Many owners of fitness establishments and gyms wonder if their own businesses may be eligible for ERC. Generally, if you have W-2 employees, then your business must fall into at least one of the following two categories:

• Your business(es) experienced decreased revenue during quarters 1-4 and 1-3 in 2020 and 2021, respectively, compared to 2019
• Your business(es) suffered from government-mandated restrictions

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Government-mandated restrictions may include things like partial or full shutdowns, social distancing requirements, restrictions in services provided (e.g., tanning bed, sauna, jacuzzi, or pool closures), and increased sanitization procedures, among many others.

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On top of this, a lot of gyms and fitness centers may have received the Paycheck Protection Program (PPP) loans in 2020 or 2021 and wonder how that affects their ERC eligibility. Regardless of whether you received PPP 1 and/or 2, you may be eligible for ERC. Speaking with an experienced certified public accountant can help you to better understand your own business’ eligibility.

Business owners who have claimed the Employee Retention Credit may be wondering when they can expect to receive the tax credit. With so many businesses being affected by the pandemic, the IRS has a high volume of applications to process. Every case is unique and will have a different timeline. Your refund could be processed in about 8 months, although it may take longer. 

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If you wish to check the status of your refund, you may call the IRS, or use the “Where’s My Refund?” feature on the IRS website.

For many gyms and fitness centers, ERC can be a great financial relief, but it is important to make sure you and your tax planners are diligent and thorough when examining your eligibility. It is critical to note that the IRS will carefully examine your claim for this credit. ERC claims with inaccurate information can lead to compliance risks such as ERC audits in the future, setting up a potential disaster.

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Strategic Tax Planning’s experienced tax professionals and CPAs will work closely with you and your business, ensuring all of your ERC qualifications and facts are accurate and in order. We are here to help you receive your deserved relief for persevering during difficult financial times.