If you’re anything like our current clients, you’re probably skeptical of just how much you can get back in tax refunds and credits from the Employee Retention Credit.
These are real numbers!
More importantly, these are real amounts of cash being received by fitness businesses and gyms across the country thanks to the Employee Retention Credit.
On average, The Fitness CPA clients received $57,000 in cash through the Employee Retention Credit, and the program isn’t over yet!
So, what is the Employee Retention Credit and how much can you get back as a fitness business owner?
That’s what we’ll answer for you with this blog post.
Let’s dive in.
“We are potentially receiving $365,000! We were shocked… and still are. I still don’t believe we are actually receiving this much in refund checks and credits. Eric and his team spent countless hours researching these credits and performing the work for clients. The Fitness CPA is one step ahead and provides great value for clients.”
Billy Macaulay Title Boxing Club
“We’re getting $88,233 back. Wow!!! I love The Fitness CPA. There’s no other explanation than that. They go above and beyond, and if it wasn’t for them, I honestly don’t know where I would be for the books, taxes, and everything!”
Evan Myers, Anytime Fitness
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 you navigate the consequences of COVID-19. You can read more about ERC in our previous blog post here.
While previously not so relevant due to its clash with PPP funding, retroactive changes in legislation have brought the Employee Retention Credit, or ERC, back to the forefront for those most affected by COVID (that’s you!).
As of December 2020, you can receive the Employee Retention Credit for your business even if you took funding from the Paycheck Protection Program (PPP) as well.
This means thousands of dollars for your fitness business are up for grabs.
How much cash can I really receive for my business?
So, let’s get to the thousand-dollar question:
“How much money can I really receive from ERC?”
And the answer is, ‘it depends’ (of course).
Here’s a table based our experiences at The Fitness CPA to give you an idea:
|$30,000 – $60,000||Single Boutique Fitness Studio (Per Location)|
|$60,000 – $180,000||2-3 Location Grouping|
|$250,000 – $400,000+||Large Facility (Large Gym or Racquetball Club with 50-100+ Employees)|
|$800,000 – $3,000,000+||5 or More Multi-Unit Grouping of Studios or Larger Facilities|
How do you know how much you will get back?
Here’s a simplified calculation:
- Every business is eligible for up to $5,000 per employee for 2020, and
- Every business is eligible for up to $28,000 per employee for 2021.
As an example, if you have 5 employees including yourself as an owner, that means your business could earn up to $165,000 back in tax credits!
However, there are a few factors to consider, and the amount of money you’ll actually receive depends on your unique business situation.
Factors to consider include:
- How many months your business was subject to city, county, or state regulations that reduced your capacity or completely shut down operations
- Which quarters in revenue decreased by 50% or more in 2020 compared to 2019
- Which quarters in revenue decreased/are decreasing by 20% or more in 2021 compared to 2019
- Which wages you used PPP funding for during 2020 and 2021
There are additional factors to take in, such as how many months after a qualifying quarter it took the business to recover, but we’ll leave the more complex factors to the calculations themselves. (These calculations are tricky for even the most qualified accountants.)
And there are a few criteria that can disqualify you altogether:
- If you don’t have any employees (and you don’t pay yourself a wage as an owner), you are not qualified for ERC.
- If you have more than 500 employees, you are not qualified for ERC.
Curious if your fitness business or gym qualifies for ERC?
You can find out if you qualify in 60 seconds or less with our Do You Qualify quiz:
So, How Do I Receive This Cash?
First, you’ll need to find an accounting team with experience in Employee Retention Credits to calculate an accurate proposal for you.
Unfortunately, this might be harder than you’d think.
We spoke about why most accountants aren’t across ERC as well as you’d hope in our blog post here.
In short, the calculations are much trickier than they seem, and the work involves going back and amending all previously submitted tax returns for 2020 and 2021.
It’s no wonder many accountants are staying well clear!
However, after seeing so many of our clients get their cash-in-hand from this credit, we decided to go all in on ERC at The Fitness CPA.
Since March 2021, our staff has invested thousands we’ve invested thousands of hours in finding the most strategic ways to retroactively claim the tax credit in combination with PPP, and maximize the savings for our clients.
And now, we’re opening our doors to help all gym and fitness studio owners – whether you’re a client or not.
If you are a fitness business or gym, we will calculate the tax credit for your business at zero cost to you.
There is nothing to lose!
Once you receive your free calculation, you can either proceed with the work or jump out at any point. It’s truly no obligation to you.
As mentioned, we’ve helped our clients obtain $57,000 on average so far, and 2021 isn’t over yet. You can read what they have to say here.
If you decide to go ahead with the work, after finding out exactly how much you’ll receive, we’ll handle everything in its entirety from our end and submit the final paperwork to the IRS.
And in a little bit, you’ll receive a refund check from the IRS. It’s that simple!
And to get started, we’ve made it pretty easy. You can see if your business qualifies by taking our quick qualifying quiz here.
Or, you can jump straight into the calculations and we’ll calculate your ERC for free.
As you can see, we’re pretty excited about the Employee Retention Credit. In fact, we can’t believe just how much money is up for grabs right now in terms of small business stimulus.
The Employee Retention Credit is bringing much-needed relief to so many fitness businesses and gyms struggling financially post-COVID-19, and we’re just here to help.
You can also learn more about the Employee Retention Credit on our main website, here.
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.
We will be producing more content about the Employee Retention Credit soon, so we strongly recommend signing up for our blog for more information as it comes out.
- What is a Deemed Election and How Does it Affect Your Employee Retention Credit Refund? - August 15, 2023
- Paying Workers: Employees vs. Contractors for Gyms & Fitness Businesses? - March 28, 2023
- 3 Employee Retention Credit Tips You’d Pay a CPA For - March 6, 2023