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Note 12 - Employee Retention Tax Credit
 9 Months Ended
Jul. 31, 2021
Notes to Financial Statements  
Income Tax Disclosure [Text Block]

(12)

Employee Retention Tax Credit

 

The Employee Retention Tax Credit (“ERTC”), created in the March 2020 CARES Act and then subsequently amended by the Consolidated Appropriation Act (“CAA”) of 2021 and the American Rescue Plan Act (“ARPA”) of 2021, is a refundable payroll credit for qualifying businesses keeping employees on their payroll during the COVID-19 pandemic.  Under CAA and ARPA amendments, employers can claim a refundable tax credit against the employer share of social security tax equal to 70% of the qualified wages (including certain health care expenses) paid to employees after December 31, 2020 through December 31, 2021.  Qualified wages are limited to $10,000 per employee per calendar quarter in 2021 so the maximum ERTC available is $7,000 per employee per calendar quarter. 

 

OCC is an eligible small employer under the gross receipts decline test when comparing the first calendar quarter of 2021 to the same quarter in calendar year 2019, which qualified the Company to claim ERTC in both the first and second calendar quarters of 2021 under the amended ERTC program. The Company qualified for a refundable payroll tax credit totaling $3,375,815 during its second fiscal quarter and $964,550 during its third fiscal quarter of 2021 for a total of $4,340,365. The $964,550 is included in other income on the Company’s condensed consolidated statement of operations for the three months ended July 31, 2021, and the $4,340,365 is included in other income on the Company’s condensed consolidated statement of operations for the nine months ended July 31, 2021. The Company was able to use $710,303 of the ERTC during the third quarter of fiscal year 2021 to offset payroll taxes in the months of May and June 2021. The remaining $3,630,062 of the ERTC is included in other receivables on the Company’s condensed consolidated balance sheet as of July 31, 2021.