A couple who are restaurant owners

The ERC for the restaurant industry

Businesses in many industries may qualify for a substantial payroll tax refund through the Employee Retention Credit (ERC), even if they received PPP loans.

Determine Eligibility
A couple who are restaurant owners

The impact of the pandemic on the restaurant industry

Which industries do you think were affected by COVID-19 the most? There’s an argument to be made for many, but the restaurant sector is likely at the top of your list.

While recovery is underway, the pandemic disproportionately affected restaurants of all sizes. Consider this:


of operators say they did not open to full capacity for indoor on-premises dining


employers report staffing shortages


of operators say food costs are higher than they were prior to COVID-19

Bars, cafés, and dining establishments were hit hard by governmental orders, which limited the number of in-person customers they could serve and minimized the human contact needed to serve them.

Luckily, eligible restaurant owners can apply for relief through a program called the Employee Retention Credit (ERC).

Grey quote graphic
"I was so impressed with everyone I worked with at Innovation Refunds! Not only did they help me get a substantial refund, but they were also very friendly, kind, and helpful in the process!"
Marcy Nesselroade, Ironworks Café

What is the ERC?

So, what is the ERC? It’s a payroll tax refund that helps eligible businesses get thousands back per employee they kept on payroll during the pandemic. Meaning, the more W2 employees you kept on payroll at your restaurant, the more you’ll likely receive in return.

This government program was developed to encourage and support employers who retained existing employees throughout 2020 and the first three quarters of 2021 by offering a generous payroll tax refund through the IRS.

How much could your restaurant business be eligible to receive if you qualify?

How was your restaurant affected*?

2020 was a year of quick and constant change, with businesses pivoting on the fly to new methods, new menus, and new ways of operating. Many food service businesses had to adopt completely new business models altogether.

Among other challenges, here are some of the hardships and hurdles that restaurants, bars, food trucks, and all types of food service businesses faced:

Full or partial shutdown of indoor dining

Mandated change to hours of operation

Interruption of business due to supply chain issues

Inability to work with vendors

Increased cleaning measures

Changes in mandates causing closing and re-opening

If you experienced any of these, you may be a prime candidate for the ERC.

Success stories from businesses in the church and non-profit industries

These guys are the real deal. Great service and no upfront liability. They only get paid when I get paid. Now that's a no-brainer!

Mike Chou
Margaux Restaurant

I found this company through an online ad and they reached out immediately, walked me through all the necessary steps, and guided me to obtain the proper paperwork to get my refund!

Suzanne Nguyen
Café Zenon

Innovation Refunds was amazing to work with. From start to finish, the process was absolutely seamless. I wouldn’t trust anyone else to help me out with my small business!

Merlen Fry
Breadeau Pizza

We work for you, with no upfront fee

Our independent tax attorneys have extensive knowledge of ERC qualifications and IRS tax code to help eligible churches and other non-profits claim their refund.

Trusted by thousands of SMBs
4.9 rating on Trustpilot
SOC 2 Type 1 certified security

How can restaurants use the ERC funding?

For businesses that qualify for the ERC, there are many ways to put the payroll tax refund to good use – things like paying debts, operating expenses, hiring and retaining employees, and growing your business.

Many companies that claim the ERC decide to re-invest in their businesses, which might mean:

Allocating to labor costs

Financial relief due to significant revenue decline

Eliminating debt

Boosting cash revenues

ERC qualifications for the restaurant industry

What does it take for a restaurant like yours to qualify for the ERC?

First, you’ll want to take note of the adjustments your business made to survive the pandemic:

1. Did you experience a full or partial shutdown?
2. How did you handle on-premise dining?
3. Did you pivot to delivery?

When you partner with a company like Innovation Refunds, you’ll be advised on whether you qualify for the refund under a concept called “limited commerce,” which refers to a partial suspension due to government orders. Using your written testimony about how COVID affected your business, our independent tax attorneys will determine if your business can file under limited commerce.

Next, you'll want to consider how many employees you kept on payroll during 2020 and 2021. Were they full-time or part-time? Remember that cash and credit tips are reportable for payroll tax and can qualify for ERC wages, as long as the business meets the other requirements. Ultimately, restaurants in almost every state may potentially qualify for the ERC due to government shutdown orders. Even if your revenue did not decline, your restaurant may have experienced partially suspended operations due to a government mandate, and it may still qualify under limited commerce.

We’ve helped thousands of eligible businesses, including those in the restaurant industry, claim the ERC:


Qualifying them for government shutdown orders


Determining eligibility under limited commerce


Outlining COVID’s impact beyond reduced revenue

It’s easy to get started and see if you are eligible for the ERC*

It's easy to get started and see if your business is eligible for the ERC.

If you’re in the restaurant industry and haven’t heard of the ERC, you’re not alone. In fact, around 90% of bars and restaurants have yet to claim their ERC, and 64% hadn’t even heard of it.

Why is this? Originally, the ERC was not accessible for businesses that took part in PPP funding. This means that many employers took out PPP loans in 2020 but skipped the ERC.

However, thanks to the Consolidated Appropriations Act (CAA) of 2021, the program has undergone expansion and under new rules, you can claim the ERC and PPP.

Frequently Asked Questions

Will Innovation Refunds work with my CPA to claim the ERC?
Can my restaurant claim the ERC?
What is limited commerce?
Can my restaurant qualify under limited commerce?
Do tipped wages count as eligible wages under the ERC?
Where can I learn more about limited commerce?
Should we include only full-time employees or all employees for qualified wages under the ERC?
My business received a PPP loan. Is it still eligible for the ERC?
Ready to start? Begin now and see if you qualify.
Get Started
Have additional questions? Chat with a team member and get your answers.
Chat Now