Texas hotels, resorts, hospitality, and leisure travel businesses in TX that were impacted financially by the COVID pandemic automatically qualify certain periods of time for the employee retention tax credit refund.
When Texas tourism and travel was shut down, then limited capacity when reopened, hospitality and leisure, accommodations, motels, Texas lodging, casinos and other related Texas hotel related companies suffered during 2020 and 2021 in TX.
The Texas economy dropped substantially during the pandemic that left many hotel industry employees in TX out of work due to closures. Job openings and labor turnover in Texas is still evident with 1,002,000 job openings in TX
In TX, some of the main hotel and travel destinations for Texas cities include Abilene, Amarillo, Austin, Beaumont, Brownsville, College Station, Corpus Christi, Dallas-Fort Worth, Dallas-Plano-Irving, Fort Worth-Arlington, El Paso, Houston, Killeen, Laredo, Longview, Lubbock, McAllen, Midland, Odessa, San Angelo, San Antonio, Sherman, Texarkana, Tyler, Victoria, Waco, Wichita Falls.
Maybe your Texas accountant or tax preparer told you that your TX hotel resort did not qualify for the employee retention tax credit in Texas? 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 Texas for the ERC tax refund.
See how your Texas Hospitality and Leisure business qualifies for the IRS Employee Retention Credit Tax Refund for your hotel and lodging business in TX. Schedule Your Free Texas Hotel ERC Consultation.
Texas Employee Retention Tax Credit for Hotels, Resorts and Hospitality Industry in TX
Texas hotels, resorts, and other hospitality, travel, accommodation, and leisure related businesses in TX 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.
Texas 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 TX 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 Texas.
TX Hotels Employee Retention Credit, How it Works for Hospitality and Leisure in Texas
With the Texas requirements and amount of the ERTC tax credits continually changing with the ERC program, TX 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 Texas 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 TX.
Texas Employee Retention Credit Eligibility Requirements for Hotels, Resorts, and Motels in TX
The Texas hospitality industry can take advantage of the employee retention credit in several ways.
For a Texas 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 Texas 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 Texas, Did Your Hotel, Resort, Motel, or Casino Experience any of These?
Full or Partial Shutdown of Your Hotel Property in TX
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 Texas hotel for the ERC tax credit. There are multiple other ways to qualify and claim your Texas ERC credit for your TX hotel to help financially recover. Even if your Texas hotel company received an SBA Paycheck Protection Program (PPP) loan, you may still qualify.
Texas Hotel Bookings Decreased Leading to High Vacancy Rates in TX
Did your hotel room bookings drop? Maybe your TX hotel is more of a tourist destination and both Texas 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 Texas lodging business, you qualify. This is a valid example for you to claim and receive the ERC tax credit in Texas.
Limitations on Guests and Hotel Room Capacity Texas
Due to the shutdown and partial-shutdown in Texas, your hotel operations greatly reduced capacity due to government mandates and orders. This means that even if your TX hotel, resort, or motel did not meet adequate revenue losses, you can still be eligible for the ERTC tax credit from mandated Texas restrictions from executive orders.
No In-Person Texas Events Leads to Impacted Business and Tourism Travel in TX
The inability of tourist and business travelers to attend events in Texas lead to substantial losses. Public events and gatherings in TX were canceled, and then eventually minimized. This caused most Texas Events to be canceled completely for 1 to 2 years. This created massive lost sales and revenue potential for many hotel properties in Texas. Therefore, you may qualify for the ERC tax credit if your lodging and accommodation business has been affected by these limitations in TX.
TX Hotel Guest Cancellations and Refunds Due to COVID in Texas
Maybe your TX hotel property had various types of conferences, meetings, and other event types. When Texas shutdown, and then faced many capacity and travel restrictions, consumer and business travelers canceled vacation and business plans, causing many TX hotel operations to refund deposits and lose further revenue. This was a financial devastation to the economy and hotels in Texas
No In-Person Hotel Restaurant Dining in TX
Due to the pandemic, TX hotels that had on-site restaurants, catering, food service, were not able to have in person or indoor dining. This was an obstacle for Texas hotels trying to accommodate guests. Guest convenience of eating at the hotel restaurant was taken away. If your TX hospitality business dealt with this situation, and had to close your on-site restaurant, or severely limit seating capacity due to Texas mandated orders, you will qualify for the ERC tax credit.
Texas Cancellations of Conventions, Special Events, and Weddings Causing Your Hotel Property to Lose Revenue and Sales in TX
Many Texas 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 Texas.
Texas Hotel Property Amenities Forced to be Closed – Pool, Spa, Massage, Room Service, and More in TX
Many Texas 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 TX guests.
Calculating Your Texas Hospitality Employee Retention Credit for Hotels in TX
Accurately calculating the Texas 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 TX.
How Texas Hotel, Resort, Casino, Lodging, or Motel Employers in TX Can Claim the Employee Retention Credit
Although the process of applying for the ERTC for your Texas 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 Texas.
Conclusion and Summary for Texas Hotels, Resorts, Hospitality, and Lodging Employee Retention Credit in TX
To ensure your Texas 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 Texas government shutdown executive orders or restrictions on your Texas hotel business should be documented.
By understanding the rules of the employee retention credit, hotels, motels, and lodging companies in Texas 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 Texas to recoup some financial losses.
Texas Hotels and Lodging Businesses Qualify for the Employee Retention Tax Credit (ERC / ERTC) in TX: Claim Up To a $26,000 Refund Per Hotel Employee for Your Hotel Property in TX
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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 Texas.
Schedule Your Free Texas Hotel Employee Retention Credit Consultation to see what amount of employee retention credit tax refund you qualify for your hotel in Texas.