How Can the ERTC Benefit Industries Hit Hard by the Pandemic?

October 27, 2023
Dayes Law Firm

The COVID-19 impacted different people and businesses in different ways. The Employee Retention Tax Credit (ERTC/ERC) was implemented to help businesses that suffered financially as a result of the pandemic but that still retained workers even with those challenges. So, what ERTC considerations in particular apply to industries heavily affected by the pandemic?

ERTC Considerations for Heavily Impacted Industries

ERTC eligibility depends on key determining factors. If you operated a business in 2020 or 2021 and experienced either a full or partial suspension of the operation of that business during any quarter of that year as a result of a governmental order limiting certain operations due to COVID-19, or if your business experienced a significant decline in gross receipts, you may qualify to apply for the tax credit. 

For the year 2020, if a business experienced a significant decline in gross receipts by more than 50 percent when compared to the same quarter from the year 2019, it may qualify to claim the credit. For tax year 2021, if the business experienced a decline in gross receipts in the first, second, or third calendar quarter and the gross receipts of that calendar quarter are less than 80 percent of the gross receipts in the same 2019 calendar quarter, it might be able to claim the ERTC. 

These are things industries that were heavily affected by the pandemic should consider. For instance, hotels that dealt with travel restrictions were heavily impacted in the last few years. Since people traveled less, hotels and motels didn’t book as many visitors. Many hotels likely faced a major drop in revenue, which is an ERTC consideration any hotel can consider when deciding whether to apply for the tax credit. 

Restaurants and bars also took a hit during the COVID-19 pandemic. Many had to entirely close down, or could only remain open for takeout and delivery orders. Some dealt with restrictions like increasing spacing between seating, which sometimes led to fewer tables available to fill with customers. Others could only offer outdoor seating, which reduced business because some customers do not like that option.

Many restaurant and bar owners likely dealt with a significant drop in gross receipts due to the pandemic and experienced full or partial suspension of the operation of their business in 2020 and 2021. Those ERTC qualifiers mean those business owners may qualify to apply for the Employee Retention Tax Credit. 

The Dayes Law Firm Provides Assistance in Applying for the ERTC

Industries that were heavily affected by the pandemic like the restaurant and hotel industries need to seriously consider whether they should try to claim the ERTC because time is running out to do so. For all quarters in 2020, the deadline to apply for the ERTC is April 15, 2024.

For quarters in 2021, the deadline to apply is April 15, 2025.

If you are a business owner who’d like someone to take a second look to be sure you qualify to claim the ERTC and to help you with every step of the application process, please contact us at Dayes Law Firm for assistance. 

Our team has already assisted in filing for more than $250 million in ERTC refunds and we can offer you a free, no-obligation consultation to discuss your own situation. Please call us at (800) 503-2000 to learn more today!