Are Cafes Eligible for Employee Retention Credit (ERC)?

Key Takeaways:

• Cafes and coffee shops are indeed eligible for the Employee Retention Credit (ERC) under specific conditions related to COVID-19 impact.

• The ERC provides up to $5,000 per employee for 2020 and up to $7,000 per employee per quarter for 2021, which can be a significant financial relief for cafe owners.

• Understanding the eligibility requirements and the claiming process is crucial to maximizing the benefits of the ERC for your cafe.

• Common misconceptions about the ERC may prevent some cafe owners from claiming the credit they deserve.

• Professional services like us, ERTC Express can assist in navigating the complexities of the ERC to ensure cafes obtain the maximum refund possible.

Are Cafes Eligible for ERC Refund

Cafes and coffee shops are indeed eligible for the Employee Retention Credit (ERC) refund, based on specific conditions. If your cafe experienced a significant decrease in gross receipts during any quarter compared to the same period in 2019, or if it was partially or fully shut down due to government COVID-19 orders, you might qualify.

Simply put, a drop in your revenue by more than 50% in any quarter of 2020 or by 20% in 2021 compared to 2019, or adherence to any government-imposed operational adjustments, such as reduced operating hours, qualifies you. This eligibility can cover up to 70% of qualified wages and certain health insurance costs, up to $10,000 per employee per quarter in 2021—up to $28,000 per employee for the year.

Cafes in the U.S. can qualify for the ERC by demonstrating either a considerable revenue loss or by being affected by government shutdown orders, including:

• Additional sanitization requirements;

• Social distancing restrictions;

• Capacity limitations;

• Take-out only requirements;

• Supply chain disruptions.

By navigating these qualification pathways, cafes can secure substantial financial support through the ERC, aiding in overcoming the pandemic’s economic impacts. This support is essential for business stability and the well-being of employees in the cafe sector.

Common Misconceptions about ERC Refund for Cafes

Despite the clear financial benefits, some cafe owners haven’t claimed their ERC due to misconceptions. Let’s clear those up so you can move forward confidently.

1. Only large businesses qualify: The ERC is not exclusive to big corporations. Small businesses, including cafes, can and should take advantage of this credit if they meet the criteria.

2. If you received PPP, you can’t get ERC: While it’s true you can’t double-dip for the same payroll periods, you can still benefit from the ERC even if you received funds from the Paycheck Protection Program (PPP).

3. ERC is too complicated to be worth it: Yes, tax credits can be complex, but the potential financial relief is substantial. Don’t leave money on the table because the process seems daunting.

4. You must have experienced a complete shutdown: Partial disruptions to your business due to government orders also make you eligible, not just complete shutdowns.

5. ERC is no longer available: While some deadlines have passed, there’s still an opportunity to claim the ERC for past quarters.

How ERTC Express Help Cafes Maximize ERC Benefits

Now, let’s talk about how a service like ERTC Express can be a game-changer for your cafe. Navigating the ERC’s intricacies might seem like trying to solve a puzzle with missing pieces. This is where we come in at ERTC Express, providing the expertise to not only complete the puzzle but to ensure the picture it reveals is financially beneficial for your cafe.

Step-By-Step Guide: How ERTC Express Help Cafes Maximize ERC Benefits

At ERTC Express, we’re committed to helping cafes like yours navigate the Employee Retention Credit (ERC) process to ensure you maximize your benefits. Here’s how we guide you through each crucial step:

Step 1: ELIGIBILITY
Initially, we at ERTC Express start by assessing whether your cafe qualifies for the ERC. We delve into how the pandemic has affected your operations, looking at drops in revenue and any disruptions caused by governmental directives. Our team of Account Executives is with you every step of the way, ensuring all necessary documentation is gathered for the submission and addressing any questions you might have about the process.

Step 2: PROCESSING
Once we’ve established your eligibility, our team of CPAs and Customer Success Agents begins processing your claim immediately. To minimize the risk of an audit and ensure the defensibility of your claim, we implement our Power of 3 system. This crucial step involves three separate CPA teams reviewing and agreeing on the final credit amount before we submit your claim, ensuring we accurately maximize your available credit based on your payroll data and eligible wages.

Step 3: RECEIVE YOUR FUNDS
The final step in our process is the most rewarding—when you receive your funds. Importantly, you will only be billed for our services once the funds are in your hands. This policy solidifies our commitment to your success, as our goals are directly aligned with ensuring your financial recovery. Throughout the process, we remain by your side, ready to offer support and answer any questions, especially in the event of IRS inquiries or the need for additional documentation.

By choosing ERTC Express to assist with your ERC claim, you’re not just navigating a financial incentive; you’re taking a significant step towards ensuring your cafe’s ongoing success and stability. Our expert guidance and tailored approach mean you can focus on what you do best—running your cafe—while we handle the complexities of the ERC process. Reach out to us today, and let’s maximize the ERC benefits for your cafe together.

Get Maximum Cafes Refund with ERTC Express to Get Maximum Cafes ERC Refund with ERTC Express

Securing the Employee Retention Credit (ERC) is crucial for cafes in the current economic climate, offering a significant financial boost towards stability and recovery. Partnering with ERTC Express not only simplifies this complex process but also ensures you receive the maximum possible refund. Our unwavering commitment to IRS compliance, coupled with our accreditation by the American Institute of Certified Public Accountants (AICPA), underscores our dedication to excellence and the highest professional standards. Here’s why ERTC Express stands out as your trusted ally in maximizing your cafe’s ERC refund:

• IRS Compliance: Our rigorous adherence to IRS regulations ensures your ERC claim is compliant, offering peace of mind and a solid foundation for your application.
• Trusted by the AICPA: Recognition by the AICPA highlights our commitment to quality and integrity, affirming our position as a leader in ERC filings.
• U.S.-Based CPAs: Our team of U.S.-based CPAs possesses specialized expertise in ERTC filings, ready to tackle the complexities of your claim with top-tier assistance.
• Power of Three – Audit Defense: Our unique strategy involves three separate CPA teams reviewing and agreeing on your claim’s final amount, enhancing the defensibility of your refund.
• Refund Maximization: We are dedicated to ensuring you receive the full refund you deserve, employing strategies that have consistently outperformed large payroll and software companies’ estimates by 40-120%.

By choosing ERTC Express, you’re not just claiming a tax credit; you’re investing in the future of your cafe, reinforcing your commitment to your staff and community. Let us guide you through the ERC claim process, helping you to avoid common pitfalls and secure the maximum refund, ensuring your cafe remains a cherished part of your local community for years to come.

Frequently Asked Questions (FAQ)

Are cafes able to claim the ERC?

Cafes are eligible for the ERC if they have been affected by government-ordered operational restrictions or if they have seen a substantial decrease in gross receipts.

Can cafes that started after February 15, 2020, claim the ERC?

Cafes that began their operations after February 15, 2020, face specific eligibility criteria for the ERC. While the original guidelines targeted businesses in operation before the pandemic, subsequent legislative changes may provide opportunities for newer businesses to claim the credit under certain conditions. It’s advisable to consult with a tax professional to understand the current eligibility requirements for businesses started after this date.

How should cafes determine their ERC amount?

The ERC amount for cafes is calculated based on qualified wages paid to employees during affected quarters, with caps on the amount per employee.

What documentation do cafes need to provide for the ERC?

Cafes need to document any government-imposed operational restrictions, maintain accurate payroll records of qualified wages, and provide proof of reduced gross receipts.

Can a cafe claim ERC if they have already filed taxes?

Yes, cafes can still claim the ERC even if they have already filed their taxes. Employers can amend their previously filed payroll tax returns using Form 941-X using Form 941-X to claim the credit for past quarters. This process allows businesses to retroactively receive the benefits of the ERC for eligible periods, even after initial tax filings have been completed.