Don’t Forget About the
Employee Retention Credit!

Laura Schnelle, CPA 3 min read

When the Employee Retention Credit (ERC) was introduced as part of the CARES act in March 2020, many small businesses decided to receive PPP loans which, at the time, made them ineligible to take advantage of the ERC. Then, in December 2020, the Consolidated Appropriations Act was passed and the ERC became available retroactively to employers that had received a PPP loan.

Many restaurants have not been made aware that they might qualify for this extremely valuable credit. Businesses can receive up to $33,000 in refundable credits per employee between 2020 and 2021! In an industry that has been trying to stay afloat throughout the COVID-19 pandemic, these additional credits are a welcome relief.

Do I qualify for the credit?

Employers that paid W-2 wages during 2020 or 2021 may qualify for the credit if they meet one of the following requirements:

  • The business experienced a full shut down or partial suspension of operations due to a government mandated order. For restaurants it is important to remember that many will qualify based on this requirement alone. If your restaurant was limited to providing only take out and delivery orders or subject to capacity limits, this may qualify as a partial suspension. OR
  • The business experienced a significant decline in gross receipts. For 2020, this means a business had a 50% reduction in gross receipts during a calendar quarter in 2020 when compared to the same quarter in 2019. For 2021, this required reduction is more favorable, requiring a 20% reduction in gross receipts when compared to the same quarter in 2019.

I think my business qualifies, now what?

First, you will need to calculate the total credit that your business is eligible for. It is highly recommended that you use an accountant or CPA with the appropriate knowledge of the ERC calculations to do this. There are a variety of considerations to be made in order to maximize your credit! Many large payroll providers are offering to do this, but they often don’t have the tools or the appropriate information from you to make sure you are getting the largest credit possible.

Once you have calculated your total credit, you will need to file an amended form 941 to receive your refund. This form can be filed with a payroll provider or CPA.

How can I get help claiming the employee retention credit?

If you would like to set up a free consultation to determine if you qualify for this valuable credit, please fill out the form below and I will be in touch soon! If you work with me, you will also receive a free 30 day trial of which is usually 7 days for new signups.

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