No two days are ever alike in the high-pressure, experiential hospitality industry. Business owners must often wear many hats to juggle the responsibilities of human resources management, payroll administration, risk management, employee benefits and more. No wonder it’s so easy for restaurants to leave money on the table by accident!
What money? As of February 2021, restaurants, hotels and other hospitality businesses may be eligible to claim tax credits. Many are completely unaware of this opportunity, and might even miss out on tax savings without a closer look at the tax law.
In March 2020, the United States enacted the Employee Retention Credit (ERC) as part of the CARES Act. Aimed at incentivizing companies to keep employees on their payroll, this refundable tax credit is claimed against an employer’s share of social security taxes on its quarterly payroll tax filings for each eligible quarter.
Previously, a provision prohibited companies from claiming the ERC credit if they had also received a loan through the federal Paycheck Protection Program (PPP). However, Congress recently removed this restriction and made the change retroactive to March 2020.
You May Be Eligible for Employee Retention Credit
As a result, many businesses are now eligible for the employee retention credit, if the company paid qualified wages. This comprises both wages and health plan expenses paid to all employees during a calendar quarter, pending the employer’s size.
The Employee Retention Credit language states that, for employers with 100 or fewer full-time employees, qualified wages include wages and health plan expenses paid to all employees, whether they provided services or not. For employers with more than 100 full-time employees, qualified wages only include wages and health plan expenses paid to employees who were not providing services.
The same enactment also provided significant expansion to the existing Employee Retention Credit. It has been extended until June 30. Changes include:
- Decline in gross receipts test to qualify for the credit was reduced from 50% to 20%. That means for Q1 2021 and Q2 2021, companies that experience a decline in gross receipts of more than 20% compared to the same quarter in 2019 will be eligible.
- Increase from 100 to 500 in the number of full-time employees that it takes to be considered a large employer.
- The maximum credit that an employer can claim per employee will be $7,000 per quarter versus the previous amount of $5,000 for the entire year.
There are a few special circumstances and legal language to prevent companies from “double-dipping” into federal funds to pay the same wages. These interactions between the ERC credit, PPP loans and the Work Opportunity Tax Credit (WOTC) require strategic review to ensure the best positioning for tax relief.
Don’t Leave Money on the Table! Call Integrity Employee Leasing
To help save your hard-earned time, money and sanity, Integrity Employee Leasing takes the headache of paperwork, reporting and administrative tasks off restaurant owners’ plates:
- Comprehensive Human Resources
- Payroll Administration
- Risk Management
- Online Payroll Processing
- Insurance Products
- Workers’ Compensation
- Enhanced Employee Benefits
- Job Cost Trends & Analysis
As one of the nation’s leading professional employer organizations (PEOs), we treat you as more than just a business. We efficiently center operation around you, with meticulous attention to detail and an emphasis on responsiveness to our valued clients.
When your restaurant partners with Integrity Employee Leasing, you will be paired with your own dedicated account representative. This individual monitors the marketplace for trends, coming changes and opportunities for savings such as the ERC, communicating with you in a direct, timely fashion.
Onboarding is a snap, because Integrity Employee Leasing’s operations are already optimized. That means we can begin immediately by customizing your hiring, onboarding and payroll processes. Plus, our highly credentialed team members already fully understand the distinctive needs associated with running a restaurant. You’ll be working with a partner that functions as an extension of your business, handling the headaches that come with bookkeeping, human resources management, reporting and more.
Finally, when it comes to values, we take ours seriously. Just look at the name: Integrity Employee Leasing. With an emphasis on honesty, accuracy and efficiency, you can be confident that your paperwork, payroll and benefits administration, reporting and more will be conducted professionally and accurately from the start.
Contact Integrity Employee Leasing
What are you waiting for? Let’s reclaim your time, money and peace of mind together. Call Integrity Employee Leasing today at (941) 625-0623.
