California hotels, resorts, hospitality, and leisure travel businesses in CA that were impacted financially by the COVID pandemic automatically qualify certain periods of time for the employee retention tax credit refund.
When California tourism and travel was shut down, then limited capacity when reopened, hospitality and leisure, accommodations, motels, California lodging, casinos and other related California hotel related companies suffered during 2020 and 2021 in CA.
The California economy dropped substantially during the pandemic that left many hotel industry employees in CA out of work due to closures. Job openings and labor turnover in California is still evident with 1,251,000 job openings in CA
In CA, some of the main hotel and travel destinations for California cities include Bakersfield, Chico, El Centro, Fresno, Hanford, Los Angeles, Anaheim-Santa Ana-Irvine, Los Angeles-Long Beach-Glendale, Madera, Merced, Modesto, Napa, Oxnard, Redding, Riverside, Sacramento, Salinas, San Diego, San Francisco, Oakland-Hayward-Berkeley, San Francisco-Redwood City-South San Francisco, San Rafael, San Jose, San Luis Obispo, Santa Cruz, Santa Barbara, Santa Rosa, Stockton, Vallejo, Visalia, Yuba City.
Maybe your California accountant or tax preparer told you that your CA hotel resort did not qualify for the employee retention tax credit in California? Probably they are wrong and are not up to date on current IRS guidelines for the employee retention credit that will qualify your hotel in California for the ERC tax refund.
See how your California Hospitality and Leisure business qualifies for the IRS Employee Retention Credit Tax Refund for your hotel and lodging business in CA. Schedule Your Free California Hotel ERC Consultation.
California Employee Retention Tax Credit for Hotels, Resorts and Hospitality Industry in CA
California hotels, resorts, and other hospitality, travel, accommodation, and leisure related businesses in CA are eligible to claim the Employee Retention Credit (ERC). They can receive up to 50% of their qualified wages paid between March 12th, 2020, and December 31st, 2020, in the form of a refundable tax credit from the IRS.
California lodging businesses that were established before February 15th, 2020, can receive a refundable tax credit amounting to 70% of qualified salaries and wages paid between January 1st, 2021, and September 30th, 2021. For CA hotels or motels started or acquired after that date (referred to as a Recovery Start-up business), they are eligible for employee wage reimbursement up until December 31st, 2021.
The employee retention credit may be retroactively claimed for 2020 and 2021, through 2023, 2024, and 2025 for your hotel, resort, or motel in California.
CA Hotels Employee Retention Credit, How it Works for Hospitality and Leisure in California
With the California requirements and amount of the ERTC tax credits continually changing with the ERC program, CA hospitality, resorts, and hotel owners and principals may find it difficult to understand if they qualify and how much they can claim.
To maximize the benefits from this California hotel employee retention tax credit, you must understand which quarters are eligible as well as which employees, wages, and payments meet the criteria for receiving the tax credit for your hotel in CA.
California Employee Retention Credit Eligibility Requirements for Hotels, Resorts, and Motels in CA
The California hospitality industry can take advantage of the employee retention credit in several ways.
For a California lodging related business to be eligible for the program, it must have gone through an entire or partial closure because of COVID-19 government regulations or any other kind of government-mandated shut down during certain periods in either 2020 or 2021 as a result of this global pandemic.
Another way is for your California hotel property to demonstrate that it has had either a 2020 quarter with gross receipts at least 50% lower than the same quarter in 2019, or in 2021, quarters with 20% fewer gross receipts compared to the corresponding quarters of 2019. Each three-month period of 2020 and 2021 should be compared to its equivalent month period in 2019.
In California, Did Your Hotel, Resort, Motel, or Casino Experience any of These?
Full or Partial Shutdown of Your Hotel Property in CA
If your hotel or lodging location was fully or partially shut down for even a few days due to COVID-19, it would qualify your California hotel for the ERC tax credit. There are multiple other ways to qualify and claim your California ERC credit for your CA hotel to help financially recover. Even if your California hotel company received an SBA Paycheck Protection Program (PPP) loan, you may still qualify.
California Hotel Bookings Decreased Leading to High Vacancy Rates in CA
Did your hotel room bookings drop? Maybe your CA hotel is more of a tourist destination and both California tourism and business travelers were not booking. In this case, if you can show nominal harm of 10% or more in declining room reservations to your California lodging business, you qualify. This is a valid example for you to claim and receive the ERC tax credit in California.
Limitations on Guests and Hotel Room Capacity California
Due to the shutdown and partial-shutdown in California, your hotel operations greatly reduced capacity due to government mandates and orders. This means that even if your CA hotel, resort, or motel did not meet adequate revenue losses, you can still be eligible for the ERTC tax credit from mandated California restrictions from executive orders.
No In-Person California Events Leads to Impacted Business and Tourism Travel in CA
The inability of tourist and business travelers to attend events in California lead to substantial losses. Public events and gatherings in CA were canceled, and then eventually minimized. This caused most California Events to be canceled completely for 1 to 2 years. This created massive lost sales and revenue potential for many hotel properties in California. Therefore, you may qualify for the ERC tax credit if your lodging and accommodation business has been affected by these limitations in CA.
CA Hotel Guest Cancellations and Refunds Due to COVID in California
Maybe your CA hotel property had various types of conferences, meetings, and other event types. When California shutdown, and then faced many capacity and travel restrictions, consumer and business travelers canceled vacation and business plans, causing many CA hotel operations to refund deposits and lose further revenue. This was a financial devastation to the economy and hotels in California
No In-Person Hotel Restaurant Dining in CA
Due to the pandemic, CA hotels that had on-site restaurants, catering, food service, were not able to have in person or indoor dining. This was an obstacle for California hotels trying to accommodate guests. Guest convenience of eating at the hotel restaurant was taken away. If your CA hospitality business dealt with this situation, and had to close your on-site restaurant, or severely limit seating capacity due to California mandated orders, you will qualify for the ERC tax credit.
California Cancellations of Conventions, Special Events, and Weddings Causing Your Hotel Property to Lose Revenue and Sales in CA
Many California hotel resort or casino properties had to reduce their guest services due to COVID-19, such as not offering in-person legal consultations due to travel restrictions or self-quarantine requirements. If that is the case for you, your legal consultation may be eligible for the ERC tax credit in California.
California Hotel Property Amenities Forced to be Closed – Pool, Spa, Massage, Room Service, and More in CA
Many California hotel resort or casino properties had to reduce their guest services due to COVID-19, such as closing their indoor or outdoor swimming pools, closing their spas, eliminating or reducing room service for CA guests.
Calculating Your California Hospitality Employee Retention Credit for Hotels in CA
Accurately calculating the California employee retention credit for your hotel resort employees requires attention to detail, especially when it comes to determining your total payroll gross wages paid during each quarter to your workforce. Without accurately calculating this figure, you won’t be able to maximize the full tax benefits of this ERC credit. Therefore, having a comprehensive understanding of how best to calculate these figures is essential to maximize your hospitality related business tax credit in CA.
How California Hotel, Resort, Casino, Lodging, or Motel Employers in CA Can Claim the Employee Retention Credit
Although the process of applying for the ERTC for your California company has changed a bit, there’s still time to claim your ERC tax refund. Remember that this window won’t be open forever. It will cease in 2023, 2024, and 2025 based on the past 2020-2021 quarter evaluations. Don’t worry about running out of funds either. These IRS business tax refunds are calculated using each business’ qualifications and financials. The only way you can miss out is by not filing prior to the given deadlines for your hotel in California.
Conclusion and Summary for California Hotels, Resorts, Hospitality, and Lodging Employee Retention Credit in CA
To ensure your California resort hotel, motel, or lodging business is in compliance with the Employee Retention Credit, it’s critical to have all original records, including payroll, W-2s, original 941’s filed, and other documents related to hospitality employee wages. Additionally, any California government shutdown executive orders or restrictions on your California hotel business should be documented.
By understanding the rules of the employee retention credit, hotels, motels, and lodging companies in California can make sure they’re getting all the IRS tax credit benefits owed to them. The ERTC provides an opportunity for hospitality businesses affected by COVID-19 in California to recoup some financial losses.
California Hotels and Lodging Businesses Qualify for the Employee Retention Tax Credit (ERC / ERTC) in CA: Claim Up To a $26,000 Refund Per Hotel Employee for Your Hotel Property in CA
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Depending on eligibility, hotel owners, hospitality professionals, and resort principals and partners can receive up to $26,000 per hotel workforce employee based on the number of W2 employees you had on the payroll in 2020 and 2021.
The ERC / ERTC Program is a valuable IRS tax credit you can claim for your hotel in California.
Schedule Your Free California Hotel Employee Retention Credit Consultation to see what amount of employee retention credit tax refund you qualify for your hotel in California.