Can the ERTC Help Employees Struggling With Substance Abuse?

December 28, 2023
Dayes Law Firm

For many businesses, the ERTC benefit is a financial windfall. Some business owners wonder what to do with the money once they receive it. Purchase new equipment? Launch a dream project?

Investing ERTC benefits in employees is one option that can pay off in the long run. If people are your company’s greatest asset, it makes sense to expand your benefits program, which can include helping workers who struggle with mental health issues or substance misuse. 

Is Your Business Eligible for the ERTC?

If you haven’t claimed the ERTC yet, you can still do so until April 15, 2024, for 2020, and until April 25, 2025, for 2021. Your business may qualify for this tax benefit if:

  • You had to stop or restrict your operations because of government decrees associated with COVID-19
  • Your gross receipts declined significantly during 2020 or eligible quarters in 2021

However, determining eligibility can be complex. You should consult a tax professional to confirm your eligibility for the tax return before filing a claim.

Reporting the ERTC Funds

Although the ERTC doesn’t count as taxable income, you must still report it. The transaction should appear on your Statement of Activities and Statement of Financial Position. Consult your accountant to ensure you’re reporting the tax benefit correctly.

Can You Use the ERTC to Improve Workplace Wellness?

Businesses can use their ERTC funds for multiple purposes. Re-investing ERTC benefits in employees is one option many companies choose. Expanding your benefits program can boost employee loyalty and help your organization attract new talent.

Important note: Although some wellness plans may reduce payroll taxes, many programs’ benefits count as taxable income. Consult a tax professional to learn how to report these programs in your tax documentation.

Employee Assistance Programs to Reduce Substance Abuse

Addiction and substance abuse constitute a quiet epidemic affecting many workplaces, harming employee wellness and productivity. Although some nonprofit organizations offer resources for people battling addiction, your organization can also provide this type of employee support through employee assistance programs (EAPs). These programs address employees struggling with various issues, including addiction to alcohol, drugs, or prescription meds.

EAPs that focus on substance abuse may offer services like:

  • Individual assessments
  • Substance abuse education and management
  • Treatment referrals
  • Individual counseling
  • Stress management

There are many good reasons to invest in addiction and substance misuse programs in the workplace. Doing so shows your workers you care about their well-being, helps you retain valuable employees, improves productivity, creates a healthier company culture, and lowers absenteeism.

Which Employee Assistance Program Should You Choose?

Depending on your location and organizational structure, you may choose between several types of EAPs that target addiction:

  • In-house programs. Employees receive counseling and educational services during office hours in an in-house program. This setup can work well for businesses with large teams working on site. 
  • External programs. These programs give workers access to substance misuse treatment and counseling through a network of eligible EAP providers operating in locations that are convenient for the employee. 
  • Blended programs. A blended program allows employees to meet with substance misuse professionals either in house or near their homes for added convenience. 

Dayes Law Firm: Reputable Legal Counsel for ERTC Claims

Are you wondering whether you can use ERTC benefits for employee wellness programs? Do you have other questions about the ERTC? Contact us at Dayes Law Firm for assistance. Our trusted tax lawyers can provide all the information you need about claiming, reporting, and using this tax benefit.Give us a call at (800) 503-2000 or fill out our online form to schedule your free consultation today!