The Employee Retention Credit (ERC) program has proven to be a lifesaver for many small business owners, including restaurant owners, who were able to recover losses that resulted from the pandemic. Not to be confused with the Paycheck Protection Program, or PPP, the ERC is a refundable payroll tax credit for business owners who were negatively impacted by the pandemic. One of the CARES Act programs, the ERC was designed to assist business owners in retaining employees during the pandemic. The IRS pays out ERC funds, and they do not need to be paid back because they are not considered a loan.
Timothy’s owner Stephen Manns, who received the credit, says the money is “just sitting out there,” but many restaurateurs don’t realize that they may qualify—and that they can still apply for the credit retroactively up to three years after the original filing date. (For a 2021 tax return, for example, 2024 would be the deadline.) Manns wants other restaurant owners to know about the ERC and take advantage of the program.
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Manns used a service to help determine whether he qualified and to facilitate the application, which can be confusing. (The various services that assist business owners in applying for the ERC take a percentage of the total amount paid out.) There is also valuable information available online—for example, here. For an easy-to-understand summary of the ERC and who might qualify, check out this blog from SnackNation. The total amount per employee that a business owner can be refunded is $26,000; most literature on the program cites $11,000 as the average payout per employee. For many restaurant owners, that’s enough reason to do some initial investigating to see whether they qualify.
