Many business owners in the leisure and hospitality industry wonder if their business may be eligible for ERC. Typically, if you have W-2 employees, your business must fall into at least one of the two following categories:

• Your business(es) experienced decreased revenue during quarters 1-4 in 2020 and 1-3 in 2021, compared to 2019
• Your business(es) suffered from any number of government-mandated restrictions
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Government mandated restrictions may include things like partial or full shutdowns only to reopen with reduced operating hours, restrictions on public gatherings (e.g., wedding receptions, concerts, festivals), capacity limitations, various dining restrictions on table spacing and /or buffet services for example, and an adjustment of hours to maintain sanitation requirements, among other things. 

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On top of this, many business owners may think receiving the Paycheck Protection Program (PPP) loan in 2020 and 2021 disqualifies them from ERC. This is not the case. Regardless of if you received PPP 1 and/or 2, you may be eligible for ERC.

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If you wonder about your leisure or hospitality business’ ERC eligibility, consult with an experienced certified public accountant (CPA). Speaking with a tax professional can help you to get a better understanding of ERC and your eligibility.

With the leisure and hospitality industry being so large, you may wonder if your business is included. Businesses in this industry that may have experienced profit loss or mandated restrictions include, but are not limited to:

• Accommodation, including hotels and motels
• Amusement, gambling, and recreation industries
• Food services and drinking places
• Museums, historical sites, and similar institutions
• Performing arts, spectator sports, and related industries
• Tourism businesses

Business owners who have filed for ERC 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 may be processed in about 8 months, although it could take longer. 

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

For owners of leisure, tourism, and hospitality businesses, 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. Submitting an ERC claim with false 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 leisure or hospitality 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.