Employee Retention Credit is a business credit that provides a tax deduction for businesses that have retained their employees on payroll during COVID times. To be eligible for Employee Retention Credit, a business must meet certain eligibility criteria. You can consult an ERC specialist to know more about the eligibility criteria for claiming Employee Retention Credit.
Both complete suspension and partial suspension can make your business eligible for Employee Retention Credit. However, when it comes to partial suspension, it can be in different forms.
Here are what can be counted as a partial suspension to be eligible for Employee Retention Credit.
- Briefly stopping some operations throughout your day to clean or sanitize to combat COVID
Sometimes, it may be necessary for businesses to briefly stop certain operations during the day to clean or sanitize the business premises to combat COVID. During this brief period, if you have retained your employees on the payroll, then you can be eligible for Employee Retention Credit.
- Inability to meet with clients or vendors in person
Inability to meet with your clients or vendors in person can also be counted as a partial suspension. This can affect your business significantly and can make your business eligible for Employee Retention Credit.
- Cutting business hours (even a little)
If you have to cut a little from your business hours, then it will be considered a partial suspension, and your business can be eligible for Employee Retention Credit. This is similar to the case where you stop some of your operations briefly to clean or sanitize your business premises.
- Offering fewer products or services
When your business has to cut its product or service, then it is considered part of a partial suspension. And if you have cut a few of the products or services you provide during a partial suspension, then you are still eligible for Employee Retention Credit.
- Socially distancing clients or customers
Sometimes, it may be necessary for businesses to socially distance their clients and customers in order to keep them safe. This can also be considered a partial suspension. If you have maintained your business operations during this time period, then you can still be eligible for Employee Retention Credit.
- Temporarily or permanently shutting a business unit or department
Certain businesses might have to temporarily or permanently shut down a business unit or department. This can be considered a partial suspension. However, if the main business operations are still operational, then you are still eligible for Employee Retention Credit.
- Suffering a supply chain disruption
If your business is going through a supply chain disruption, then it will count as a partial suspension. And this can make your business eligible for Employee Retention Credit.