Government-mandated business closures and stay-at-home orders drastically impacted businesses in all sectors of the economy — especially fitness centers. Unfortunately, we’re still feeling the pandemic upheaval from 2020, 2021, and well into 2022.
But there’s some good news. Companies who took out Paycheck Protection Program loans and lost revenue during 2020 and 2021 can recoup some of their losses with the Employee Retention Tax Credits, or ERTCs.
Here’s how our client in the Health and Fitness industry received over six figures worth of ERTCs for the tax year 2020.
The Problem
Our health and fitness client’s business in New Hampshire dealt with serious disruptions to their operations in 2020 due to government shutdowns.
They have 11 full-time employees, and the business was deemed non-essential in 2020. As a result, the company was forced to run at reduced capacity and saw a substantial decline in their gross receipts when comparing 2019 to 2020.
So, they took out a PPP loan. This initial loan was later forgiven.
Fortunately for our client, they did not experience disruptions to their business in 2021. But they were concerned about applying for ERTCs since their initial PPP loan was forgiven. They took a second draw on their PPP loan and wanted to preserve their ability to have that loan forgiven as well.
The C&A Solution
In addition to government shutdowns that disturbed our client’s operations, we identified capability restrictions and group gathering restrictions as additional qualifying measures that supported their eligibility for the employee retention credits.
We were able to obtain a total of $100,236 for our client while maintaining their ability to get their second PPP loan forgiven.
Punchline
No matter what industry you’re in, we’ve found that the vast majority qualify for ERTCs. Whether you’ve taken out an initial PPP loan, or have done a second draw, you can still explore your options for savings through the ERTC program.
Contact us online or by phone at (508) 797-5003 for more information on how we can help your business save on taxes.
