Posted by New York Employee Retention Tax Credit (ERTC) for Restaurants, Caterers and Event Planners Is Magic Money for These Small Businesses
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Covid-19 swept everything in its way, whether businesses, offices or economies. New York’s restaurants, caterers and event planners were no different. If you own a New York business, you know exactly what we are talking about. The loss or decline in your business revenue, the dilemma of retaining employees amid financially challenging times, etc. Good news, there is still a limited opportunity to recover from your business decline in 2020 and 2021. The federal Employee Retention Tax Credit (ERTC) is designed to aid those restaurants, caterers and event planners who have struggled during the Covid-19 pandemic. It is a program provided by Congress under the CARES Act. Let’s see what ERTC is about and how to claim it for your New York restaurant, catering or event planning business.
Covid-19’s Impact on New York’s Restaurants, Caterers and Event Planners
There are 3,172 catering businesses in New York alone. The caterers in the NY industry are expected to grow to $1.82 billion over the next five years compared to 2023. In Feb 2021, catering halls in New York were shuttered for months and then limited to parties under 50 people. Weddings, parties, family gatherings, corporate holiday events, and other celebrations were getting canceled. The bread and butter (no pun intended) of caterers, restaurants and event planners disappeared. After some time, caterers were allowed to cater to limited numbers of people in one place under certain conditions.
In Nassau County in New York State alone, 80,000 jobs were lost in the catering industry. Similarly, the National Association for Catering and Events surveyed more than 3000 members at the pandemic start and found that more than 75% had already suffered personal financial hardship through business closures, layoffs, and reductions in pay or employment hours.
Open Table has listed over 8000 restaurant businesses on its website from the five boroughs of New York City. These don’t include all the ones available in NY. But still, these were all affected due to Covid-19. Even the Federal data indicated that overall employment in the hospitality sector, comprising restaurants, bars, etc., fell to 23% during the pandemic, outpacing every other industry. It is essential to understand that a small-to-medium New York restaurant, caterer or event planner can easily get a tax credit rebate by applying on time and following the correct protocol, namely the Employee Retention Tax Credit (ERTC).
Get to Know ERTC for New York Restaurants, Caterers and Event Planners!
The Employee Retention Tax Credit (ERTC) is a refundable tax credit awarded to employers who suffered economic hardship during the Covid-19 pandemic. It was an act by Congress and is a grant, not a loan. It does not need to be paid back. It is a refund. The claimed credit, once approved, can be used to help New York restaurants, caterers, or event planners cover their payroll costs and certain other expenses which they experienced during the Covid years of 2020 and 2021.
The thing to note here is that a New York hospitality business can still claim the ERC in 2023, even if they already claimed the Paycheck Protection Program (PPP). But they should qualify for it first. So, what allows a New York restaurant, catering or event planning business to successfully claim the ERTC? The answer to these two questions matters a lot to be eligible for an ERC claim:
- Did you suffer complete or partial business suspension due to a government order linked to COVID-19?
- Did your gross receipts decline by 20% or more in any quarter compared to the previous year’s gross receipts for the same quarter?
- There are some other ways to qualify as well, but they are too convoluted to go into detail here. This is where the pros come in!
With many facts and figures for different durations of 2020 and 2021, the result is that you get a total refund of up to $26,000 per employee kept on your payroll. Remember! There is a time limit for claiming ERTC, and many New York restaurants, caters, and event planners are still unaware that they can claim a tax credit refund for their Covid-19 losses. Qualifying for the 2020 ERC means that the statute of limitations to apply does not close until April 15, 2024, and the statute of limitations to apply for the 2021 ERCs does not close until April 15, 2025.
How To Ensure ERTC Approval for Your New York Restaurant, Catering or Event Planning Business?
ERTC claiming requires much time and expertise, which traditional accountants might not be interested in helping with because of the cumbersome process of applying for the credits. You must also stay abreast of the latest tax or regulation amendments regarding Employee Retention Credit (ERC).
ERTCDeluxe provides your business the best chance to get ERTC approval with their dedicated CPA teams, who prepare your necessary documentation with minute detail and follow up efficiently. You get the benefit of THE POWER of 3, where 3 different competent CPA teams cross-check your claim before applying it to the IRS. No upfront fee is demanded till your credit claim gets approved. You also get a quick free assessment in only 15 minutes with ERTCDeluxe as your trusted, valuable ERTC partner.