Despite most being deemed essential and continuing to operate, many healthcare organizations were severely disrupted by partial shutdowns of in-person services and other COVID-19 restrictions. Hospitals and clinics were required to create new, or expand on existing safety protocols, pivot to offerings like telemedicine, and impose greater restrictions on staff to minimize the spread of COVID-19 among staff and patients.
In response to these hardships, financial assistance was provided to employers impacted by the COVID-19 pandemic through the CARES Act, under which the Employee Retention Credit (ERC) was introduced in 2020. The ERC, sometimes called the employee retention tax credit, can benefit healthcare organizations—even if they didn’t have to close their doors.
Healthcare institutions that qualify for employee retention tax credit include nonprofit and for-profit hospitals, instrumentalities including district or county-owned hospitals or medical centers, and independent medical practices.
Any healthcare facility that faced a greater than 10% restriction on business operations due to COVID-19 executive orders or a 20% or more decline in gross receipts is eligible for ERC funds.
Some specific impacts that lead healthcare facilities to qualify for the ERC include:
To ensure accuracy and adherence to the complex ERC tax code, healthcare organizations should work with firms that are led by CPAs and tax attorneys with significant experience applying the financial and legal tests for ERC eligibility. With the right support, you can ensure your filing captures the total amount for all qualifying quarters and that all supporting documentation has been collected.
If you want to learn how the Employee Retention Credit can benefit your healthcare organization, contact Sagemont Tax. We are an advisory group led by former big firm CPAs and attorneys that exclusively focus on the ERC. In addition, we are proud to be the only ERC provider in the country that has exclusive relationships with tax insurance brokers and providers to facilitate risk-free tax insurance policies.
Written for Colorado Dental Association By Kyle Morabito, Esq., Chief Legal Officer and Managing Director at Sagemont Tax During the…
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Under the updated CARES Act, your business may qualify for Employee Retention Credit, providing you with up to $26,000 per W-2 employee. The ERC program is available even to businesses that accepted a Paycheck Protection Program (PPP) loan. Don’t miss out on this amazing opportunity.
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