According to research, the COVID-19 pandemic has cost the health and fitness industry over $30 billion in lost income. There has been a significant emotional and financial impact. Even though there is no way to undo what has already happened, Congress did enact the CARES Act and the Employee Retention Credit program to help. The Employee Retention Credit is a refundable tax credit offered by the IRS for 2020 and 2021 payroll taxes. Now that business owners may apply for the ERC and PPP, the majority of the fitness industry can receive tens of thousands of dollars in tax relief they were not previously qualified for.
ERC qualifying factors:
- Your company must have been established before February 2020.
- Your company must employ no more than 500 people.
- A minimum of one employee is required (you count as an employee if you are paid as the owner).
The ERC does not, unfortunately, apply if your company is completely new and you have no employees. Let us now address the remaining qualifications. You are eligible for ERC if any of the following statements apply to your company.
- At any point in 2020 or 2021, due to city, county, or state rules, you were forced to reduce capacity, cut hours, or shut down.
- In Q1 2021, your revenue was 20% lower than it was in Q1 2019.
- In Q2, Q3, or Q4 of 2021, you anticipated making 20% less money than you did in the comparable quarter of 2021.
- In a given quarter in 2020, your revenue was 50% lower than it was in the same period in 2019.
No matter how much money you make, you qualify for ERC if your big-box gym was forced to shift to 1:1 personal training or virtual training for any length of time. You also qualify for ERC regardless of revenue if you teach group classes and had to restrict capacity in 2020 or 2021 to uphold social distancing standards. Therefore, the majority of gyms and fitness centers around the nation are eligible for the Employee Retention Credit and will be receiving significant federal stimulus funds this year.
Have any questions? Our support team is here to help you with any questions or issues you might have. We take care of the hard work, so you never have to worry about it! Our team of professionals works to ensure that your company receives the full ERC credit it is entitled to. Contact us to find out more about ERC credits and how we can assist you.