Rhode Island hotels, resorts, hospitality, and leisure travel businesses in RI that were impacted financially by the COVID pandemic automatically qualify certain periods of time for the employee retention tax credit refund.
When Rhode Island tourism and travel was shut down, then limited capacity when reopened, hospitality and leisure, accommodations, motels, Rhode Island lodging, casinos and other related Rhode Island hotel related companies suffered during 2020 and 2021 in RI.
The Rhode Island economy dropped substantially during the pandemic that left many hotel industry employees in RI out of work due to closures.
In RI, some of the main hotel and travel destinations for Rhode Island cities include Norwich, Providence.
Maybe your Rhode Island accountant or tax preparer told you that your RI hotel resort did not qualify for the employee retention tax credit in Rhode Island? 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 Rhode Island for the ERC tax refund.
See how your Rhode Island Hospitality and Leisure business qualifies for the IRS Employee Retention Credit Tax Refund for your hotel and lodging business in RI. Schedule Your Free Rhode Island Hotel ERC Consultation.
Rhode Island Employee Retention Tax Credit for Hotels, Resorts and Hospitality Industry in RI
Rhode Island hotels, resorts, and other hospitality, travel, accommodation, and leisure related businesses in RI 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.
Rhode Island 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 RI 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 Rhode Island.
RI Hotels Employee Retention Credit, How it Works for Hospitality and Leisure in Rhode Island
With the Rhode Island requirements and amount of the ERTC tax credits continually changing with the ERC program, RI 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 Rhode Island 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 RI.
Rhode Island Employee Retention Credit Eligibility Requirements for Hotels, Resorts, and Motels in RI
The Rhode Island hospitality industry can take advantage of the employee retention credit in several ways.
For a Rhode Island 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 Rhode Island 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 Rhode Island, Did Your Hotel, Resort, Motel, or Casino Experience any of These?
Full or Partial Shutdown of Your Hotel Property in RI
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 Rhode Island hotel for the ERC tax credit. There are multiple other ways to qualify and claim your Rhode Island ERC credit for your RI hotel to help financially recover. Even if your Rhode Island hotel company received an SBA Paycheck Protection Program (PPP) loan, you may still qualify.
Rhode Island Hotel Bookings Decreased Leading to High Vacancy Rates in RI
Did your hotel room bookings drop? Maybe your RI hotel is more of a tourist destination and both Rhode Island 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 Rhode Island lodging business, you qualify. This is a valid example for you to claim and receive the ERC tax credit in Rhode Island.
Limitations on Guests and Hotel Room Capacity Rhode Island
Due to the shutdown and partial-shutdown in Rhode Island, your hotel operations greatly reduced capacity due to government mandates and orders. This means that even if your RI hotel, resort, or motel did not meet adequate revenue losses, you can still be eligible for the ERTC tax credit from mandated Rhode Island restrictions from executive orders.
No In-Person Rhode Island Events Leads to Impacted Business and Tourism Travel in RI
The inability of tourist and business travelers to attend events in Rhode Island lead to substantial losses. Public events and gatherings in RI were canceled, and then eventually minimized. This caused most Rhode Island Events to be canceled completely for 1 to 2 years. This created massive lost sales and revenue potential for many hotel properties in Rhode Island. Therefore, you may qualify for the ERC tax credit if your lodging and accommodation business has been affected by these limitations in RI.
RI Hotel Guest Cancellations and Refunds Due to COVID in Rhode Island
Maybe your RI hotel property had various types of conferences, meetings, and other event types. When Rhode Island shutdown, and then faced many capacity and travel restrictions, consumer and business travelers canceled vacation and business plans, causing many RI hotel operations to refund deposits and lose further revenue. This was a financial devastation to the economy and hotels in Rhode Island
No In-Person Hotel Restaurant Dining in RI
Due to the pandemic, RI hotels that had on-site restaurants, catering, food service, were not able to have in person or indoor dining. This was an obstacle for Rhode Island hotels trying to accommodate guests. Guest convenience of eating at the hotel restaurant was taken away. If your RI hospitality business dealt with this situation, and had to close your on-site restaurant, or severely limit seating capacity due to Rhode Island mandated orders, you will qualify for the ERC tax credit.
Rhode Island Cancellations of Conventions, Special Events, and Weddings Causing Your Hotel Property to Lose Revenue and Sales in RI
Many Rhode Island 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 Rhode Island.
Rhode Island Hotel Property Amenities Forced to be Closed – Pool, Spa, Massage, Room Service, and More in RI
Many Rhode Island 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 RI guests.
Calculating Your Rhode Island Hospitality Employee Retention Credit for Hotels in RI
Accurately calculating the Rhode Island 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 RI.
How Rhode Island Hotel, Resort, Casino, Lodging, or Motel Employers in RI Can Claim the Employee Retention Credit
Although the process of applying for the ERTC for your Rhode Island 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 Rhode Island.
Conclusion and Summary for Rhode Island Hotels, Resorts, Hospitality, and Lodging Employee Retention Credit in RI
To ensure your Rhode Island 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 Rhode Island government shutdown executive orders or restrictions on your Rhode Island hotel business should be documented.
By understanding the rules of the employee retention credit, hotels, motels, and lodging companies in Rhode Island 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 Rhode Island to recoup some financial losses.
Rhode Island Hotels and Lodging Businesses Qualify for the Employee Retention Tax Credit (ERC / ERTC) in RI: Claim Up To a $26,000 Refund Per Hotel Employee for Your Hotel Property in RI
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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 Rhode Island.
Schedule Your Free Rhode Island Hotel Employee Retention Credit Consultation to see what amount of employee retention credit tax refund you qualify for your hotel in Rhode Island.