Are Franchisees Eligible for Employee Retention Credit (ERC)?

Key Takeaways

• Franchisees can be eligible for the Employee Retention Credit (ERC) under specific conditions.

• It’s crucial to debunk common myths that may prevent franchisees from claiming the ERC.

• Professional services, like ERTC Express, can help franchisees navigate the complexities of ERC claims.

• Understanding the step-by-step process ensures proper filing and maximization of potential refunds.

• Compliance with IRS guidelines is essential for a successful ERC claim.

Are Franchisees Eligible for ERC Refund

When we talk about the Employee Retention Credit (ERC), a game-changer for many businesses during the COVID-19 pandemic, the question often arises: Are franchisees eligible for this financial lifeline? The answer is a resounding yes, but with a few caveats. Before we go further into this article, here’s a list of some well-known franchise companies:

1. McDonald’s
2. Taco Bell
3. Papa John’s
4. Subway
5. Dunkin’
6. KFC (Kentucky Fried Chicken)
7. Burger King
8. Domino’s Pizza
9. Starbucks
10. Pizza Hut
11. Wendy’s
12. 7-Eleven
13. Tim Hortons
14. Marriott International
15. Jimmy John’s
16. The UPS Store
17. Dairy Queen
18. Hardee’s
19. Jani-King (commercial cleaning services)
20. Anytime Fitness

The ERC is a refundable tax credit available to franchisee like restaurants, bars, and cafes that kept employees on payroll during the pandemic. For franchisees, this means if your franchise was impacted by government-mandated shutdowns or experienced a significant decline in gross receipts, you could be leaving money on the table if you don’t explore this credit.

Franchise businesses, spanning a wide range of industries from fast food to retail, have been significantly impacted by the pandemic, leading to several operational adjustments:

• Implementing stringent cleaning protocols and customer safety measures to comply with health guidelines.

• Adapting service models to include curbside pickup, delivery options, and contactless transactions to meet customer needs while ensuring safety.

• Navigating disruptions in supply chains that affect product availability and operational efficiency.

• Managing reduced operating hours or temporary closures due to government-imposed restrictions, impacting revenue and employee retention.

Common Misconceptions about ERC Refund for Franchisees

Now, let’s clear the air on some common misconceptions that might be holding franchisees back from claiming the ERC:

1. Partial Disruptions Qualify: It’s a common fallacy that only completely shut-down franchises are eligible for the Employee Retention Credit (ERC). In reality, franchises facing partial disruptions, such as reduced customer capacity or altered operating hours, can also qualify.

2. It’s a Credit, Not a Loan: The ERC is often mistakenly thought of as a loan that needs to be repaid. It’s actually a tax credit, offering direct relief without the obligation of repayment, distinguishing it significantly from loan programs.

3. Open Application Window: Many franchisees might not realize that they can still claim the ERC for wages paid up to a specific cut-off date. This extended period allows for a valuable opportunity to secure financial aid.

4. Profitability Is Irrelevant: There’s a misconception that only unprofitable franchises can benefit from the ERC. The credit is aimed at supporting employee retention during the pandemic, regardless of the franchise’s profitability.

5. Complexity Shouldn’t Deter You: The process of claiming the ERC may seem complex and daunting, but professional guidance can simplify it. Expert assistance ensures that franchisees can navigate the claiming process effectively, maximizing their potential benefits.

Understanding these points helps franchisees to better navigate the ERC, ensuring they don’t miss out on crucial support designed to help maintain their workforce and business operations through the pandemic and beyond.

How ERTC Express Help Franchisees Maximize ERC Benefits

If you’re feeling overwhelmed by the ERC process, you’re not alone. This is where ERTC Express steps in. This service is designed to help you, as a franchisee, to navigate the complexities of the ERC claim process and ensure you’re getting the maximum refund possible.

Think of ERTC Express as your navigator through the murky waters of tax credits. They’re equipped with the latest information and understand the ins and outs of the ERC, ensuring that your claim is accurate and compliant with IRS regulations.

Step-by-step Guide: How ERTC Express Optimizes Your Refund

Step 1: ELIGIBILITY

First things first, we need to determine if your franchise is eligible. ERTC Express will review your business’s operations during the eligibility period, looking at factors like government orders that may have affected your business and any significant changes in revenue. This step is crucial because it sets the foundation for your entire claim.

Step 2: PROCESSING

Once eligibility is confirmed, ERTC Express processes your claim by meticulously calculating the qualified wages for the credit. This includes wages paid during shutdowns and any wages paid during periods of revenue decline. We ensure that no eligible wage is left unclaimed.

Step 3: RECEIVE YOUR FUNDS

After your claim is processed, ERTC Express will guide you through the final steps to submit your claim to the IRS. Once filed, you can expect to receive your funds. While the timing can vary, ERTC Express stays on top of your claim, keeping you informed every step of the way.

With our expertise, you’re not just claiming a tax credit; you’re strengthening your business’s financial health.

Get Maximum Franchisee ERC Refund with ERTC Express

Franchisee have been hit hard by the pandemic, with many events canceled or postponed. If you own a franchise, you may be eligible for a sizeable ERC refund, and ERTC Express can help you claim it.

We understand the unique challenges your industry faces and have the expertise to navigate the specific nuances of your situation. With our support, you could secure a refund that helps your business bounce back stronger than ever.

• IRS Compliance: Adherence to the latest IRS guidelines ensures your claim is done right.

• Trusted by the AICPA: Recognized by the American Institute of CPAs for reliable tax services.

• U.S.-Based CPAs: Expert accountants who understand U.S. tax law inside and out.

• Power of Three – Audit Defense: Robust audit defense strategy if the IRS has questions.

• Refund Maximization: Strategies to maximize your ERC refund, ensuring you get every dollar you’re entitled to.

Opting for ERTC Express means teaming up with experts dedicated to your financial recovery. We lift the weight from your shoulders, enabling you to concentrate on managing your business while we take care of the financial details.

Frequently Asked Questions (FAQ)

What are the Specific Requirements for a Franchisee to Qualify for ERC?

For franchisees to qualify for the ERC, they must have experienced either a full or partial suspension of business operations due to government orders related to COVID-19 or a significant decline in gross receipts compared to 2019. Specific revenue decline percentages apply, so it’s important to review your financials closely.

How Does Owning Multiple Franchises Affect ERC Eligibility?

Owning multiple franchises can complicate the ERC eligibility picture. The aggregated group rules may come into play, meaning the financials and employee counts of all your franchises might be considered as a whole. This can affect the amount of credit you’re eligible for, so it’s essential to analyze each entity’s impact under these rules.

Owning multiple franchises can complicate the ERC eligibility picture. The aggregated group rules may come into play, meaning the financials and employee counts of all your franchises might be considered as a whole. This can affect the amount of credit you’re eligible for, so it’s essential to analyze each entity’s impact under these rules.

Can ERC be Claimed for Wages Paid in 2021?

Yes, the ERC can be claimed for wages paid in 2021. In fact, the eligibility criteria for 2021 were expanded, allowing more businesses to qualify. For franchisees, this means if you were in operation and experienced the required government-ordered disruptions or decline in gross receipts during 2021, you should look into claiming the ERC for that year.

Remember, the ERC for 2021 includes advancements such as the increase in the maximum credit amount per employee and the inclusion of more start-up businesses. So, if you haven’t already claimed or thought you weren’t eligible, it’s time to re-evaluate your position.

What Records Do Franchisees Need to Keep for ERC Claims?

Keeping accurate records is critical for a successful ERC claim. As a franchisee, you should maintain detailed payroll records, including the amount and dates of all wage payments, and any health insurance costs you covered for your employees. Additionally, keep documentation that shows how your business was impacted by COVID-19, such as government orders affecting operations or financial records demonstrating a decline in revenue.

These records not only support your claim but also protect you in case of an IRS audit. It’s not just about having the numbers; it’s about being able to prove those numbers are accurate and that your claim is legitimate.

How Can Franchisees Ensure Compliance in ERC Claims?

To ensure compliance in ERC claims, franchisees should closely follow IRS guidelines, which include accurately calculating qualified wages and adhering to the full and partial suspension rules. It’s also important to properly apply the aggregation rules if you own multiple franchises.

Seeking the help of a tax professional or a specialized service like ERTC Express can provide peace of mind. We’ll have the expertise to navigate the complexities of the ERC and help you submit a claim that’s both maximized for your benefit and compliant with the law.