Many Health Care Employers May Qualify for the Employee Retention Tax Credit

The Employee Retention Tax Credit (ERTC) is a significant opportunity for many health care providers that have continued to pay wages and health plan expenses to employees through the COVID-19 outbreak.

Eligibility

Health care providers may be eligible for the credit if they’ve:

  • Been prohibited by state or local government orders from performing patient services, such as elective procedures
  • Seen a 50% or greater decline in quarterly gross receipts over the same quarter in 2019

Employers that received loans under the popular Payroll Protection Program (PPP) aren’t eligible for the ERTC unless they return the funds in full by May 14, 2020. However, employers that weren’t able to obtain PPP loans due to the program’s limited funds, or because they had more than 500 employees, should consider whether they’re eligible for the ERTC.

Next Steps

It’s important that employers document their eligibility for the ERTC as well as the calculation of qualified wages.

Additionally, there are several ways to claim the credit, and each employer should consider the best option for their situation. With a maximum refundable credit of $5,000 available per employee, the ERTC may result in significant cash savings for eligible healthcare providers.

To learn more about the ERTC and how to calculate and claim the credit, read our alert.

We’re Here to Help

If you have questions about these credits or would like assistance with claiming them, please contact your Moss Adams professional. We also offer a web-based screening tool, MaxCredits®, which can help you reduce the administrative burden of pursuing credits.

Note on COVID-19

During this unparalleled time, we’re closely monitoring the COVID-19 situation as it evolves so we can provide up-to-date guidance and support to help you combat uncertainty. For regulatory updates, strategies to help cope with subsequent risk, and possible steps to bolster your workforce and organization, please see the following resources: