Dear ACC members
In case you missed this COVID relief refund opportunity…
On December 27th 2020, the Consolidated Appropriations Act allowed employers affected by the COVID-19 pandemic to claim a special REFUNDABLE tax credit for wages paid to employees in 2020 and 2021; regardless of whether or not they received a PPP loan.
Simply put, the Employee Retention Credit (ERC) is designed to reward employers whose businesses have suffered due to COVID related restrictions or significant decline in gross receipts AND paid its employees between March 12th 2020 and December 31 2021.
ERC BENEFITS
– Up to $5,000 of refund (per year in 2020) and up to $7,000 of refund (per quarter in 2021) for wages and health plan cost paid to employees
– Maximum refund opportunity per employee is $33,000
– On average, our restaurant clients have each qualified for and average of $200,000 in refunds for 2020 and Q1-2021
EMPLOYER ELIGIBILITY
– Significant decline in gross receipts in any quarter in 2020 or 2021
OR
– Government ordered restriction to your operation (i.e. indoor dining capacity restriction or suspension)
WHAT MAKES A RESTAURANT ELIGIBLE?
The restaurant industry is one of the hardest hit by the COVID pandemic and have suffered greatly. The biggest contributing factor of this has been the dining restrictions imposed by the state and local government. IRS guidance for restaurants appears to contradict itself and is confusing. We can show you how any restaurant that has been subject to an indoor dining capacity restriction qualifies for ERC refunds.
WHAT IF I RECEIVED A PPP LOAN?
When the ERC program was enacted, eligible employers had to choose between it or the Paycheck Protect Program (PPP). In December of 2020, The Consolidated Appropriations Act retroactively amended the law to allow employers to claim both benefits. The caveat being that wages used to calculate the ERC cannot also be used by forgiven PPP loans. This certainly adds complexity to the ERC claim, but rest assured, we can maximize credits without affecting any PPP loan forgiveness.
