Retail shops impacted by COVID-19 restrictions that have W-2 employees may be eligible to receive the Employee Retention Credit (ERC).
Retail stores and retail shopping is one of the biggest staples in American culture. From giant retail supermarkets to small “Mom & Pop” convenience shops, you can find these stores at nearly any corner of any town. During the COVID-19 pandemic, these retail stores were unfortunately some of the most affected businesses. Mandates and restrictions that limited store capacity or hours, or even required full shutdowns, caused business owners of retail stores to experience tough and stressful times.
Thankfully, many of these retail stores with W-2 employees may still be eligible to receive the Employee Retention Credit (ERC), part of the 2020 CARES Act. ERC can provide up to $26,000 per employee for already paid wages, giving some relief for facing hard financial times.
If you own a retail shop and wonder about your store’s eligibility, reach out to Strategic Tax Planning for a free consultation. You can speak with a licensed Certified Public Accountant (CPA) by calling (202) 455-6010 or by filling out this brief contact form, and we will reach out to you.
Many business owners wonder if their shop falls under the category of retail. While retail is a large industry and can include many different types of stores, some common examples include, but aren’t limited to:
To be eligible for ERC, a retail store typically must have W-2 employees, and fall into at least one of the two following categories:
Government-mandated restrictions may include a wide variety of things. Examples might include full or partial shutdowns, interrupted operations anywhere throughout the supply chain, inability to maximally work with your vendors, reduction in goods or services offered to your customers, or altered hours due to sanitation requirements, among many others.
Additionally, some retail stores may have received the Paycheck Protection Program (PPP) loans in 2020 or 2021 and wonder how that may affect their ERC eligibility. Regardless of if your retail store received PPP 1 and/or 2, you may be eligible for ERC. Speak with an experienced CPA to get a better understanding of your situation.
Business owners who have filed for ERC may be wondering when they can expect to receive the tax credit. With so many businesses being affected by the pandemic, the IRS has a high volume of applications to process. Every case is unique and will have a different timeline. Your refund may be processed in about 8 months, although it could take longer.
If you wish to check the status of your refund, you may use the “Where’s My Refund?” feature on the IRS website, or you can call the IRS.
For retail stores, ERC can be a great financial relief, but it is important to make sure you and your tax planners are diligent and thorough when examining your eligibility. It is critical to note that the IRS will carefully examine your claim for this credit. ERC claims with inaccurate information can lead to compliance risks such as ERC audits in the future, setting up a potential disaster.
Strategic Tax Planning’s experienced tax professionals and CPAs will work closely with you and your business, ensuring all of your ERC qualifications and facts are accurate and in order. We are here to help you receive your deserved relief for persevering during difficult financial times.
If you own a retail store and wonder if it may be eligible for ERC, reach out to Strategic Tax Planning for a free consultation with a licensed CPA. You can call us today at (202) 455-6010 or submit your information in our contact form, and we will call you.
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