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The hospitality industry is growing at a rapid pace; is your business prepared to handle the ups and downs of constant market fluctuations? StenTam can help ensure your business receives all the tax credits it deserves.
The COVID-19 pandemic wasn’t so welcoming for the United States hospitality industry. Many individuals here and abroad avoided travel — unless it was necessary for business — resulting in a nearly 40 percent drop in occupancy for hotels and vacation rentals. A slew of events and conferences were cancelled altogether, leading to an estimated loss of $20 billion.

To assist hospitality businesses and those in other industries financially affected by the pandemic, the U.S. government introduced the Employee Retention Credit (ERC). A refundable payroll tax credit included as part of the Coronavirus Aid, Relief and Economic Security Act (CARES Act), the ERC was created to encourage eligible employers to keep their employees on the payroll during the pandemic.

What does this mean for employers at hotels/motels, resorts, vacation rental businesses, convention centers, travel agencies and similar businesses? If your business is eligible, you can receive up to half of the qualified wages paid to your employees for the tax year 2020. For 2021, that percentage increased to 70 percent.

Government Orders

Example: Florida, March 19, 2020 – Miami Beach Mayor Gelber announced that all hotels in the city must be closed by 11:59 PM on Monday. The city is also implementing a curfew from midnight to 5:00 AM beginning on March 24. County officials stated they are considering county-wide hotel closures.

Find More Government Orders Specific to Your State on Our Insights Page

Check out these FAQs to learn more about qualifying and applying for the Employee Retention Tax Credit.

How Does the Employee Retention Credit Help Businesses in the Hospitality Industry?
The ERC offers myriad advantages for eligible businesses in hospitality industry, from improving cash flow to offsetting the cost of wages. When these employers experience a recovery in demand for their services, the ERC can provide the necessary funds to ensure they have the staff and resources to meet it.

Many hospitality employers had to implement new hygiene standards and protocols during the COVID-19 pandemic to ensure guest safety, often an expensive process. The ERC gives eligible businesses the opportunity to invest more in their operations, including the maintenance of such health and safety measures.

How Do I Know if My Hospitality Business is Eligible for the ERC?
Your business may be eligible for the ERC if its operations were fully or partially suspended by governmental COVID-19 orders, thereby limiting commerce, travel or group meetings. You might also be eligible if your business experienced a significant decline in gross receipts during 2020 or within the first three quarters of 2021. New startup businesses that began operations after February 15, 2020, may also qualify, regardless of revenue.

There are two main ways to be eligible for stimulus refunds:

  • If your business matches the required decline in revenue within any quarter of 2020 or 2021.
  • If you have W-2 employees.
For How Much of a Tax Credit Might My Business Be Eligible?
For 2020, the ERC is a credit against certain payroll taxes of 50 percent of the wages you paid — up to $10k per employee — from March 12 – December 31, 2020 (capped at $5k per employee).

For 2021, the ERC is a quarterly tax credit of 70 percent of the first $10,000 in wages per employee in each quarter of 2021 from January to September 2021 (capped at $7K per employee per quarter).

What Exactly Is a Significant Decline in Gross Receipts Under the Employee Retention Credit program?
The answer to this question varies from 2020 to 2021. An employer had a significant decline in gross receipts in 2020 during the first calendar quarter for if its gross receipts for that quarter were less than 50 percent of those for the same calendar quarter in 2019. An employer had a significant decline in gross receipts in 2021 during the first calendar quarter for its gross receipts for that quarter if they were less than 80 percent of those for the same calendar quarter in 2019.
When Does the ERC Program End?
The Employee Retention Credit expired in September 2021. But, qualified businesses, companies and employers can still file paperwork and retroactively receive claims for the ERC in 2023. How” By filing a Form 941-X for relevant quarters.

For all four quarters in 2020, the deadline to apply is April 15, 2024; for all quarters in 2021, the deadline is April 15, 2025.

How Do I know Which COVID-19 Governmental Orders Were Enacted in the State Where My Hospitality Business is Located?
We have a list of state-specific COVID-19 orders on the Insights page of our website. Just click on your state to see the applicable orders and restrictions.
Is the Employee Retention Credit the Same as the Paycheck Protection Program (PPP)?
No. Although both programs were developed to assist businesses struggling financially due to the COVID-19 pandemic, the PPP was a forgivable loan that provided small businesses with funds to pay up to eight weeks of payroll costs, including benefits, along with interest on mortgages, rent and utilities. The ERC is a refundable and non-refundable credit that eligible businesses can claim on qualified wages, including some health insurance costs, paid to employees.
How Do I Apply for the Employee Retention Credit?
As a hospitality employer, you must first determine your eligibility, making sure you meet IRS qualifications. To retroactively claim the ERC, amend previously submitted Forms 941 by filing and submitting Form 941-X for each qualifying quarter.

If this sounds confusing, that’s because it is – even for seasoned tax professionals. If you are unsure about how to file a Form 941-X amendment for the ERC credit or need assistance preparing and submitting your application, consider working with one of our experienced tax professionals. Here at StenTam, our tax specialists can guide you through the process and answer any questions you may have along the way. We even have resources that enable you to track your refund.  Contact us today to get started!

Qualifying orders (From IRS)

What kind of government orders qualify my business or organization for the ERC? (added July 28, 2023)
To qualify for ERC, you need to have been subject to a qualifying government order related to COVID-19 that caused a full or partial suspension of your trade or business operations. The government order may be at the local, state, or federal level.

Examples of governmental orders:

  • An order from the city’s mayor stating that all non-essential businesses must close for a specified time period;
  • A state’s emergency proclamation that residents must shelter in place for a specified period, except for essential workers;
  • An order from a local official imposing a curfew on residents that impacts the operating hours of your trade or business for a specified time period;
  • An order from a local health department mandating a workplace closure for cleaning and disinfecting.
Can I rely on a recommendation, bulletin or statement issued by a government authority to qualify for ERC? (added July 28, 2023)
No. To qualify for the ERC, you must have been subject to a government order that fully or partially suspended your trade or business.
Recommendations or statements encouraging you to take certain actions are not orders.
If you use a third party to calculate or claim your ERC, you should ask them to give you a copy of the government orders – not a generic narrative about an order. Read the order carefully and make sure it applied to your business or organization.
Is being subject to a government order enough to make me eligible for ERC? (added July 28, 2023)
No. You need to demonstrate that the government order was related to COVID-19 and that it resulted in your trade or business being fully or partially suspended.
What does it mean to be fully or partially suspended? (added July 28, 2023)
Whether your business or organization was fully or partially suspended depends on your specific situation. For examples, see Notice 2021-20, Part III, Section D.

Some examples of who doesn’t qualify under this eligibility factor:

  • If all your employees were able to telework during the pandemic and your business continued to operate, your business wasn’t suspended.
  • If your customers were affected by a stay-at-home order, but no orders applied to your business operations, you weren’t suspended.
  • If you voluntarily closed your business or reduced hours of operation, you weren’t ordered to suspend.

You could still qualify for ERC based on a decline in gross receipts even if you don’t qualify under suspension of operations due to government order.

Was my business or organization fully or partially suspended if I had a supply chain issue? (added July 28, 2023)
A supply chain issue, by itself, does not qualify you for the ERC.

The IRS provided a narrow, limited exception if an employer was not fully or partially suspended but their supplier was. However, it applied only when the employer absolutely could not operate without the supplier’s product and the supplier was fully or partially suspended themselves.

In addition to having the supplier’s governmental order, you will need to show that:

  • The government order caused the supplier to suspend operations,
  • You couldn’t obtain the supplier’s goods or materials elsewhere (regardless of cost), and
  • It caused a full or partial suspension of your business operations.

Why Work with StenTam?

Leverage your tax credits to impact your NOI, help sustain PAR, and grow your operations.

Our team of specialty tax associates, accountants, and lawyers is well-versed in the challenges that hotels, resorts, restaurants, bars, and entertainment venues face. StenTam helps hospitality clients navigate rising operational costs, irregular cash flows, and facilitate growth utilizing government tax incentives. Our hands-on expertise, combined with our proprietary tax tech technology, delivers fully compliant tax solutions at your service. Curious about how much money your hospitality business may be overlooking? Let the tax professionals from StenTam help you with all your tax credit needs.

Secure Technology

Our proprietary software enables you to securely transfer information to our team with every transaction.


Never skip a beat: working with our multidisciplinary team means your claim is prepared within the program guidelines.

Risk-Free Filing

Each claim receives the appropriate documentation and audit ready file. StenTam is your long-term solution, and will help you defend your claim should there be an inspection.

Client Case Study

Lucky Little Chapel

"Quick professional easy to work with!" - Rachel Sneed

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Lucky Little Chapel

Lucky Little Chapel

"Quick professional easy to work with!" - Rachel Sneed

Read More
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