Who's On First

We wanted to tackle several topics today. On first, is an ERC update and our suggestions/thoughts. Second base is regarding the EIDL grant. Third is giving you some frequently asked questions about the new portals for you this year. Last but not least, home plate is COVID vaccine reactions.

First Base = ERC Update New IRS guidance is making it clear that we must file a corporate and personal tax return extension for you if you wish to take advantage of the Employee Retention Credit (ERC). At the moment, the IRS is requiring the credit value be added back to your 2020 taxable income by reducing the tax deduction you would have received for the corresponding wages.  In addition, if you file for the credit, we recommend you err on the side of caution by paying a higher extension amount (which we can calculate), in case the credit is not allowed. As we have discussed in previous Eblasts, the refund may take a long time to reach you if your payroll has to paper file an amended 941. Catch-22, anyone? Please let us know if you wish to use this tax credit so we may file your extension and assist with projecting the taxes you will pay by April 15.   To reiterate, you may qualify for the ERC in the following circumstances: You may qualify for the credit if your income decreased by 50% in any quarter 2020 versus the same quarter 2019. This is the largest credit. We have determined that 36% of the practices who have asked us to perform the calculation are eligible.    A second way is for the “partial suspension of operations” due to government orders. In many states (SC and NC) this is a gray area that is still up for interpretation. Please see the rules below. This partial closure credit is limited to wages you paid on the actual mandated days of closure and is only up to the lesser of 50% of the wages paid or $5,000 per employee. Many of your employees were on unemployment during the closure, and you therefore would NOT be eligible.

Partial Closure ERC If you would like to determine if this partial closure credit (after adding back the wages and paying professionals and your payroll to amend the 941 is available) here is how to review if you qualify: 1.      Review your payroll for wages paid during the closure dates. 2.      Did you pay any employee (not doctor or family) wages?  If not, you are not currently eligible for the credit based on closure. If you did, you will be eligible for 50% of the wages, up to $5,000 per employee. According to the attorneys our ADCPA group consulted with, NC and SC did not have state mandated closure. Dentists in our area followed the ADA and the state Dental Board recommendations. It is unclear if this qualifies (hence, it is a gray area).  If you decide you would like to pursue partial closure credit, we recommend you contact your attorney to determine the closure dates as this aspect of the credit is a legal issue, rather than an accounting. Please let us know as soon as possible if you wish to use this partial closure credit and would like us to file extensions.

Second = EIDL Grants (More $$) Did you receive less than $10,000 when you received the EIDL grant last year? If so, the SBA will send you an email giving you the option to reapply for the additional funds to reach the maximum 10,000.  Happy Valentine’s Day from the SBA! PLEASE NOTE: You cannot apply now, you must wait for the SBA email. But be on the look-out for it.

‌	Third Base = FAQ for the CUAK Portal Click Here for FAQ's

Home Plate=COVID Vaccine Reactions Does an employee who is home sick from a reaction to the COVID vaccination qualify for the COVID tax credit? We recently had a doctor ask us about employees having severe reactions to the COVID vaccination and whether the time off recuperating from the vaccine is considered part of the COVID pay credits. While we have consulted with our HR consultant, we are not legal or HR experts so please be advised!

Our interpretation (based on current law for tax credits): because the staff member does not have to quarantine, the time off would be treated as an illness and PTO or sick leave should be taken, OR you may choose to pay them for the time off. Remember, whatever you decide should apply to all staff. No favorites. Our best recommendation is to have your staff get their vaccinations on Friday!