Identifying Government Shutdown Orders To Substantiate Your ERC Claim

When applying for Employee Retention Credits using our questionnaire, if a business owner attests that their business experienced a full or partial suspension due to COVID-related government restrictions or mandates, the business owner will need to provide information to substantiate their claim.

The answer to Question 70 in IRS Notice 2021-20 states that eligible employers should maintain in their records documentation showing any governmental order to (fully or partially) suspend their company's business operations. This notice provides similar guidance in response to Question 12 related to the company's suppliers' ability to deliver goods, supplies and materials critical to your business operations.

In your claim, you attest to the facts and circumstances to establish your own eligibility. Based on your attestation, the IRS issues your reimbursement for the quarters in which you attest your business operations were impacted. You should maintain that documentation to show if you were called upon to show the documentation supporting your claim.

One of the most complicated aspects of figuring out ERC eligibility is understanding the government shutdowns and how they may have affected your business. To better understand this daunting task, you could try to decipher pages of text on the IRS website or check out the latest tool from ERC Specialists. We’re proud to introduce the government shutdown list, an interactive map built to empower your small business so you can better understand ERC eligibility with confidence. To access the list, click here:

https://ercspecialists.com/shutdown-orders

You'll then see an interactive map of the United States. This map provides information on various government shutdowns at state, county, and municipal levels. You can access the state-level mandates by clicking on any state. For more localized data, select your county from the drop-down menu. This will reveal county or municipality-specific shutdown information. Our tool is designed to help you locate government shutdown orders. You can explore state and local orders for both workplaces of business and your suppliers.

You will want to keep a copy on file of the specific orders that affected your business and that of your suppliers. They will be helpful and substantiate your claim to the IRS. Please remember that in order to be eligible for ERC, these orders must have had more than a nominal impact on your business. A more than nominal impact is defined as affecting greater than 10% of your total gross receipts or the total hours of service performed by your employees compared to the same calendar quarter in 2019.

Remember, this list serves as a guide. If you have any specific legal or accounting questions related to claiming the Employee Retention Credit, please consult with a professional tax or legal adviser. At DUB Financial, we're committed to empowering businesses with resources to identify disruptions so you can claim the ERC with confidence.