Question #19:
Are an employer’s operations considered to be partially suspended for purposes of the employee retention credit if the employer is required to reduce its operating hours by a governmental order?
Found under the D. Full or Partial Suspension of Trade or Business Operations section of the Employee Retention Credit (ERC) IRS Notice 2021-20 with updated guidance to help business owners follow the current ERC rules.
The answer to question #19, Are an employer’s operations considered to be partially suspended for purposes of the employee retention credit if the employer is required to reduce its operating hours by a governmental order?, can be found below.
ERC IRS Notice 2021-20 Question #19:
D. Full or Partial Suspension of Trade or Business Operations
Are an employer’s operations considered to be partially suspended for purposes of the employee retention credit if the employer is required to reduce its operating hours by a governmental order?
Yes. An employer that reduces its operating hours due to governmental order is considered to have partially suspended its operations since the employer’s operations have been limited by a governmental order.
Example: Employer K operates a food processing facility that normally operates24 hours a day. A governmental order issued by the local health department requires all food processing businesses to deep clean their workplaces once every 24 hours in order to reduce the risk of COVID-19 exposure. In order to comply with the governmental order, Employer K reduces its daily operating hours by five hours per day so that a deep cleaning may be conducted within its workplace once every 24 hours. Employer K is considered to have partially suspended its operations due to the governmental order requiring it to reduce its hours of operation.
For more information about the Employee Retention Credit (ERC) IRS Notice 2021-20, visit the Internal Revenue Service (IRS) Department of the Treasury, official IRS.gov tax website.
Conclusion and Summary on Are an employer’s operations considered to be partially suspended for purposes of the employee retention credit if the employer is required to reduce its operating hours by a governmental order? – #19 ERC IRS Notice 2021-20
The answer to Question #19: “Are an employer’s operations considered to be partially suspended for purposes of the employee retention credit if the employer is required to reduce its operating hours by a governmental order?” was answered in detail above. It was found under section “D. Full or Partial Suspension of Trade or Business Operations” in IRS Notice 2021-20.
Leave a comment below if you have further questions on the Employee Retention Credit (ERC) or for clarifications on Are an employer’s operations considered to be partially suspended for purposes of the employee retention credit if the employer is required to reduce its operating hours by a governmental order?
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Cover Image Credit: Irs.gov / IRS Notice 2021-20 / Disaster Loan Advisors.
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