02/10/2022
We understand, it can be confusing to understand who qualifies and who doesn't. Let us help make heads or tails.
It boils down to two different tests to determine if your business qualifies or does not qualify. The Government Orders Test & the Gross Receipts Test.
If your company faced a full or partial suspension of operations due to government mandate, chances are you qualify.
If your company had a significant loss of gross receipts (revenue), chances are you qualify.
If you took the PPP, you still qualify. However, PPP recipients who are eligible for the ERC cannot include wages that were paid with forgiven PPP loan proceeds in the ERC calculation.
The ERC doesn't specify essential or non-essential employer to qualify for either test.
A “partial suspension” of operations does not mean a complete cessation of operations or closure of locations. Thus, a business can demonstrate a partial suspension of operations through other impacts to operations, such as the inability to perform certain services. Whether a business experienced a full or partial suspension is a facts and circumstances analysis.
The ERC does not require a business to experience a decline in revenue to be eligible for the ERC. The intent of Congress is clear in the plain language of the legislation, which provides that an employer must satisfy the Gross Receipts Test or the Government Orders Test, not both. Thus, a company does not have to experience a decline in revenue to be eligible for the ERC.
If you made it this far, we would love to discuss your circumstances to see if you qualify for the ERC.
