Employee Retention Tax Credit

Employee Retention Tax Credit

Did your gym encounter any financial hardships during 2020 or 2021 due to supply chain disruptions or Covid restrictions?
 
If so, your business  may be eligible to take advantage of the Employee Retention Tax Credit with the IRS! To help you understand all the eligibility requirements, RhinoFit has teamed with the Payroll Vault to help guide you through the qualification process! Below are some of the requirements for this credit.
 
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Employee Retention Tax Credit (“ERTC”)
 

Overall Eligibility

  •  Businesses that had supply chain disruptions (e.g. increased material prices, delivery delays, labor constraints, etc.) or had to change their business/operating models due to Covid restrictions/effects.

2020 Eligibility

  • Businesses that had less than 100 employees in 2019.
  • Businesses that had a partial or total business closure due to federal, state or local order,
  • OR a more than 50% reduction in gross revenue compared to the same quarter in 2019. Businesses are eligible until the end of the first quarter where their revenues go back up over 80% compared to the same quarter in 2019.
The credit available for 2020 is 50% of wages up to $10,000 per employee for a maximum credit of $5,000 per employee for the year.
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2021 Eligibility

  • Businesses that had less than 500 employees in 2019.
  • Businesses that had a partial or total business closure due to federal, state or local order,
  • OR a more than 20% reduction in gross revenue compared to the same quarter in 2019.
For 2021, the maximum credit is 70% of wages up to $10,000 for a maximum credit of $7,000 per employee per quarter for the first three quarters of 2021 – so a total maximum credit of $21,000 per employee for 2021 during a qualifying quarter.

Recovery Startup Business Eligibility

  • Businesses started after 2/15/2020.
  • Annual revenues less than $1,000,000.
  • Not otherwise eligible under shutdown or revenue reduction eligibility requirements.
The maximum credit is 70% of wages up to $10,000 for a maximum credit of $7,000 per employee per quarter capped at $50,000 per quarter for a Recovery Startup Business. Q3 and Q4 2021 are eligible.
 

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