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:

• Grocery stores and supermarkets
• Convenience stores
• Big box stores
• Specialty stores, such as a gardening center or bookstore
• Department stores
• Discount stores
• Warehouse retailers

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:

• Your business(es) experienced decreased revenue during quarters 1-4 in 2020 and 1-3 in 2021, compared to 2019
• Your business(es) suffered from any number of government-mandated restrictions

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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. 

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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. 

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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.

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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.