If you own a performance venue, your business likely faced a full or partial shutdown during the COVID-19 pandemic, when people were not allowed to gather in groups. If you kept workers on payroll during this time, you may be able to claim the Employee Retention Tax Credit (ERTC).
How can you know whether you’re eligible, and how you may use your tax refund? Here are the basics of the ERTC for theaters and performance venues.
Are You Eligible for the ERTC?
If your venue had up to 100 full-time employees in 2020, or up to 500 full-time employees in 2021, you may be eligible for the ERTC if at least one of the two is true for your business:
- Your theater or venue had to shut down or slow its activity because of government-issued orders related to the pandemic
- Your gross receipts dropped significantly in 2020 and 2021 compared to the same quarters in 2019
Theaters and live venues typically answer these requirements since they were among the businesses hit hardest by closures and capacity restrictions while the COVID-19 pandemic was at its peak.
Check How Much You Can Claim
Even if it looks like you’d be a good candidate for the ERTC, all business owners must be careful when claiming this credit. You must understand the finer details of claiming the ERTC for theaters, like which wages can count toward the credit and which are ineligible.
Hiring a tax professional is the surest way to prevent mistakes and avoid unwanted attention from the IRS. The IRS now checks every ERTC claim very carefully, following an influx of incorrect or fraudulent claims. Ensure you work with a reputable lawyer or tax advisor to guide you through filing your amended tax return.
What Can You Do With Your Tax Credit?
Supposing all goes well, and you collect a nice sum of money, what can you do with it? The possibilities are virtually limitless, but you must have a plan to make good use of this windfall. Here are a few possibilities.
Pay Off Debt
If you’re still carrying debt from the hard days of the pandemic, the ERTC could give you a chance to pay it off. You could also stash some money in an emergency fund to weather the next crisis.
Launch a New Program
You can use the tax credit to start a new program or show to attract more people to your venue. Some of the money could fund an advertising campaign that targets your local audience.
Spruce Up Your Theater or Venue
Have you been holding off on renovations, remodeling, or buying new equipment because your budget wouldn’t allow it? Now could be your chance to upgrade. Invest in new and better seating arrangements, advanced acoustics, improved lighting, better accessibility, and other features to make your venue more attractive.
Reward Your Staff
The ERTC can also allow you to reward your hard working staff. You could use some of the credit to offer an employee bonus, expand worker benefits, or start a workplace wellness program. Doing this may help you keep valuable workers and attract new talent to your venue.
Call Dayes Law Firm to Find Out Whether You May Claim the ERTC
Are you still unsure whether the ERTC applies to your theater business? Call us at Dayes Law Firm. Our reputable tax lawyers will check whether your venue is eligible, review your financial records, and let you know how much you can claim on your amended tax return.Call 800.503-2000 or contact the Dayes Law Firm ERTC team online for a free consultation.