Is My Restaurant Eligible for the Employee Retention Credit?

In the early days of the pandemic, restaurants that were hit hard by the pandemic turned to the Payment Protection Program (PPP) and the Restaurant Revitalization Fund (RRF) program for much-needed assistance.

Although the PPP and RRF programs no longer accept applications, restaurant owners can still use the Employee Retention Credit (ERC) to claim substantial tax refunds. This is a tremendously valuable program that offers a refund for wage taxes paid when COVID restrictions and mandates were at their peak. 

Many restaurants have already claimed their ERC refund. If you haven’t, then read on to determine if your restaurant may qualify for ERC.

Does your restaurant qualify for ERC?

Restaurants could qualify to get a significant refund of up to $26,000 per full-time W-2 employee kept on payroll during the pandemic based on the below criteria:

Loss of revenue in any quarter of 2020

You can qualify if your business experienced a loss of 50% or more in any quarter of 2020 in comparison to the same quarter in 2019. 

Loss of revenue in any quarter of 2021

You can qualify if your business experienced a loss of 20% or more in any of the first three quarters of 2021 in comparison to the same quarter in 2019. 

Operational disruptions in 2020 or 2021

Even if your restaurant did not suffer revenue decline, you may still qualify for the ERC due to operational disruptions. Some examples of operational disruptions caused by COVID may include:

• Seating capacity restrictions due to social distancing mandates
• Unable to allow patrons to dine-in
• Curfews or limitations on business hours
• Restrictions on public gatherings such as weddings and conferences

Can I receive ERC if I have received PPP and RRF funds?

Businesses that received PPP may still be eligible for ERC, even if they also took RRF.  While it is a complex credit and a lot will depend on the qualification criteria and other factors, restaurants that accepted these other forms of government assistance are still eligible.

What Omega offers

Covid caused many restaurants to suffer, but your business can still take advantage of valuable employee retention tax credits. Even if your restaurant wasn't completely shut down and even if you received PPP loans and RRF grants, you may still be eligible for these credits. Many restaurant owners have received outdated information from accountants, CPAs, and tax preparers or have been misinformed about their eligibility status . The ERC is a complex tax credit that should be left to ERC specialists or financial and tax credit experts with several years of experience. 

At Omega, we have experienced ERC experts who can determine if your company may be eligible for the ERC tax credit in a free 10-minute consultation call. Additionally, we can take care of the entire filing process for you — all you have to do is submit the necessary documents and let Omega do the rest. We will also provide you with an audit protection document that illustrates exactly how you qualified for the credit. This will be important information to have in the case of an IRS audit down the road. The document provides a calculation summary and substantiates your eligibility. It is a confidential report shared only with you, the client. 

At Omega, we never cut corners when filing your ERC tax credit. We believe that doing a thorough job at the outset will save you time and money in the long run. We have helped several restaurants claim their ERC refunds and can help you too. And if you need financial support immediately and can't wait six to nine months for the IRS to refund your credit, our team can provide a bridge loan based on your expected ERC refund. 

Learn more about the benefits of the Employee Retention Credit for restaurants and receive guidance from one of our tax credit experts. Sign up here to get started!

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