There have been various versions of the Employee Retention Credit passed as part of the COVID relief bills that introduced, expanded who is eligible, extended the timeline and then reduced the timeline. So, we can understand the confusion about an auto dealer’s eligibility.
Let us quickly summarize a few things to help you consider your eligibility:
Employee Retention Credit Timeline
- March 2020 to September 2021
Employee Retention Credit Eligibility Requirements
- Was your dealership negatively impacted by a government order? Does March 2020 ring a bell?
- For 2020, did your gross receipts drop more than 50% in the 2nd, 3rd or 4th calendar quarter compared to the same calendar quarter in 2019?
- For 2021, did your gross receipts drop more than 20% in the 1st, 2nd or 3rd calendar quarter compared to the same calendar quarter in 2019?
- We can talk other facts and circumstances depending on whether you think your business was negatively impacted by COVID.
The credit can be claimed on your payroll tax return. These payroll tax returns can be amended up to three years after the date they were filed. For example, if you are a Pennsylvania dealership and your business was partially shut down due to the state government order denying you the ability to sell vehicles during the second quarter of 2020 and you filed your quarterly payroll tax return in July 2020, you have until July 2023 to file an amended return to claim the credit.
We have had a lot of success working with our dealership clients to identify and claim these credits. You can reach out me or any other SD Auto Dealer Advisor to assist you in figuring out your eligibility and calculating the credit. We look forward to hearing from you.
For any questions please reach out to Steven A. Barber – Shareholder, Tax Advisory Services. 412-697-5463
