Generally eligible based on shutdowns and other capacity restrictions for doing business. Frequently eligible because of decline in receipts.
Businesses in the entertainment industry were some of the most affected by the COVID-19 pandemic and all the government-mandated restrictions that came with it. Social distancing requirements, capped ticket sales, and most obviously, partial or full shutdowns, made it difficult for theatres, performing art centers, and other entertainment businesses to survive.
Fortunately, many of these entertainment businesses can still qualify for the Employee Retention Credit (ERC). ERC is part of the 2020 CARES Act and can provide some financial relief of up to $26,000 per employee for paid wages.
If you are the owner of an entertainment business that was affected by COVID mandates and wonder about your ERC eligibility, consult with a licensed Certified Public Accountant (CPA) at Strategic Tax Planning. You can call us for a free consultation at (202) 455-6010 or fill out our contact form, and we will reach out to you.
Speaking with a trusted CPA will help to give you the best understanding of whether your entertainment business is eligible for ERC. Although every entertainment business is unique and went through different experiences, many faced mandated restrictions, or at least saw a decline in ticket sales.
If your business has W-2 employees, it typically needs to fall into at least one of the following two categories in order to be eligible to receive ERC:
Government mandates may include a variety of restrictions, such as partial or full shutdowns, social distancing requirements, capped ticket sales, or requirements of remote work, among many other things.
Additionally, some of these entertainment venues or businesses may have received the Paycheck Protection Program (PPP) loans in 2020 or 2021 and wonder how that may affect their ERC eligibility. Regardless of whether your business received PPP 1 and/or 2, you may still be eligible for ERC.
Many business owners wonder whether their business is considered entertainment and eligible for the Employee Retention Credit. Assuming you meet the eligibility requirements listed above, nearly any kind of business may be eligible. Common examples of businesses in the entertainment industry include:
Business owners who have already filed for Employee Retention Credit are probably wondering when they can expect to receive the tax credit. With such a large number of businesses being affected by the pandemic, the IRS has a high volume of applications to process. Every case is different and will have a unique timeline. Your refund could be processed in about 8 months, although it may take longer.
If you wish to check the status of your refund, you may call the IRS, or use the “Where’s My Refund?” feature on the IRS website.
For many businesses and venues in the entertainment industry, ERC can be a great financial relief, but it is important to make sure you and your tax planners are diligent and thorough when examining your eligibility. It is critical to note that the IRS will carefully examine your claim for this credit. Submitting false ERC claims can lead to compliance risks such as ERC audits in the future, setting up a potential disaster.
Strategic Tax Planning’s experienced tax professionals and CPAs will work closely with you and your entertainment business, ensuring all of your ERC qualifications and facts are accurate and in order. We are here to help you receive your deserved relief for persevering during difficult financial times.
If you are a business owner and wonder if it may be eligible for ERC, reach out to Strategic Tax Planning for a free consultation with a licensed CPA. You can call us today at (202) 455-6010 or submit your information in this contact form, and we will call you.
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