Breweries Can Still Find Relief from the ERC

The COVID-19 pandemic has had a significant impact on the hospitality industry, including breweries. In response to the pandemic, the US government has implemented various financial relief programs to support businesses, including the Employee Retention Credit (ERC). The ERC is a refundable tax credit that provides financial assistance to eligible employers who have been adversely impacted by the pandemic, and breweries are among the businesses that can benefit from this credit.

Breweries have been particularly affected by the pandemic because of the restrictions on indoor dining and drinking. Many breweries were forced to close their taprooms and limit their operations, resulting in reduced revenue and employee layoffs. The ERC can provide financial relief to breweries and help them retain their employees during these challenging times.

To be eligible for the ERC, breweries must meet certain criteria. Firstly, they must have experienced a full or partial suspension of operations due to a government order related to the COVID-19 pandemic, or they must have had a significant decline in gross receipts. Secondly, they cannot claim both the ERC and Paycheck Protection Program (PPP) loan forgiveness for the same payroll expenses. If a brewery meets these criteria, they can claim the ERC on their Form 941, the Employer’s Quarterly Federal Tax Return.

The ERC is calculated based on 50% of qualified wages paid to eligible employees, up to a maximum credit of $5,000 per employee for 2020, and up to a maximum credit of $26,000 per employee for 2021. The credit is fully refundable, which means that if the credit exceeds the amount of payroll taxes owed, the excess can be refunded to the brewery.

The ERC can provide much-needed financial assistance to breweries, allowing them to retain their employees and keep their businesses operational during the pandemic. In addition, it can help breweries to avoid employee turnover, which can be costly in terms of recruitment and training. By retaining their employees, breweries can maintain the quality of their products and services, and position themselves for a successful recovery as the pandemic subsides.

In conclusion, breweries are among the businesses that can benefit from the Employee Retention Credit. The credit can provide financial relief to breweries affected by the COVID-19 pandemic, helping them to retain their employees and keep their businesses operational. If you own or operate a brewery, it is important to explore your eligibility for the ERC and take advantage of this financial relief program.