Do you own or operate a Tim Hortons franchise restaurant?
Wondering if your Tim Hortons location qualifies for the Employee Retention Credit (ERC) due to negative impact of COVID during 2020 and 2021?
As a Tim Hortons franchisee, yes it does, and here is why.
Your Tim Hortons restaurant still qualifies for the employee retention tax credit, depending on the mandated state government, county, city, or municipality restrictions placed on your location during the COVID pandemic. Even if your revenue increased during 2020 and 2021, vs. 2019, you still qualify.
If your Tim Hortons franchise restaurant was forced to close your indoor dining room, or limit seating capacity indoors, or reduce your hours of operation at your Tim Hortons location, this qualifies your Tim Hortons restaurant location under the IRS Employee Retention Tax Credit (ERTC) “partial shutdown” rules.
Meaning, your Tim Hortons restaurant was allowed to still do delivery, carryout, or outdoor seating. Even if your location did not have to be fully shutdown. However, you were mandated to close your Tim Hortons indoor dining, and / or reduce your hours of operation at your Tim Hortons location.
Under the IRS ERC rules and regulations, your Tim Hortons business qualifies because your operations were disrupted due to government intervention by forcing you to reduce your business capacity. This qualifies your Tim Hortons franchise for the ERC Credit and tax refund from the start date of government restrictions, to the end date when all restaurant capacity restrictions were lifted.
This is exciting news for all Tim Hortons franchisees and owners to help offset and recoup costs from the negative impact of COVID on your restaurant.
Many Financial and Accounting Professionals, CPAs, Financial Planners, Advisors, and Attorneys are unknowingly advising their Tim Hortons restaurant clients wrong because they do not fully understand all the Employee Retention Credit tax guidelines as they relate to restaurants and food service-type businesses.
Schedule Your Free Restaurant Employee Retention Credit Consultation to see if your Tim Hortons franchise location qualifies for the ERC Refund.
Key ERC Credit Takeaways You Will Learn:
- Tim Hortons ERC Eligibility: See if your franchise can get the tax credit.
- Mandates Affecting Qualification: How government orders impact your eligibility.
- Maximize Your ERC Claim: Learn the cap on credit per employee for 2020.
- Understanding Qualified Wages: Know which wages count for the ERC.
- ERC Claim Process: Discover the steps to claim the credit for your restaurant.
See Important 2024 Employee Retention Tax Credit Deadline Information at the Bottom of This Article.
Background on Tim Hortons Franchise Restaurant Owners and Franchisees
For Tim Hortons franchisee owners, the average annual sales volume of a Tim Hortons franchise restaurant location in 2021 was $1,200,000.
Tim Hortons restaurant franchises overall generated $687,000,000 in revenue from 637 locations.
This increased from the previous year by 4.
Overall, Tim Hortons corporate has a total of 0 company units added to the 637 franchise units, for a combined total of 637 restaurant location units company-wide.
Visit the Tim Hortons company website at TimHortons.com.
Tim Hortons Employee Retention Credit For Franchise Restaurants
Tim Hortons franchisee owners are not alone. The restaurant industry continues to struggle with the economic impact of the COVID pandemic, high inflation, and a possible recession. Tim Hortons restaurant owners are looking for ways to support their Tim Hortons employees and keep their businesses afloat, especially Tim Hortons franchise restaurant owners who have a healthy investment in franchise fees and other expenses to recoup and earn a return from owning a Tim Hortons restaurant.
The Employee Retention Credit (ERC) or Employee Retention Tax Credit (ERTC) was established by the Coronavirus Aid, Relief, and Economic Security (CARES) Act to help restaurant and food service type business employers retain their staff during economic hardship and negative impact due to COVID.
The Internal Revenue Service (IRS) ERC Tax Refund program is an important tool for restaurateurs, restaurant owners, principals, and employers. The ERTC offers tax relief and provides a financial incentive to retain employees during the past economic disruption that occurred during 2020 and 2021.
For Tim Hortons owners, having a thorough understanding of the ERC credit and how it applies to their Tim Hortons restaurant franchise, owners and principals can ensure they take full advantage of this tax credit to support their Tim Hortons employees and locations.
Here is how Tim Hortons restaurant owners and principals can take advantage of this valuable IRS tax credit to help their Tim Hortons location stay open with positive cash-flow to continue keeping their W-2 employees on the payroll.
Employee Retention Tax Credit For Tim Hortons Restaurant Owners
The Employee Retention Credit for Tim Hortons restaurants is a tax credit available to eligible Tim Hortons restaurants and other food service businesses. It provides restaurant employers with a federal income tax credit of up to $26,000 per employee for wages paid during the pandemic years of 2020 and 2021.
This tax incentive is intended to help reduce the financial burden of having retained Tim Hortons employees who may otherwise have been laid off or suspended due to the economic downturn caused by the pandemic.
The ERC applies to gross wages paid to your Tim Hortons franchise employees between March 13, 2020 and September 30, 2021, only for each quarter during this time frame that may have qualified. 3/13/20 to 9/30/21 time frame is for Tim Hortons franchises that were in existence prior to COVID.
For Tim Hortons locations that opened after February 15, 2020, this restaurant is considered a recovery start-up business, and may qualify through December 31, 2021 (12/31/21) of the 4th quarter.
Qualified Tim Hortons restaurants in 2020 can claim up to $5,000 maximum per employee for all of 2020. This is based on up to 50% of a Tim Hortons employee’s qualified wages. Eligible Tim Hortons employers must also have experienced either a full or partial shutdown due to orders, OR a capacity restriction from a governmental authority, OR have experienced a significant decline in gross receipts compared with the same quarter in 2019.
Almost every state forced Tim Hortons restaurants to close their indoor dining, and / or limited their interior seating capacity. These periods of time occurred in which state, county, and city your Tim Hortons restaurant is located, will qualify the quarters and periods of time the capacity restrictions were imposed on your Tim Hortons location.
For all of 2020, Tim Hortons employers can access up to $5,000 maximum for eligible employees, and up to $7,000 per quarter, per employee, for eligible employees (for each quarter) in 2021. This means up to a combined $26,000 to $33,000 per employee depending on certain factors.
For Tim Hortons Restaurants, What Are The Eligibility Requirements For The Employee Retention Credit?
To qualify for the ERC, Tim Hortons restaurants must have experienced a full or partial suspension of their operations due to orders from a governmental authority limiting their ability to operate during specific periods in 2020 due to the pandemic.
Another way to qualify is if your Tim Hortons restaurant had experienced a significant decline in gross receipts of at least 50% in 2020, or 20% in 2021, compared to the same calendar quarter in 2019, a pre-COVID year for your Tim Hortons franchise. 2020 vs. 2019 and 2021 vs. 2019, quarter by quarter.
If you had less than 100 Tim Hortons employees paid in any given quarter in 2020 that qualifies, then all gross wages are counted, whether the employee was full-time or part-time.
In 2021, if your Tim Hortons restaurant had less than 500 employees paid in any given quarter in 2021 that qualifies, then all gross wages are counted, whether the employee was full-time or part-time working for your Tim Hortons franchise.
The Internal Revenue Service (IRS) provides the following specific restaurant examples to explain “full or partial closure orders” during a calendar quarter:
•Social Distancing Through Capacity Restrictions at Your Tim Hortons Location
It appears that government orders restricting the spacing of tables or limiting seating at your Tim Hortons has more than a nominal impact on the restaurant’s business operations under the facts and circumstances.
•Tim Hortons Dining Is Closed Indoors, But Open Outdoors or for Tim Hortons Delivery
Following the order, the Tim Hortons restaurant can operate only its outdoor sit-down and carry-out service during this period. Since, under the circumstances, a significant portion of the Tim Hortons restaurant’s business operations, its indoor dining service, has been closed by a government order, the Tim Hortons restaurant’s business operations are partially suspended.
•Tim Hortons Restaurants All Interior Dining Rooms Are Closed
Due to a government order closing all restaurants, bars, and similar food service establishments for sit-down service (indoor dining), a Tim Hortons restaurant must close its on-site dining area.
Tim Hortons restaurants that qualify for the ERC can receive a tax refund cash incentive equal to a percentage of qualified gross wages paid:
- Services and other gatherings were restricted by government orders; or
- There was a significant decline in gross receipts for these Tim Hortons restaurants.
What If My Tim Hortons Restaurant Received a Paycheck Protection Program (PPP) Loan?
Good news Tim Hortons owners!
Due to recent changes in the ERC program, there are still ERC refund benefits available to organizations and Tim Hortons owners that have previously received PPP Loans, Restaurant Revitalization Funds (RRF), or Shuttered Venue Operator Grants.
The Tim Hortons PPP Loan (or loans), if your Tim Hortons location received two PPP loans, just needs to be correctly subtracted out from the date it was received against the qualified gross wages paid to your employees at Tim Hortons.
Besides Tim Hortons franchises, there are many more types of restaurants that are eligible for the ERC credit. If your business serves any type of food similar to Tim Hortons, you are probably eligible.
How Tim Hortons Franchisees Can Claim The Employee Retention Tax Credit?
Once your Tim Hortons franchise restaurant location has met all the eligibility requirements for the Employee Retention Credit, you can claim it on IRS Form 941-X.
It seems simple enough, however, the ERC Credit is highly confusing and complex when dealing with the ERC program.
See If Your Tim Hortons Restaurant Qualifies For The ERC Credit. Schedule Your Free ERC Tax Refund Consultation For Expert Help In Claiming The ERTC Credit For Your Tim Hortons Franchise.
When dealing with IRS tax matters, federal payroll taxes, income taxes, tax returns and other matters before the IRS, it’s always best to have expert help to stay safe and compliant.
Additionally, you should keep all your Tim Hortons records and supporting documents in case the IRS has any questions. As a restaurant employer, understanding and meeting the expectations of the Employee Retention Credit For Franchise Restaurants is critical to taking advantage of the available tax credits.
Most importantly, Tim Hortons employers must accurately calculate the ERC Credit amount, provide the necessary documentation to support their ERC claim, and ensure they comply with all relevant laws. Tim Hortons employers are also responsible for keeping accurate records of their employee’s wages and hours worked.
You can also check out the detailed guide on How to Claim the Employee Retention Credit (ERC)?
Is The Employee Retention Tax Credit Only For Tim Hortons Restaurants?
No, the employee retention tax credit is not only for Tim Hortons restaurants. The Employee Retention Tax Credit (ERTC) was created as part of the Coronavirus Aid, Relief and Economic Security (CARES) Act to support business owners and Tim Hortons franchisees who have been affected by the Coronavirus pandemic.
This tax credit is available to all businesses regardless of size or industry, so restaurant employees are not the only ones eligible for this benefit.
To qualify for these tax benefits, Tim Hortons employers must demonstrate that they experienced either a full or partial suspension of business operations due to governmental orders related to COVID-19 or had significant revenue losses due to the virus.
Besides Tim Hortons franchises, the ERC program is open to all types of businesses, including educational institutions, churches and other religious organizations, nonprofit organizations, and tribal governments.
Can A Tim Hortons Restaurant Be Eligible For The ERC Credit And PPP Loan?
Yes! Even if your Tim Hortons restaurant received an SBA Paycheck Protection Program (PPP) loan, an Economic Injury Disaster Loan (EIDL), or a Restaurant Revitalization Fund (RRF) grant, you are still eligible under current IRS rules and regulations, provided certain requirements are met.
The Tim Hortons payroll expenses that were paid by PPP loans may not be considered eligible for ERC. You can not claim ERC on the same wages paid by PPP loan. The IRS doesn’t want double-dipping of the same exact wages paid with PPP month to your Tim Hortons employees.
Is The ERTC Available To Tim Hortons Locations That Received Restaurant Revitalization Fund (RRF) Grants?
Yes! The “Restaurant Revitalization Fund” was recently established as part of the American Rescue Plan Act of 2021, providing restaurants with additional assistance.
A clarification was issued by the IRS on August 20, 2021, stating that Paycheck Protection Program (PPP) loans nor Restaurant Revitalization Funds (“RRF”) should be considered gross receipts for the purposes of determining eligibility.
Are Tipped Wages at Tim Hortons Eligible For The Employee Retention Tax Credit?
Yes! As part of this relief measure, certain qualified wages are eligible for reimbursement via an employer’s payroll tax credits. Tipped wages are included in qualified wages if they meet specific criteria as determined by the US Internal Revenue Service (IRS).
If the tipped wages are more than $20 a month and are subject to FICA then those tipped wages are eligible for ERTC.
What Is The Tim Hortons Full-Time or Part-Time Employee Count For ERC Eligibility for 2020 and 2021?
There is confusion because the IRS changed the criteria in 2021 for ERTC.
If you had less than 100 Tim Hortons employees paid in any given quarter in 2020 that qualifies, then all gross wages are counted, whether the employee was full-time or part-time.
In 2021, if your Tim Hortons restaurant had less than 500 employees paid in any given quarter in 2021 that qualifies, then all gross wages are counted, whether the employee was full-time or part-time working for your Tim Hortons franchise.
Would It Be Better If I Combined The Gross Receipts From All Of My Tim Hortons Franchise Restaurants?
Restaurants in a group may claim the credit for gross receipts if the value of their gross receipts is equal to or greater than an aggregate sum that’s specified by regulators.
If the group meets the criteria, each individual entity may claim the credit, regardless of whether the group as a whole achieved the minimum threshold.
If the gross receipts present for the group as a whole do not meet the requirements, none of the entities may claim the credit even though some restaurants individually had a decline.
How Do I Compare My Q1 2020 Gross Receipts With My Q1 2019 Gross Receipts If I Didn’t Start My Tim Hortons Restaurant Until Mid-Q2 2019?
If you opened your Tim Hortons franchise at the beginning of a quarter this year, you can calculate the gross receipts you have for the entire year. The first 3 months of the Tim Hortons opening in this year can be used as the basis for this calculation.
Conclusion and Summary for Franchise Owners of Tim Hortons Restaurants
The Employee Retention Credit is a great way for Tim Hortons restaurants to offset some costs associated with retaining and keeping employees employed during those tough times experienced in 2020 and 2021 due to COVID.
The ERC Refund will help Tim Hortons restaurant owners receive a much-needed tax refund to keep their Tim Hortons franchise profitable.
Your Tim Hortons location probably qualifies for the ERC based on government orders limiting the indoor seating capacity or hours of operation for your Tim Hortons.
Tim Hortons Franchise Owners: Get Help on How to Apply for the Employee Retention Tax Credit (ERC / ERTC): Claim Up To a $26,000 Refund Per Employee for Your Tim Hortons Location
Disaster Loan Advisors can assist your Tim Hortons restaurant with the complex and confusing Employee Retention Credit (ERC) and Employee Retention Tax Credit (ERTC) program.
Depending on eligibility, Tim Hortons owners can receive up to $26,000 per 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 Tim Hortons franchise.
Schedule Your Free Employee Retention Credit Consultation to see what amount of employee retention tax credit your Tim Hortons location qualifies for.
ERC Deadline Urgency in 2024
April 15, 2024 Deadline for the 2020 ERC Tax Year
The deadline is coming up for the final opportunity to retroactively claim your business Employee Retention Credit for the past 2020 tax year. With the April 15, 2024 deadline fast approaching, we urge you; don’t let this final chance pass!
While not all businesses will qualify, as it depends on multiple factors per IRS Rules and Guidelines, you might be leaving significant financial relief on the table from prior COVID impact to your business during the past 2020 and 2021 business operation years.
Last year, in September 2023, the IRS temporarily paused processing ERC Claims for the remainder of last year. We at Disaster Loan Advisors (DLA) predicted this over one year ago when we made this ERC video warning business owners. See the ten-minute mark of the video for details.
TAKE ACTION NOW IN 2024
Even though the IRS has temporarily paused processing, you will still want to check eligibility and file now (if you qualify) because once the IRS will resume processing, ERC tax credit claims are processed in the order they are received.
If you haven’t previously filed for the ERC Credit, it is worth scheduling a phone call to at least explore your possible eligibility from both the past 2020 and 2021 business tax years. Contact us today for a deep-dive analysis to determine if your business qualifies one or more quarters from the 2020 and / or 2021 tax years.
As a leading dedicated member of the Tax and Accounting Team at Disaster Loan Advisors™, Mark focuses on unlocking the ERC Tax Credit's potential for eligible firms that qualify, providing strategic advice, and detailed guidance to ensure substantial financial recovery and growth. His methodical approach to client engagement includes comprehensive deep-dive analysis, customized consultation and guidance, and a commitment to achieving tangible results for each business served.
Disaster Loan Advisors™ (DLA) offers a comprehensive suite of services designed to navigate the complexities of the Employee Retention Tax Credit (ERC) program, ensuring that qualified businesses leverage the maximum possible benefit with minimum hassle. Unlike some firms that charge exorbitant contingency or percentage-based fees (often between 10% to 30% of your ERC refund), DLA operates on a fair and reasonable, transparent flat-fee structure that aligns with the IRS's guidelines.
If you are looking for an ERC Company that believes in providing professional ERC Services and value for small business owners, in exchange for a fair, reasonable, and ethical fee for the amount of work required, Disaster Loan Advisors™ is a good fit for you. STAY SAFE. STAY COMPLIANT. KEEP MORE OF YOUR REFUND.™