So I have a client who has been in communication with an ERC mill. This is the email that was sent to him (redacted of course). This client is not being argumentative with me but I've told him I'm quite confident he doesn't qualify, but this is what I'm up against. Any chance I'm wrong that he doesn't qualify? (or more specifically that every business doesn't qualify as stated in the email), except perhaps for a few short days of shut down in Idaho (he has taken PPP):
Thank you for reaching out. We are happy to help you with your Employee Retention Tax Credit program process.
If a business qualifies under any one of the three tests below, it can receive up to $26,000 per employee if it had less than 100 employees in 2019 and up to $21,000 if it had less than 500 employees in 2019.
1. The Government Mandate Test: A trade or business was fully or partially impacted in any way, or had to reduce business hours, due to a government order (see detailed explanation below); or
2. The Reduction in Revenue Test: A business had a significant decline in gross receipts; or
3. Startup Business Test: A new business started after Feb. 15, 2020.
We haven't run across a business that doesn't qualify under the Government Mandate Test.
Under the Government Mandate test, a business that had its business operations "disrupted" by a federal, state, county, or city COVID mandate qualifies for the ERTC tax credits. A disruption is any government restriction that forced the business to alter its day-to-day operations.
Here are a few examples of business interruptions that, if caused by a government mandate (order), generally enable a business to qualify:
-Mandatory shutdowns (Governor Newsom's mandatory shutdown of all bars, wineries, nightclubs, and brewpubs on 3/15/20 and his "Stay at Home" order of 3/19/20.) note, author must operate in California. This client is in Idaho
-Limitations on the number of employees or guests allowed in the factory, warehouse, showroom, offices, lobby, etc.
-Restrictions on group meetings
-Decreases in hours of operation
-Reduction in services or goods offered to customers
-Interruption of any part of business operations
-Challenges finding and retaining employees
-Supply chain interruptions- Suppliers to business were unable to make deliveries of critical goods or materials
-Delayed production timelines caused by supply chain disruptions
-Projects were canceled or delayed
-Shifting of hours to increase sanitation of the business
-Inability to access equipment
-Limited capacity to operate
-Inability to work with vendors
-Inability to work as a vendor
-Inability to travel
-Missing of trade shows
-Forced cancellation of fundraising events (nonprofits)
-Inability to perform "elective" procedures (medical organizations)
-One or more locations of a multi-location business partially or fully shut down.
As you can imagine, it's hard to find a California business that doesn't qualify.
It's hard to imagine that your business didn't suffer from at least one of the examples above. If so, your business qualifies for the ERTC.
I see that you have three shops in Idaho. Please take a look at the list above and let me know of several interruptions that you experienced at any or all of your shops.
I work with XXXXX Law and Tax, LLC, and together we have worked with over 100 businesses on the ERTC program. In fact, XXXXX Law processed the ERTC claims for my business in XXXXX, CA.
I have attached several documents that you will need:
-Employee Information Document List: Items that XXXXX Law needs (uploading these should not take much time)
-Business Information Sheet: Basic questionnaire about the business entity (very simple);
-Engagement Agreement: Please sign and email back to us;
We have worked hard to make this a very simple process for the business owner and its representatives. Our team will do the complicated work of creating spreadsheets from the information provided and will calculate the amounts you are entitled to, taking into consideration your PPP information. Then, it's a matter of waiting for the checks from the Treasury.
Please let me know if you have any questions.
Best,