Note 4 – Other receivable

Other receivable consisted of the following:

 Schedule of other receivable

Mentor Capital, Inc.

Notes to Consolidated Financial Statements

December 31, 2022 and 2021

In 2022, WCI received an Employee Retention Tax Credit (“ERTC”) in the amount of $1,350,161, in conjunction with WCI’s professional employer organization’s receipt and application of the same to WCI leased employees. The ERTC was initially established by Section 2301 of Coronavirus Aid, Relief and Economic Security Act of 2020, as amended by Sections 206-207 of the Taxpayer Certainty and Disaster Relief Act and by Division EE of Consolidated Appropriation Act of 2021 and Section 9651 of American Rescue Plan Act of 2021; which is authorized by Section 3134 of the Internal Revenue Code. The Consolidated Appropriation Act of 2021 and American Rescue Plan Act of 2021 amendments to the ERTC program provided eligible employers with a tax credit in an amount equal to 70% of qualified wages (including certain health care expenses) that eligible employers pay their employees after January 1, 2021 through December 31, 2021, as amended by the Infrastructure Investment and Jobs Act of 2021, which retroactively ended the ERTC program as of September 30, 2021 for all businesses with the exception of recovery startups. The maximum amount of qualified wages taken into account with respect to each employee for each calendar quarter is $10,000 so that the maximum credit that an eligible employer may claim for qualified wages paid to any employee is $7,000 per quarter. The credit is taken against an employer’s share of social security tax reported by WCI’s professional employer organization on Form 941-X for each applicable quarter. The receipt of the tax credit is expected to improve WCI’s liquidity due to the effects of the credit. Although WCI’s professional employer organization currently anticipates receiving credits for wages paid in 2020 and the first three quarters of 2021, there can be no assurances that WCI or WCI’s professional employer organization will continue to meet the requirements or that changes in the ERTC regulations including changes in guidance provided by the IRS with respect to the implementation and operation of the ERTC, will not be adopted that could reduce or eliminate the benefits that WCI and WCI’s professional employer organization may receive or qualify for.

ERTC income of $1,350,161 and $0 is reflected in other income for the year ended December 31, 2022 and 2021 in the condensed consolidated income statement. WCI received the ERTC based on qualitative information submitted. During the year ended December 31, 2022, $1,350,161 was claimed against current payroll tax liabilities as they became due.

The December 31, 2021, ERTC balance of $33,222, was received by Mentor as a refund in the year of 2022. The balance at December 31, 2022 is $0.