Employee Retention Tax Credits for Dental: Still Available
Dental practices can claim $60,000-100,000 in Employee Retention Tax Credits by December 31, 2025, requiring only a few hours of work.
Employee Retention Tax Credits for Dental: Still Available
If you haven't claimed Employee Retention Credits (ERC), you're leaving $5,000-15,000 per employee in unclaimed tax credits on the table. We're talking about $25,000-150,000 for a small practice, with zero operational change required. Here's the uncomfortable part: the window is closing. ERC eligibility expires at the end of 2025. If you don't file by then, you lose it forever. Most practice owners have no idea this credit even exists.
OPERATOR MATH
Let's calculate ERC value for a typical 2-doctor practice with 10 employees (2 dentists, 2 hygienists, 3 assistants, 2 front desk, 1 office manager).
Eligibility check (Q2 2020): 2019 Q2 revenue: $350,000. 2020 Q2 revenue: $85,000 (shutdown from March 15-May 15, limited operations through June). Revenue decline: ($350K - $85K) / $350K = 75.7% decline. Result: You qualify under the 50% decline test.
Eligible quarters for this practice: Q2 2020 (shutdown): All 10 employees, full quarter. Q3 2020 (partial restrictions): All 10 employees, full quarter. Q4 2020 (capacity limits): All 10 employees, full quarter. Q1 2021 (ongoing restrictions): All 10 employees, full quarter. Total: 4 quarters × 10 employees = 40 employee-quarters.
Maximum credit calculation: $5,000 per employee per quarter × 4 quarters × 10 employees = $200,000 maximum. Realistic claim (accounting for wage caps and part-time staff): 8 full-time employees × $5,000 × 4 = $160,000. 2 part-time employees × $3,000 × 4 = $24,000. Total realistic claim: $184,000.
Filing costs: Option A (CPA): $2,500 flat fee. Net refund: $184,000 - $2,500 = $181,500. Option B (ERC specialist, 22% contingency): $184,000 × 0.22 = $40,480 fee. Net refund: $184,000 - $40,480 = $143,520.
Comparison: DIY with CPA saves you $38,000 but takes 4-6 months and requires your team to gather documentation. Specialist costs more but handles everything in 8-12 weeks. For most practices, the CPA route is the better deal if you have an organized bookkeeper. If your records are messy, pay the specialist.
THE TAKEAWAY
Check eligibility in 10 minutes: Pull your QuickBooks/PMS revenue report for Q2 2019 vs Q2 2020. If Q2 2020 revenue is 50%+ lower, you qualify. Don't overthink this - 95% of dental practices hit this threshold during COVID shutdowns. If your state had a lockdown order in 2020, you qualify under Test 2 even if revenue didn't drop 50%.
Gather these documents today: Payroll reports for Q2 2020 through Q1 2021 (total wages paid per employee). Your state's COVID-19 executive orders (Google "[your state] dental office COVID shutdown 2020"). PPP loan forgiveness documentation (if you received PPP). Send this to your CPA or an ERC specialist for a free eligibility assessment. Most will tell you within 48 hours if you qualify and for how much.
File before December 31, 2025: This is a hard deadline. The IRS is processing claims but there's a 6-9 month backlog. If you file in November 2025, you might not see your refund until mid-2026. File NOW to get your money before year-end. Every month you wait is a month your $80K-$180K refund sits with the IRS instead of your bank account.
What to do with the money: Most practices use ERC refunds for: equipment upgrades (CBCT, CAD/CAM), debt paydown (practice loans, student loans), cash reserves (6 months operating expenses), or staff bonuses (retention incentive). This is found money. Don't let it disappear into operating expenses - allocate it strategically.