What the Heck is the Employee Retention Credit (ERC)?

We know what you’re thinking (and many of our clients thought it too!):

“Is the Employee Retention Credit real? This seems too good to be true.”

We promise: it is real, and it’s not too good to be true.

On average, our clients at The Fitness CPA have received $57,000 in cash through the Employee Retention Credit, and 2021 isn’t over yet!

Here are just a few of their own words here:

“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 M. Anytime Fitness
“$49K !!!! When The Fitness CPA first reached out and told us about a credit, we were anticipating maybe 10-12K, so we were shocked in the best way when we found out how much we were actually going to get back. I would have missed out on nearly $50,000 if it had not been for this extra and PROACTIVE work The Fitness CPA team did for us. I cannot show enough gratitude and appreciation. Thank you!” – Meaghan K. WESTCA Gym

But, wait. Let’s rewind for a minute. What is the Employee Retention Credit?

That’s the question we hope to clear up for you. Let’s jump in.

Skip ahead if you’d like:

· Unprecedented times
· What is the ERC?
· So, what are the new rules?
· Why haven’t I heard about it before?
· How do I get the most money back?
· How do I apply?
· Get your free calculation

Unprecedented Times

Between PPP, EIDL, and now the Employee Retention Credit (ERC), there is a lot of money at stake in terms of government funding – we are really in unprecedented times. In fact, we’ve never seen anything like it in all of our years in practice.

And just between us, we really don’t think Congress knew what they were doing when they passed this law, and the degree to which it would help small businesses in need.

Nonetheless, there is a lot of cash up for grabs for your gym or fitness business until the end of 2021, and we want to help you get it.

So, 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 the nitty gritty details here.

And it’s actually not that new – it came out as part of the original CARES Act passed back in March 2020.

However, back in March 2020, businesses had the option to take the PPP funds OR take the Employee Retention Tax Credit (ERC). In virtually every case, it made much more sense for a business to take the PPP funds.

However, fast forward to 2021, and the rules have changed.

So, What Are The New Rules?

As of December 2020, the IRS made a change to the Employee Retention Credit program to say that you can now retroactively claim the ERC all the way back to March of 2020 AND claim it in combination with the PPP funds you’ve likely already received.

The only stipulation to the change is that any payroll wages paid with the PPP funds are not eligible for the tax credit. So, you can imagine the calculations that go into deciphering between the two will take up quite a bit of room in Excel.

However, the results are worth it.

As mentioned, our clients have received an average $57,000 back in cash from the Employee Retention Credit already. And they don’t have to pay it back. Unlike the Paycheck Protection Program, this is not a loan!

As long as you meet a few easy requirements, you are qualified to receive thousands back in cash.

Find out if you qualify in 60 seconds with our quick questionnaire

Why Haven’t I Heard About ERC Before?

If you happen to know any accountants, you’ll know that change usually spells ‘headache’ when it comes to navigating new processes.

It’s like changing the rules in the middle of playing a game, except the game now comes with new calculations, documentation, and retroactive tax return amendments.

This is why a lot of CPAs and accountants are steering clear of this area, and why you may not have heard about the Employee Retention Credit as of yet.

Navigating the ins and outs of the Employee Retention Credit are complex, especially if your business took advantage of the Paycheck Protection Program (PPP) in 2020.

And quite frankly, it’s a lot of work to go back and amend every tax return for 2020 and 2021 that you’ve already spent a lot of time submitting!

So, How Do I Get The Most Money Back?

We’re not going to lie – getting the Employee Tax Retention right, in terms of doing it correctly while maximizing the amount of money you get back, is difficult for even the most experienced accountants.

It takes a lot of practice.

Here at The Fitness CPA, our entire team of accountants have spent months investing their time into finding the most strategic ways to maximize the amount of money that our clients can receive back.

To oversimplify the calculations: businesses are eligible for up to $5,000 per employee for the entire year of 2020, and up to $28,000 per employee for 2021, if qualified.

The amount of tax credit you actually receive will take into consideration any PPP funds you took, the number of quarters you saw reduced revenue, and your specific city, county and state regulations regarding COVID restrictions.

We won’t dive into the nitty gritty details of the work involved on this post, but just know that we’ve found the best way to retroactively claim the tax credit in combination with PPP for each quarter of 2020 and 2021 through a lot of research and finagling of the numbers.

Ok, I’m sold. What next?

Now that we’ve turned a corner on tax season, The Fitness CPA is opening our doors to help new businesses claim their refund back.

We will calculate tax credits for any gym or fitness business – whether you are a client of ours or not – at zero cost.

How it works is simple.

We will ask you for a few documents (like revenue statements and payroll reports) and we will get to work calculating exactly how much money you could receive back.

Once you receive the free calculation, you can either proceed with the work, or jump out at any point. It’s truly no obligation to you.

And this isn’t a sales pitch!

We just really want to help as many fitness businesses as possible, especially through this challenging time.

We love this industry, and the government money is there for the taking. Why not help as many businesses as possible access it?

If you’d like to see how many thousands of dollars you can receive back for your gym or fitness business, get started with your free calculation here.

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 to our blog for more information as it comes out.

Until then!

Calculate Your Employee Retention Credit – For Free!

Pssst… Have you checked out our Ultimate Guide To The Employee Retention Credit yet? You may find it helpful to answer any questions you still have:

Download Guide

Author
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Eric Killian

CPA & Founder | Accountant, husband, father, mountaineer.
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.

Employee Retention Credit (ERC)