Are you up to speed on the Employee Retention Credit (ERC) for your fitness business? There were some changes to this tax credit in late 2020 which made it more valuable, particularly for fitness businesses. This tax credit can potentially save your business thousands (and thousands) of dollars!
Employee Retention Credit (ERC) 2020
- If you paid wages during your eligible period, you can claim a credit for 50% of those wages.
- Eligible period = suspended operations or 50% decline in revenue
- Capped at $10k in wages per employee
Employee Retention Credit (ERC) 2021
- Employers receive credit of 70% of wages paid during an eligible quarter
- Eligible quarter = suspended operations or 20% decline in revenue
- Capped at $10K in wages per employee per quarter
Quick example for review of 2020
- Must consider the time period you applied the PPP loan funds toward payroll
- Determine the amount of ERC you can claim for other periods that qualify
- File an amended return
PPP Forgiveness and ERC for 2020
Example #2 for review of 2020 payroll, PPP loan forgiveness and the ERC
Questions to ask
- Do you qualify? Were you shut down?
- When did PPP money run out?
- How to claim the credit?