have the appetite for risk resulting from a rather complex tax credit.
While practice owners can certainly compute these credits and build the audit documentation on their own, the ClearSmileNetwork recommends their clients to work with JWC Advisory CPA. Not only are they solely focused on ERTC, which means the process is simple and quick for the practice owner, but they also work on contingent fees that don’t cost the practice owner anything out of pocket.
A list of frequently asked questions and an ERTC Calculator can be found online at https://DentalStimulus.com.
Release ID: 89008183