ERC for Motels

Motels, B&Bs, hotels, etc. had to decrease their occupancy to comply with social distancing regulations. They qualify for ERC due to restrictions on alcohol sales and operation hours, particularly because many of them have in-house restaurants and bars. Some faced challenges with suppliers as a result of government mandates. Consequently, these establishments suffered substantial revenue losses in 2020 and 2021, which could be attributed to both the shutdowns and mandates as well as travelers' wariness of staying in motels during the pandemic.

The Employee Retention Credit (ERC) presents a significant opportunity for relief to businesses affected by the COVID-19 pandemic, with the potential for up to $26,000 per employee during the years 2020 and 2021. Eligibility for the ERC can be determined by actual closures, restrictions imposed by government orders, or by demonstrating a reduction in gross receipts of 50% or a 20% decline in gross receipts for specific quarters in 2020 and 2021, compared to the same quarters in 2019. It is important to note that the ERC can still be accessed even if a business has already received PPP loans, and newly established businesses after February 2020 may qualify for up to $100,000 in refundable credits in 2021 under specific ERC provisions.

While it's unclear if Congress will extend other pandemic relief for motel owners, the ERC remains available now. The government restrictions have impacted various business operations in the motel industry and you could be one of the many employers entitled to significant cash benefits. Don't miss out on the opportunity to see if your motel qualifies for the ERC. Contact us today!