What Role Can the ERTC Play for Coffee Shops and Cafes?

January 8, 2024
Dayes Law Firm

Many coffee shop and cafe owners can apply for the Employee Retention Tax Credit (ERTC/ERC) just the same as owners of other businesses that qualify for the program. The team of tax professionals at Dayes Law Firm can help you determine the exact role the ERTC can play for coffee shops and cafes and the people who operate them.

How the ERTC Can Help Coffee Shops and Cafes

To be eligible to claim the ERTC, employers must have undergone a full or partial suspension of operations as a result of an order from a governmental authority because of COVID-19 during 2020 or the first three quarters of 2021, or experienced a “significant” decline in gross receipts in the year 2020 or a decline in gross receipts during the first three quarters of 2021. Some businesses can also qualify as a Recovery Startup Business for the third or fourth quarters of 2021.

Although not every business is eligible to claim the Employee Retention Tax Credit, many restaurants like coffee shops and cafes are. The general goal of the ERTC was to encourage staff retention and to avoid layoffs – and if you managed to do that as the owner of a cafe or coffee shop during the worst economic period of the COVID-19 pandemic, the ERTC can play an important role for your business. 

There are a number of changes that owners of restaurants – including coffee shops and cafes – went through in order to keep their businesses open during the height of COVID in 2020 and 2021. They include things like seating capacity changes to comply with social distancing orders, closing your business for in-person dining but switching to delivery and takeout, and more. 

A tax professional can help you determine if you faced specific hardships and qualify to claim the ERTC for your cafe or coffee shop. And if you do, the tax credit and your subsequent refund could lead to big things for your shop. 

You could potentially earn up to $5,000 per employee when claiming the ERTC for 2020, and/or up to $7,000 per employee per quarter in 2021. In total, businesses may be able to seek a refund of up to $26,000 per employee for the eligibility period.

That kind of money could play a major role in the operation of your cafe or coffee shop. You could hire more employees, offer current employees a wage increase, increase your product offerings, improve or replace equipment, add to your marketing budget, and so much more. 

The sky’s the limit when it comes to the role the Employee Retention Tax Credit can play in the success of your coffee shop or cafe. And a skilled tax attorney can help you navigate the application process from start to finish. 

Working With Dayes Law Firm

At Dayes Law Firm, we can answer any of the questions you may still have about the Employee Retention Tax Credit program, or help address some of your concerns. Our team of experienced tax attorneys would be happy to help you and can offer a free, no-obligation consultation to determine how the ERTC may help your cafe or coffee shop specifically. 
Please give us a call at (800) 503-2000 today to learn more. We look forward to helping you get the most out of your ERTC application!