Retention Credit combined with PPP Loans
The COVID-19 shutdowns presented a unique challenge for dental practices. Thankfully congress acted quickly and dental practices were able to take advantage of the PPP loans. During the PPP fiasco, the congress also laid out the opportunities to use the Employee Retention Credit (ERC). However you had to pick one or the other. On Dec 27th 2020 the Consolidated Appropriations Act was signed into law. This law allowed you to qualify for the ERC even if you received the PPP Loan. This presented a unique opportunity for dental practices.
Unique Opportunity for Dental Practices and Dentists working as Independent Contractors with S Corporations.
Dental offices across the country were limited to emergency only procedures for part of March 2020 and most of April 2020. Due to this restriction imposed by state governors, they qualify for the ERC tax credit, for wages paid to themselves or their employees during this time period. For many dental practices and for dentists practicing as independent contractors through their S Corporations that paid themselves a wage in March 2020.
This tax credit can be several thousand to 10 thousand maybe even 15 thousand dollars for larger practices. The process to get the tax credit is a bit complicated as amended 2020 payroll returns need to be filed, along with possible amendments to business and personal returns for 2020.
Be sure to speak to your Dental CPA about their strategy to maximize this tax credit!