Congress created the Employee Retention Credit (ERC) to encourage dental practices and other employers to keep their staff on their payroll, even if they were fully or partially shut down by government orders during the COVID-19 pandemic. For those practices that qualified*, the ERC payroll tax credit was equal to 50% of the first $10,000 of an employee’s wages in 2020, with a maximum credit of $5,000 for each staffer that year. In 2021, the credit was increased to 70% of the first $10,000 of wages per employee, per quarter, for the first three quarters of the year, providing a maximum credit of $21,000 per employee.

Although this credit expired on December 31, 2021, businesses could still file amended payroll tax returns until April 15, 2024, for the 2020 year and April 15, 2025, for the 2021 year to claim it. If you haven’t filed a claim for the ERC credit for 2021, but believe you’re eligible, you need to act quickly before it’s too late. The House of Representatives voted to end the filing period for the 2021 credit as of January 31, 2024, but that legislation has yet to pass the Senate and become law. The IRS is urging Congress to pass this legislation to prevent any additional claims and “stop the bleeding” from what has become the largest tax fraud in U.S. history.