Have you heard the phrase “ERC” being thrown about?
It stands for: Big Money Is On The Table For Your Business To Grab.
Ok, not really.
ERC stands for Employee Retention Credit.
But in all seriousness, it probably does mean tens of thousands of dollars in the form of a refund check for your business.
In fact, if you’re a gym or fitness business owner reading this, we’re nearly certain that your business is eligible to receive thousands of dollars back from the IRS.
In this blog post, we’re going to dive into why you may not have heard of the Employee Retention Credit (ERC) as of yet, and why your gym probably qualifies even if you don’t think it does.
Let’s dive in.
Watch Eric explain over on YouTube
What Is The Employee Retention Credit?
The Employee Retention Credit is a refundable tax credit from the IRS against certain payroll taxes in 2020 and 2021. It’s essentially more stimulus for your business to help those most affected by the impacts of COVID-19.
You can read more about ERC in our previous blog post here.
Think of it as PPP, but better, because you never have to worry about paying it back.
Why are you so certain my fitness business qualifies?
If you don’t want to stick around any longer, you can head straight to our Do You Qualify? Quiz to find out in 60 seconds if you qualify or not.
Otherwise, we’ll break down a few of the qualifying factors as simply as we can in a 800 word blog post.
- Your business must have been established before February 2020.
- Your business must have less than 500 employees.
- You must have at least one employee (if you pay yourself as an owner, you count!).
Those are the easy ones. Unfortunately, if your business is brand, brand new and you don’t have any employees, the ERC isn’t for you.
Now let’s tackle the remaining qualifiers. If ANY of the following points apply to your business, you qualify for ERC.
- You were forced to reduce capacity, reduce hours, or shut down at any point in 2020 or 2021 due to city, county, or state regulations.
OR
- You made 20% less revenue in Q1 2021 than you did in Q1 2019.
OR
- You are expecting to make 20% less revenue in Q2, Q3, or Q4 of 2021 than you did in the corresponding quarter in 2021.
OR
- You made 50% less revenue in a specific quarter in 2020 than you did in the same quarter in 2019.
Most gyms and fitness businesses we’ve dealt with have had to shut down or reduce capacity at some time or another in 2020 or 2021.
If you are a big box gym that was forced to convert to virtual training or 1:1 personal training for any period of time, you qualify for ERC, regardless of revenue.
If you run group-based fitness classes and were forced to limit capacity to maintain social distancing guidelines at any point in 2020 or 2021, you qualify for ERC, regardless of revenue.
As you can see pretty quickly, most gyms and fitness businesses across the country qualify for the Employee Retention Credit, and are eligible to receive big money from government stimulus this year.
Fitness businesses can receive up to $5,000 per employee for 2020 (calculated retroactively), and up to $28,000 per employee in 2021.
Depending on how many employees you have, that’s a lot of money in the form of a refund from the IRS.
We told you it was like PPP, but better!
Now, how can I get ERC for my business?
We’re not going to dive into the nitty gritty calculations of ERC in this blog post as they can get quite complex, however we’ve put together an FAQ guide that should answer most of your questions.
You can also read our “What The Heck is ERC?” blog post here.
But to make things even simpler, we’ll even go one step further.
At The Fitness CPA, we’ll calculate your ERC refund for free, no obligation to you.
That’s right! You’ll pay zero dollars to us and we’ll calculate your exact ERC savings for free.
What you decide to do with the information afterwards, is up to you!
If you decide to proceed with the refund, we’ll do all of the work on your behalf, and submit the final paperwork to the IRS. All you have to do is sit back and wait for the refund to hit.
How easy is that?
We can’t stress enough how important it is for fitness businesses and gyms to take advantage of the Employee Retention Credit, especially when members are still reluctant to come back.
If your gym or fitness business needs more cash, you’re not going to want to waste this opportunity.
You can learn more about the Employee Retention Credit on our main website, here.
Or if you have a question or concern, you can reach out to me personally at any time by filling in our Get in Touch page here.
In the meantime, we strongly recommend going ahead and getting your Free Calculation from our team.
Or simply finding out if you qualify first.
There’s truly nothing to lose!
Pssst… Have you checked out our Ultimate Guide To The Employee Retention Credit yet? You may find it useful to answer any questions you still have:
Until next time!
Fitness is such a big part of who I am. Maintaining a healthy lifestyle, eating well (mostly paleo), hiking, backpacking, mountaineering, practicing yoga and Crossfit are all important cornerstones of life. But I love ice cream and cookies too much to say no!
I love helping owners make sense of their business and finding ways to grow it. It’s an honor to help you see situations, scenarios and opportunities from all sides so you can make informed decisions.
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