ERC for restaurants is alive and well in 2023 which is a great thing. This potential infusion of money can help these establishments get back on their feet. The best part is most restaurants are eligible.
ERC for Restaurants Overview and Qualification
The COVID-19 pandemic has been brutal for all of us to get through. However, restaurant business owners seemed to have been even more impacted. The stress was made even worse due to the responsibility of paying salaries to all the restaurant employees.
Thankfully, the US government has established several relief programs for local business owners and has been lifesaving to the service industry. ERTC has ever-evolving qualifications, and complexities may throw even the most seasoned professionals into a loop.
Even if you’ve already begun to rebuild your restaurant business and are on the way to progressively leaving the economic shutdown in the rearview mirror, there’s still a chance for you to get some financial support from the government.
One such program is the Employee Retention Tax Credit or ERTC for short. While the program has officially expired in the third quarter of 2021, you can still claim the Employee Retention Tax Credit through April 2025, depending on the tax Quarter in question.
This is real money that can be infused into abusiness so don’t let this opportunity slip through your fingers.
What is Employee Retention Tax Credit?
The Employee Retention Tax Credit, also known as ERTC or ERC, is a refundable tax credit that your restaurant can claim based on qualified wages. In other words, ERTC enables you to claim a credit against some employment taxes equivalent to fifty percent of the qualifying salaries earned between March 12, 2020, and the end of the third quarter of 2021. This can later be used against the payroll taxes you already paid.
The Employee Retention Tax Credit was first formed as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act to assist small and medium-sized businesses, like restaurants, in continuing to pay their working staff throughout the COVID-19 pandemic. The objective was to promote employee retention (the number of current workers who remained with the business).
Over the two-year duration, the Employee Retention Tax Credit program has undergone several modifications. The Infrastructure Investment and Jobs Act changed it such that it will only apply to salaries paid before October 1, 2021, except for recovery businesses, particularly startups, which may hold the later deadline of January 1, 2022. The good news is that if your restaurant is qualified for ERTC, you may receive up to $33,000 per eligible employee during 2020 and 2021.
Do You Need Pay Back ERTC?
The answer is no. ERTC is a completely refundable tax credit that qualifying restaurants may claim as a reduction in some employment taxes. It is not a loan, so there is no need to pay it back at any point. For the vast majority of taxpayers, the amount of the refundable credit is greater than the amount of payroll taxes paid during the period that generated the credit.
Need help filing or have any questions about claiming your Employee Retention Credit? Please get in touch with FTCO ERC to see what’s available for your restaurant.
How Does ERTC for Restaurants Work?
The first thing that nearly all restaurant owners need to do is investigate whether or not they qualify for the Employee Retention Tax Credit. This is simpler to say than to do since the eligibility requirements and, ultimately, the credits have been subject to modification every year. Even though the program has officially ended, you can still claim ERTC for your restaurants even as late as 2024. This depends on the tax quarter in question.
Traditionally, once a restaurant owner had determined whether or not they were eligible, the next step was to estimate the ERTC for the relevant pay periods, deducting the amount from the payroll tax deposit.
Additionally, the employers must submit Form 941 within the first thirty days after each quarter’s closing. Mostly, the credit was more than the tax deposit, which meant that an advance payment could be lodged with Form 7200, and the employer would get the excess as a refund.
Even though the program has ended, your restaurant might still be eligible for the tax credit. According to the regulations, you have up to three years after the program’s termination to apply for any suitable quarters, including quarters for which you were granted a PPP loan. Nevertheless, know that applying for ERTC looks slightly different when filling out after September 30, 2021.
Even if your restaurant took the PPP loan, your restaurant business might now obtain Employee Retention Credit for 2020 and 2021 eligible employee salaries. For 2020, you can access a maximum of $5,000 per qualified employee; however, for 2021 and beyond, this maximum will increase to $7,000 per eligible employee for each calendar quarter.
| Applicable Period | 2020 Q1 2021 | Q2 2021 Q3 2021 | Q4 2021 |
| Qualified Wages * | $10,000 (50%) | $10,000 (70%) | $10,000 (70%) |
| Credit/Employee | $5,000 | $7,000 | $7,000 |
| Employer (1) Aggregation | Yes | Yes | Yes |
Restaurants Need Help With ERTC Tax Credits
Believe it or not, claiming the Employee Retention Tax Credit is not as easy as it seems. There is a lot of paperwork involved and eligibility requirements to meet. However, it is way too much money, and it doesn’t make sense to pass it up simply because the procedure is complicated.
Thus, joining hands with an ERTC expert is your best bet. Here’s how we can help you claim the Employee Retention Credit for your restaurant business in five simple steps.
- Complete the Questionnaire: Start with the ten simple questions to begin your ERTC claim.
- Review Forms: Upload PPP documents, 941 returns, and raw payroll data on EE’s secure portal.
- Credit Calculation: Get an accurate calculation of the credit you can receive from the IRS.
- Application Package: Get ERTC expert help filing the 941-X Amended payroll returns.
- Get Paid from IRS: Receive an email from the IRS with your very own ERTC check.
FTCO ERC Assistance with ERTC Filing
We hope this information was useful and guides you in the right direction for your restaurant to get the maximum refund. The incentives you get through Employee Retention Tax Credits may be a breakthrough in your restaurant business growth.
FTCO ERC has been helping restaurants amend their tax filings and get the money back that they deserve.
Our white glove services will get you through the whole process till the money is in your hand.
From assessment and preparation to filing the claim, we take on everything that comes your way when claiming ERTC for your restaurant. For further queries, visit call: 360-641-7709
. Check the ERTC eligibility now.
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