The Employee Retention Tax Credit- Free Money for your practice?

Natalie Schmook

July 05, 2021

Happy Birthday America! Good and bad, I cannot think of anywhere else I'd rather live. I hope you have safe, fun plans for your day!

There's a topic for practice owners I have been struggling with for the past few months- the Employee Retention Tax Credit. If you haven't heard of it, this credit (also known as the ERC or ERTC) refunds up for 50% of eligible payroll with caps for keeping staff on during government mandated shut downs or reduced capacity. In other words, this can mean $10,000, $20,000 or even $40,000 for some larger practices.

See, most practices qualify for a brief period of time when they kept staff on but were closed due to government shut down orders. I've included a timeline of what an OD's eligibility may have looked like here in Atlanta. They linchpin is what the shut down orders say. I've read many, and frankly, they are unclear as it relates to optometry practices.

JR Armstrong, my go-to CPA at May and Company introduced me to the Tri-Merit group. The have made it their point to be experts on the ERC, and have made some of the grey area situations I've run into a little more clear. Best of all- it's not too late! Practice owners have until 12/31/21 to review and amend their 2020 payroll filings.

Eligibility requirements, clarified:

Shut Down Orders Defined

Shutdown orders aren't just what the governor of a state says. They can come from a mayor, county, or even in certain cases the fire department. For example, in Illinois, the governor explicitly permitted eye care centers to remain open, but that doesn't mean practices don't qualify based on local regulations.

Reduced Capacity

In the event that your practice wasn't completely shut down but was required to reduce the number of patients seen your practice may be able eligible if orders impacted business by 10% in some notable fashion such as revenues or hours worked by staff. This number could be quite large for practices in stricter states.

The ERC and PPP

One trick is that the ERC cannot overlap with PPP funds dedicated to payroll, but to the extent that payroll exceeds PPP coverage, it can be used. PPP uses can also be massaged to conform with PPP guidelines and still create payroll eligible for the ERC.

If you did not apply for the ERC or think you're eligible for more than you put in for, I am holding a webinar with Randy Crabtree at Tri-Merit this Thursday- please join us!

Employee Retention Tax Credit Deep Dive

with Randy Crabtree at Tri-Merit

Thursday, July 8th

8pm EST | 7pm CT | 6pm MT | 5pm PT

Please note, even if you cannot attend, go ahead and register. I will send replays to all registrants after the webinar.

Happy 4th of July and I hope to see you on the 8th or in a replay!

Best,

Natalie

P.S.- Hayes Wealth Advisors works exclusively with Optometric Practice owners to help them build wealth outside their practices through customized, industry-specific planning. We have built planning tools to comprehensively answer the questions that face practice owners in today's environment. Our services are available both on a one-off basis or in the context of a full financial plan. Set up a call if you'd like to learn more about how Hayes Wealth Advisors can help you make the best financial decisions for your practice and family.

Helping ODs Build Wealth Outside Their Practice

Natalie Hayes Schmook, MBA

Certified Financial Planner™

Certified Valuation Analyst™

Certified Exit Planning Advisor

www.hayeswealthadvisors.com

natalie@hayeswealthadvisors.com

(404) 954-1133

Hayes Wealth Advisors provides financial planning through a Comprehensive Personal Wealth Action Plan and long term, customized investment management services. Our goal is to help optometrists to build wealth outside their practice in such a way that they are able to live life to their fullest regardless of market conditions.

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