Employee Retention Tax Credits for Dental: Still Available

The average 2021 dental ERC claim ran $57,843, and if the IRS disallows yours this year, you write that money back with interest while the firm that filed it keeps its fee. That asymmetry is the whole story of the Employee Retention Credit in dentistry, and it's the reason the question "is the ERC still available?" has a different answer than most owners want to hear.

Here's our thesis, and plenty of owners will argue with it: for the overwhelming majority of practices, the ERC was never a missed opportunity, and the only practices with real ERC work left to do in 2026 are the ones who already got paid. If you never filed, you almost certainly never qualified, and the window is shut regardless. If you did file and the money landed, you're carrying a contingent liability that most dental P&Ls don't show anywhere.

What "Still Available" Actually Means in October 2026

Strip out the promoter language and the ERC has two live surfaces left, neither of which involves new money.

The filing windows are closed. The IRS has confirmed that no new ERC claims for the third and fourth quarters of 2021 will be allowed or refunded if they were filed after the January 31, 2024 deadline, and that the agency is barred from refunding such claims at all after July 4, 2025, under the compliance provisions of the One Big Beautiful Bill (IRS FAQs). There is no late-filing path, no hardship exception sitting in a drawer, no "we found a provision your CPA missed." If someone is still cold-calling your front desk about unclaimed ERC money, they are selling a document, not a credit.

What is genuinely new is on the dispute side. As of April 27, 2026, taxpayers whose ERC claims were disallowed and who are running out of the two-year window to sue for a refund can file Form 907 to extend that deadline (IR-2026-58). Read that for what it signals. In 2026, the ERC is a litigation-and-appeals program. The entire remaining administrative apparatus exists to manage fights over money already claimed.

What's still available isn't money. It's time, and only if you ask for it.

Eighty-One Practices, Not Eleven Thousand

The single most useful ERC statistic in dentistry almost never gets quoted, because it kills the pitch. Using data from the Academy of Dental CPAs, covering more than 11,000 practices, there were 81 dental ERC claims for 2020 totaling $2,991,855, an average of $36,936 per practice, and 34 claims for 2021 totaling $1,967,698, an average of $57,843 per practice (ADA News).

Eighty-one out of eleven thousand is under one percent. These were practices advised by CPAs who specialize in dentistry, who understood the credit, and who had every professional incentive to claim it for every client who qualified. Fewer than one in a hundred did.

The reason is arithmetic, not timidity. The gross receipts test required a 50%-plus quarterly revenue decline in 2020, or a 20%-plus decline in 2021, measured against the same quarter of 2019, and dental practices averaged a 17.9% income drop in 2020 (Dental Intel). A practice that was closed in April and May, then slammed with deferred hygiene from June forward, frequently finished 2020 down less than a fifth. That's a bad year. It isn't a 50% quarterly collapse.

Which means the dental practices that claimed large ERC amounts mostly did not get there on revenue. They got there on the partial suspension of operations theory: state and local orders restricted elective care, therefore operations were partially suspended, therefore eligible. That argument is legitimate for some practices and aggressive for many others, and it depends heavily on which orders applied, for how long, and to what portion of the practice's business. It is exactly the theory the IRS has spent the last three years challenging.

What Most Owners Get Wrong: Treating a Funded Claim as a Closed Matter

The mistake isn't failing to claim. The mistake is made by the owner who got a wire in 2022 or 2023 from a claim prepared by a non-dental ERC specialty firm, spent it on a CBCT or a buyout or a build-out, and now treats it as settled history because the money cleared and nobody has called.

The clearing of a refund check is not an audit. It never was. The California Dental Association has warned that the IRS audit statute of limitations on ERC claims runs five years in most cases (CDA), which is well beyond the normal three. Claims filed on 2021 quarters can stay examinable for years yet. A funded 2023 claim is not a finished 2023 claim.

The second group getting this wrong: owners whose general CPA inherited the file. The ERC mill prepared the 941-X, collected its percentage, and in many cases is no longer reachable or no longer in business. The general CPA handles the income tax return and reasonably assumes someone else owned the credit analysis. Nobody owns the substantiation file. Then the letter arrives and the practice discovers there is no written record of which government order supposedly suspended operations, for which quarters, or how the wage base was computed.

Our view: if you can't produce the substantiation memo for your own ERC claim in under ten minutes, you don't have a credit. You have a loan from the Treasury at an interest rate you haven't been told yet.

A $94,779 Credit That Costs $133,638

Work the downside explicitly, because almost nobody does.

Take a practice that claimed both years at the dental averages: $36,936 for 2020 plus $57,843 for 2021 equals $94,779 in credits. The claim came through a contingency-fee firm at 20%, so $18,956 went out the door immediately. Net cash to the practice: $75,823. That money is long gone, into equipment or distributions or debt service.

Now the claim gets disallowed on examination. The practice owes the full $94,779 back, not the $75,823 it actually kept. Add underpayment interest: at roughly 7% annually, that's about $6,635 per year, and three years of accrual runs about $19,904. The contingency fee is not refundable, so add $18,956 back in. Real cash out of pocket beyond the original credit: $38,860. Total cash the practice parts with: $133,638 against a credit of $94,779.

And that excludes penalties, which can apply, and excludes the professional fees to fight it, which for a contested partial-suspension case can run five figures on their own. It also excludes the income tax wrinkle: the credit required reducing your wage deduction for the claim year, so you already paid income tax on money you may now have to return. Confirm that mechanic with your own CPA, because unwinding it means amended returns in both directions.

Against that, consider the upside case. The same claim, upheld, nets $75,823 after the fee. So the spread between a clean claim and a disallowed one is roughly $209,000 of swing on a single filing. We'd hold a reserve at 125% of any ERC still inside its examination window, which on $94,779 is $118,474. Most owners who took ERC money hold nothing.

$26,000 Per Employee Was a Ceiling and Promoters Sold It as a Forecast

Eligible practices could claim payroll credits up to $26,000 per employee (CDA). That number did the heaviest lifting in every pitch deck of 2022. A 12-person practice hears $26,000 per employee and computes $312,000.

The actual dental averages were $36,936 and $57,843. Even combined, that's $94,779 for a practice that qualified in both years, less than a third of the headline on a 12-person team. The ceiling assumed every employee hit the full qualified-wage cap in every eligible quarter, which requires both full-year eligibility and a wage structure most dental teams don't have.

If your claim came in near the per-employee ceiling, that is not evidence of a good preparer. It's the single clearest marker of an aggressive filing, and it is the profile an examiner is built to find.

If a Disallowance Letter Has Landed

The Form 907 option matters most to a narrow group: you got a disallowance, you disagree, and your two-year clock to file a refund suit is close to expiring (IR-2026-58). Extending that deadline buys room to work an administrative appeal without forfeiting the courthouse.

Our call: if your claim rested on a documented, dated government order that actually restricted a measurable share of your production, fight it, and extend the clock rather than let it lapse. If your claim rested on a generic narrative about "COVID restrictions" with no order cited and no production analysis, we wouldn't spend $40,000 in professional fees defending it. Negotiate, pay, and move on. The practices that lose worst here are the ones that litigate a weak file out of pride while interest compounds.

Pull the 941-X File This Week

Find every Form 941-X filed on your behalf for 2020 and 2021, and the substantiation memo that should sit behind each one. If the memo doesn't exist, have a dental-specialist CPA reconstruct it now, while payroll records and the relevant orders are still retrievable. Then put a reserve line on your balance sheet equal to 125% of any credit still inside its examination window, and stop treating that cash as earned. If a disallowance notice is already in hand, calendar the two-year suit deadline today and decide on Form 907 before it's inside 90 days.

We're watching two things. First, whether the IRS escalates dental partial-suspension examinations now that the refund side of the program is formally closed, because the compliance machinery doesn't just stop. Second, whether Form 907 extensions are being granted routinely or used as a filter. If a workable settlement program appears with capped repayment and waived penalties, we'd change our advice on weak claims from "pay and move on" to "wait for the terms." Until then, the ERC is a liability management problem wearing a tax credit costume.

Most practices never qualified for the ERC because their 2020 revenue held up better than the test required. That same resilience is worth measuring directly: if you want to see where your payroll and total overhead sit against practices of your size, run your own numbers through our free overhead calculator. A practice that knows its payroll ratio cold is also a practice that can substantiate a wage base in ten minutes instead of ten weeks.