During 2020, if an employer took a PPP loan they were ineligible for the Employee Retention Tax Credit program. However, this restriction was lifted retroactively in December 2020 from March 2020. This retroactive removal a significant restriction of participation in this program creates a chance for small restaurant operators to take a look back. Employers with 100 or fewer full time employees can have access to ERTC (on-premises, employed employees) in 2020. Employers that have 500 or fewer full time employees can also have access to ERTC in 2021. The employer status is calculated by counting the average number of full-time employees employed during 2019.
These five ERC quick tips will be very helpful when you file your claims. Modern Restaurant Management would like to keep the information above when you create an online account. We won't share your information with third parties. You can also delete your information from our systems at any time. Maxwell spoke with FSR about the latest, including the Employee Retention Tax Credit and why some of these incentives are too good to pass up for restaurants. Contact your Withum advisor to see if you are eligible for the ERC.
ERC is not a loan as PPP and must not be paid back or forgiven. It is a check that the Department of Treasury sends for up to $26,000 per person to help your business through the turmoil of the past 2 years. This program is less well-known than the PPP, the Restaurant Revitalization Fund and other programs, but it can be just the same for smaller restaurants. Restaurant operators who capitalize on this opportunity may be able to accelerate their restaurant's recovery.
the CAA and the more recent American Rescue Plan Act , the maximum ERC in this year is 70% of up to $10,000 in qualified wages per quarter -- in other words, up to $28,000 per employee for the year. Businesses that received credit in the initial round, and who are eligible for the additional credit, will be contacted to provide additional information by May 16th. Your restaurant can be considered partially shut down during times of government restrictions. This also applies to outdoor dining. The savings could be up to $5,000 per eligible employee per month in 2020, and up to $7,000 in 2021.
Many restaurant owners are hesitant to apply for the ERC. They assume they aren't eligible because their business has not been shut down completely, or they didn't lose enough money to qualify. However, the new legislation allows employers to claim the credit, even if they receive a PPP loan, as discussed below. PPP loans received the most attention, but the Employee Retention Credit Tax Credit is a valuable form of restaurant funding.
Restaurants that previously filed Form 94-X to claim ERC gratuity can file a new Form 941X for the current quarter. To avoid confusion, restaurants who wish to file a second form 941-X to include tips must wait until they have received the refund on the first Form 941X. Restaurants that were struggling due to government shutdowns and social distancing orders quickly accessed the Payment Protection Program to get much-needed cash flow.