At first glance…
It would seem like 2020 and 2021 would be top-dollar years for medical practices. Yet, despite our collective focus on the medical space, not all areas of healthcare experienced growth. In fact, many “nonessential” yet still vital medical services were halted or forced to alter their businesses because of Covid. Elective procedures were cancelled, and many appointments shifted into a virtual space. Many optometrists and ophthalmologists agree that it was nearly impossible to perform exams and appointments over Zoom or WebEx during 2020. If your vision practice was impacted, there may be resources available to help.
Optometrists, Ophthalmologists and the ERC…
One key resource for vision practices is the Employee Retention Tax Credit or ERC. We recently helped an Optometry office (O-Office 1.) capture over $61,000 in Employee Retention Credits. They have eleven people on payroll including ownership and principal optometrists. Like many businesses they were impacted by both federal and state shutdown mandates in Q2 of 2020. In Q1 of 2021, they saw a decline in gross receipts of 20% as compared to Q1 of 2019, and thus qualified for that quarter as well.
We helped another Optometry client (O-Office 2.) They have twenty people on payroll between two different locations under the same ownership. All employees were kept on payroll during shutdowns. They qualified for Q1, 2, and 3 of 2020 for a total credit amount over $55,000. While they have only qualified for Q1 of 2021 thus far, their total credits for 2021 amounted to nearly $78,000. This demonstrates the increased value of 2021’s quarter by quarter calculation method, and the expansion of the max dollar amount per employee from $5,000 in 2020 to $7,000 per quarter in 2021.
Optometry ERC Success Stories
Client | Employees | PPP Loans Received | Shutdown at some point in 2020? | Decrease in receipts in 2021? | Total Credits Claimed |
Optometry Office 1 | 11 | Round 1 & 2 | Yes & temporary inability to perform elective procedures | Yes – compared to Q1 2019 | $61,957 |
Optometry Office 2 | 20 | Round 1 & 2 | Yes & temporary inability to perform elective procedures | Yes – compared to Q1 2019 | $132,955 |
So You Got a PPP Loan…
Both O-Office 1 and O-Office 2 initially didn’t think they qualified for the ERC because they each got two rounds of PPP loans. Under the recently expanded American Rescue Plan, businesses that took PPP loans may now qualify for the ERC. So, even though both Optometry offices received PPP loans, we were able to look at the impacted periods before and after the loans went into effect and find them significant credits.
What Now…
Every vision practice is different, but we frequently see stories like this. From this experience we know that there are many unclaimed dollars out there for businesses to capture. With our expertise and tailored process, we determine whether you’re eligible, calculate the tax credits available to you, substantiate the claim and defend you under audit if the IRS ever questions your claim. Find out more about the ERC and whether it might be right for you here, or give us a call at 833-3INCENT.