17 NOVEMBER 2021 WorldWide Drilling Resource® Drilling Into Money Not Boring by Mark E. Battersby Uncle’s Fast-Expiring Helping Hand with Payroll Costs Fortunately, many drilling businesses are finding their efforts to offer higher pay and more benefits are helped by one of Uncle Sam’s often overlooked tax breaks. Thanks to the unique Employee Retention Credit (ERC), for example, many employers can get money back from the government through a credit against their payroll taxes. Geared toward small and midsize businesses, the ERC is designed to encourage businesses to keep employees on their payroll. In addition to having 500 or fewer employees, an employer’s eligibility is based on having gross receipts of less than 70% (versus the earlier 50% amount) compared to the same quarter in 2019. Thus, any drilling operation’s gross receipts that declined more than 30% in 2021, may be eligible for the credit. The credit remains at 70% of qualified wages up to a $10,000 limit per quarter producing a maximum of $7000 per employee per quarter - up to $28,000 per year for each employee. If the amount of the employer’s credit is more than its share of those payroll taxes owed for a given quarter, the excess will be refunded. A drilling operation can also claim this credit even if it is getting (or has already gotten) money from the Payroll Protection Program provided, of course, the same wages aren’t used in both the credit and forgiveness calculations. To qualify in the fourth quarter of 2021, the rules remain essentially the same as earlier. Eligible employers will report their total qualified wages and the related health insurance costs for each quarter on their employment tax returns (generally, Form 941) for the applicable quarter. If a reduction in the drilling operation’s employment tax deposits is not sufficient to cover the credit, some employers may receive an advance payment from the Internal Revenue Service by submitting Form 7200, Advance Payment of Employer Credits Due to COVID-19. In addition to expiring on January 1, 2022, wages paid to owners of either S Corporations or a regular corporation don’t count. That’s right, the ERC is not available for wages paid to a majority owner or such owner’s spouse - unless the majority owner has no brother or sister (whether by whole or half blood), ancestor, or lineal descendant, in which case wages paid that owner or owner’s spouse will qualify for the ERC. Mark Mark E. Battersby may be contacted via e-mail to firstname.lastname@example.org The Original PUMP PULLER New and Improved In Production Since 1973 • Portable • Lightweight • Economical Funk Manufacturing Inc. UP-Z-DAZY PUMP PULLER Shippensburg, PA 17257 Shop: 717-477-5248 Sales & Support Dwayne: 717-360-3764 Technical Support & Repairs E-mail: email@example.com www.funkmanufacturinginc.com • Welded 3/16” aluminum frame is CNC water-jet cut with folded edges, fewer welded corners and flat bars. This makes a stronger 1-piece unit. • Includes 7” adjustable legs. • Attachment Options Available. • Wheel kit w/handles, winch, swing vise, overhead guide, tool tray, telescoping pole, remote control, and 30” adjustable legs. Made in the USA by the Lester Funk family. See more events at www.worldwidedrillingresource.com online issue. Are you planning to go? WorldWide will be looking for you! December 14-16, 2021 ~ Join the WWDR Team in Nashville, Tennessee, for Groundwater Week - Booth #1152.