The Window Remains Open in 2023 for Hotels to Benefit from the Employee Retention Credit (ERC)

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This often-overlooked credit has the potential to offer a lifeline to struggling businesses, including hotels and motels, by allowing them to recover up to $26,000 per worker.

Among the many sectors hit hard by the Covid crisis were hotels and motels, which faced unprecedented challenges due to travel restrictions and plummeting demand. As a response to the economic turmoil, the U.S. government introduced the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), a comprehensive relief package that included a crucial provision known as the Employee Retention Credit (ERC). This often-overlooked credit has the potential to offer a lifeline to struggling businesses, including hotels and motels, by allowing them to recover up to $26,000 per worker.

ERC Guaranteed, a specialized consultancy, has emerged to guide hotels, resorts and motels through the complexities of claiming this credit, ensuring they secure their entitled benefits.

The ERC: A Resilience-Boosting Tax Credit

The Employee Retention Credit (ERC) stands as a refundable tax credit designed to aid employers during periods of the COVID-19 pandemic. It reimburses a percentage of wages paid to certain employees, and though its significance is often underestimated, it forms a cornerstone of the federal government’s response to the crisis. Among the businesses eligible for the ERC, hotels and motels occupy a vital place.

Here are four essential aspects hotel, resort and motel owners should know about the ERC:

  1. Extended Relief Period: The ERC covers a substantial duration, spanning the final three quarters of 2020 and the initial three quarters of 2021. This means hotels and motels have the opportunity to apply for the credit for a total of six quarters.
  2. Maximum Benefit per Employee: The actual refund amount under the ERC is contingent on various factors, but the peak benefit stands at an impressive $26,000 per employee. Notably, ERC Guaranteed has facilitated numerous companies in obtaining significant six-figure tax refunds.
  3. Compatibility with Other Relief Programs: If your hotel or motel has already secured funds from the Paycheck Protection Program (PPP), you can still avail yourself of the ERC benefits. These programs operate independently, granting eligible businesses multiple avenues of support.
  4. Application Necessity: Unlike an automatic disbursement, hotels and motels must actively apply for the Employee Retention Credit. This proactive step ensures that they receive the full and rightful tax refund.

Qualifying for the ERC as a Hotel or Motel Business

The hospitality industry encountered an unprecedented setback in the wake of COVID-19. As data from the American Hotel & Lodging Association (AHLA) reveals, virtually every hotel across the country experienced significant drops in occupancy rates. In such a context, the ERC emerges as a critical economic tool for the sector. But what exactly determines eligibility for the ERC?

There are two primary pathways through which hotels and motels can qualify:

  1. Substantial Revenue Decline: A business can qualify for the ERC if it experienced a significant loss of revenue during the pandemic.
  2. Government Order Restrictions: Even in the absence of a revenue decline, hotels and motels can still qualify by being subject to government-issued orders that led to partial suspensions of their operations.

Leveraging the ERC for Recovery

The ERC isn’t confined to the past; the window for applying for both 2020 and 2021 still remains open for hotel and motel owners even as we move into the final months of 2023. Even though the credit covered six quarters, it’s not too late for hotels and motels to claim the benefits. The federal law extends a three-year timeframe for submitting revised documentation to ensure businesses can access the Employee Retention Credit. This provides an extended opportunity for hotels, resorts and motels to capitalize on this valuable financial support.

Unlocking Maximum Benefits

ERC Guaranteed specializes in facilitating hotels and motels to seamlessly navigate the application process for the ERC, unlocking their maximum potential refund. In a time when the hospitality and tourism industries grappled with immense challenges, ERC Guaranteed emerged as a beacon of support. Their unique services include:

  • Comprehensive Assessment: ERC Guaranteed offers free, thorough case evaluations to hotels and motels, addressing any queries or concerns related to ERC application.
  • Precise Refund Calculation: Calculating the ERC involves intricate complexities, which ERC Guaranteed handles expertly. They employ a proprietary system to compute the credit, ensuring businesses know their exact eligible amount.
  • Application Support: The ERC application process can be daunting. The seasoned ERC specialists at ERC Guaranteed guide hotels and motels through every step, simplifying the complex process.
  • Timely Benefits: Recognizing the urgency, ERC Guaranteed aims to expedite the refund process, often resulting in businesses receiving their payments within seven days. This aligns with the structure of the ERC, which involves potential disbursement in up to six checks from the federal government.

The Employee Retention Credit (ERC) offers a significant avenue of support for hotels and motels that have weathered the storm of the COVID-19 pandemic. ERC Guaranteed stands as a dedicated partner, equipped with the knowledge and expertise to help businesses secure their entitled ERC benefits. With a thorough understanding of the program’s intricacies, ERC Guaranteed aids the hospitality industry in maximizing their financial recovery, turning the ERC into a catalyst for rejuvenation and growth. For hotel and motel owners seeking assistance in navigating the ERC landscape, contacting ERC Guaranteed could be the first step towards unlocking a brighter future.

Disclosure: ERC Guaranteed is an affiliate marketing partner. This post contains affiliate links, which means that Hotel Technology News receives a commission if you utilize this partner solution.