Genesis Dealer Employee Retention Credit

Image Credit: © Nikolay Antonov / Gar1984 / 123RF.com, Licensed for Editorial Use.

Are you a Genesis dealer? Do you own or operate a Genesis auto dealership?

Wondering if your Genesis dealership retail location qualifies for the Employee Retention Credit (ERC) due to the negative impact of COVID during 2020 and 2021? 

As a franchised Genesis dealer, yes it does, and here is why.

Your Genesis dealership qualifies for the employee retention tax credit (ERTC), depending on the mandated state government, county, city, or municipality restrictions placed on your Genesis dealership location during the COVID pandemic. Even if your revenue increased during 2020 and 2021, vs. 2019, you still qualify.

Another key reason all Genesis dealers will qualify for the employee retention credit is that Genesis vehicles are manufactured by Hyundai Motor Group, which faced major production shortages and Genesis supply chain disruptions throughout the pandemic. Genesis vehicle assembly plants ceased or slowed production during the pandemic, drastically reducing new inventory of Genesis vehicles. 

Genesis operations were further disrupted when they could not get automotive chips essential to producing Genesis vehicles. Semiconductor factories shut down manufacturing operations globally caused by the pandemic. No automotive chips meant a huge delay and shortage of Genesis vehicle units not being shipped to Genesis dealers around the country. This caused Genesis prices to soar. Vehicle shortages and supply chain issues have persisted throughout 2021, 2022, and 2023 for Genesis.

If your Genesis dealership was forced to close your showroom, not go on test drives, limit business capacity indoors, or reduce your hours of operation at your Genesis retail location, this qualifies your Genesis dealership location under the IRS Employee Retention Tax Credit (ERTC) “partial shutdown” rules. 

Meaning, your Genesis dealership was still allowed to sell vehicles but was hindered by limited capacity. Even if your location did not have to be fully shutdown, you were mandated to close your Genesis indoor showroom, and / or reduce your hours of operation at your Genesis dealer location

Under the IRS ERC rules and regulations, your Genesis business qualifies because your operations were disrupted due to government intervention by forcing you to reduce your business capacity. This qualifies your Genesis dealer for the ERC Credit and tax refund from the start date of government restrictions, to the end date when all dealership capacity restrictions were lifted.

This is exciting news for all Genesis dealers and owners to help offset and recoup costs from the negative impact of COVID on all of your dealership brands, and not just the Genesis brand.

Many Financial and Accounting Professionals, CPAs, Financial Planners, Advisors, and Attorneys are unknowingly advising their Genesis dealership clients wrong because they do not fully understand all the Employee Retention Credit tax guidelines as they relate to automobile car and truck dealerships, and other automotive-type businesses.

Schedule Your Free Genesis Dealership Employee Retention Credit Consultation to see how much your Genesis dealership location qualifies for the ERC Refund. There is still time. It can be retroactively claimed in 2023, 2024, and 2025, without having to pay a percentage of your hard-earned ERC Refund.

Table of Contents

Background on Genesis Supply Chain Disruption Problems and Negative Impact on Genesis Dealers

Genesis has approximately 271 dealerships in the United States (USA).

When large amounts of Genesis jobs, on both the manufacturing auto workers level and dealership environment level, faced layoffs, furloughs, and production shutdowns due to pandemic-driven disruptions, the White House stepped in to announce a plan to strengthen the resiliency of the automotive chip supply chain for major automakers like Genesis and others.

Between the shipping supply chain being severely delayed globally, and the semiconductor computer chip Genesis supply chain disruption, even though vehicle prices soared due to high demand and less supply, Genesis dealerships were selling far less units of both new and used vehicles.

All caused by the COVID-19 pandemic, there were little to no new Genesis cars and trucks being shipped to Genesis dealerships. Thus, less vehicle units to sell. More car buying customers wanted to get a new Genesis model vehicle, but couldn’t.

Any Genesis dealer can easily show negative harm to their dealership by comparing the number of Genesis vehicle units sold in 2019 for each quarter, and then compare the number of vehicle units sold for each quarter in 2020 and 2021. 2020 vs. 2019 and 2021 vs. 2019. According to IRS rules, if a business like an automotive Genesis dealership can show a nominal impact to business operations, which is a decline of -10% or more, they would qualify for the employee retention credit.

To find out more about Genesis vehicle brands, visit the Genesis company website at Genesis.com.

Image Credit: © Jetcityimage / 123RF.com, Licensed for Editorial Use.

Genesis Employee Retention Credit For Genesis Dealerships

Genesis dealer owners are not alone. The car dealership industry continues to struggle with the economic impact of the COVID pandemic, high inflation, and a possible recession. Genesis dealership owners are looking for ways to support their Genesis employees and keep their businesses afloat, especially Genesis car dealership owners who have a healthy investment in dealer fees and other expenses to recoup and earn a return from owning a Genesis dealership.

The Employee Retention Credit (ERC) or Employee Retention Tax Credit (ERTC) was established by the Coronavirus Aid, Relief, and Economic Security (CARES) Act to help dealership and automotive type business employers retain their staff during economic hardship and negative impact due to COVID.

The Internal Revenue Service (IRS) ERC Tax Refund program is an important tool for Genesis dealership owners, principals, and employers. The ERTC offers tax relief and provides a financial incentive to retain employees during the past economic disruption that occurred during 2020 and 2021. 

For Genesis dealers, having a thorough understanding of the ERC credit and how it applies to their Genesis dealership, owners and principals can ensure they take full advantage of this tax credit to support their Genesis employees and locations.

Here is how Genesis dealership owners and principals can take advantage of this valuable IRS tax credit to help their Genesis location stay open with positive cash-flow to continue keeping their W-2 employees on the payroll.

Employee Retention Tax Credit For Genesis Dealership Owners

The Employee Retention Credit for Genesis dealerships is a tax credit available to eligible Genesis dealerships and other automotive businesses. It provides dealership employers with a federal income tax credit of up to $26,000 per employee for wages paid during the pandemic years of 2020 and 2021. 

This tax incentive is intended to help reduce the financial burden of having retained Genesis employees who may otherwise have been laid off or suspended due to the economic downturn caused by the pandemic.

The ERC applies to gross wages paid to your Genesis dealer employees between March 13, 2020 and September 30, 2021, only for each quarter during this time frame that may have qualified. 3/13/20 to 9/30/21 time frame is for Genesis dealers that were in existence prior to COVID. 

For Genesis locations that opened after February 15, 2020, this dealership is considered a recovery start-up business, and may qualify through December 31, 2021 (12/31/21) of the 4th quarter.

Qualified Genesis dealerships in 2020 can claim up to $5,000 maximum per employee for all of 2020. This is based on up to 50% of a Genesis employee’s qualified wages. Eligible Genesis employers must also have experienced either a full or partial shutdown due to orders, OR a capacity restriction from a governmental authority, OR have experienced a significant decline in gross receipts compared with the same quarter in 2019.

Almost every state forced Genesis dealerships to close their indoor showrooms, and / or limited their business capacity. These periods of time occurred in which the state, county, and city your Genesis dealership is located, will qualify the quarters and periods of time the capacity restrictions were imposed on your Genesis location.

For all of 2020, Genesis employers can access up to $5,000 maximum for eligible employees, and up to $7,000 per quarter, per employee, for eligible employees (for each quarter) in 2021. This means up to a combined $26,000 to $33,000 per employee depending on certain factors.

For Genesis Dealerships, What Are The Eligibility Requirements For The Employee Retention Credit?

To qualify for the ERC, Genesis dealerships must have experienced a full or partial suspension of their operations due to orders from a governmental authority limiting their ability to operate during specific periods in 2020 due to the pandemic.

Another way to qualify is if your Genesis dealership had experienced a significant decline in gross receipts of at least 50% in 2020, or 20% in 2021, compared to the same calendar quarter in 2019, a pre-COVID year for your Genesis dealer. 2020 vs. 2019 and 2021 vs. 2019, quarter by quarter. 

If you had less than 100 Genesis employees paid in any given quarter in 2020 that qualifies, then all gross wages are counted, whether the employee was full-time or part-time.

In 2021, if your Genesis dealership had less than 500 employees paid in any given quarter in 2021 that qualifies, then all gross wages are counted, whether the employee was full-time or part-time working for your Genesis dealer.

The Internal Revenue Service (IRS) provides the following specific dealership examples to explain “full or partial closure orders” during a calendar quarter:

Social Distancing Through Capacity Restrictions at Your Genesis Location

It appears that government orders restricting indoor showroom capacity or new car test-drives with potential car-buying customers at your Genesis retail location has more than a nominal impact on the dealership’s business operations under the facts and circumstances.

Genesis Dealership Showroom Is Closed Indoors, But Open Outdoors

Following mandated orders, the Genesis dealership could operate only its outdoor area during this period. Since, under the circumstances, a significant portion of the Genesis dealership’s business operations is having a sales person sit with a potential new car or truck buyer in their office, face-to-face, or doing a test drive of a new or used car, having been restricted by a government order, the Genesis dealership’s business operations were partially suspended.

Genesis Dealership New Car Test Drives Were Restricted

Due to a government order closing all dealerships, and similar automotive establishments for indoor face-to-face sales, a Genesis dealership must close its showroom area.

Genesis dealerships that qualify for the ERC can receive a tax refund cash incentive equal to a percentage of qualified gross wages paid:

  • Services and other gatherings were restricted by government orders; or
  • There was a significant decline in gross receipts for these Genesis dealerships.

What If My Genesis Dealership Received a Paycheck Protection Program (PPP) Loan?

Good news Genesis dealership owners!

Due to recent changes in the ERC program, there are still ERC refund benefits available to organizations and Genesis dealers that have previously received PPP Loans for their dealership.

The Genesis PPP Loan (or loans), if your Genesis location received two PPP loans, just needs to be correctly subtracted out from the date it was received against the qualified gross wages paid to your employees at Genesis.

Besides Genesis dealers, there are many more types of automotive dealerships that are eligible for the ERC credit. If your business serves any type of automotive business similar to Genesis, you are probably eligible.

How Genesis Dealers Can Claim The Employee Retention Tax Credit?

Once your Genesis car dealership location has met all the eligibility requirements for the Employee Retention Credit, you can claim it on IRS Form 941-X

It seems simple enough, however, the ERC Credit is highly confusing and complex when dealing with the ERC program. 

See How Much Your Genesis  Dealership Qualifies For The ERC Credit. Schedule Your Free Genesis Dealer ERC Tax Refund Consultation For Expert Help In Claiming The ERTC Credit For Your Genesis Dealership.

When dealing with IRS tax matters, federal payroll taxes, income taxes, tax returns and other matters before the IRS, it’s always best to have expert help to stay safe and compliant.

Additionally, you should keep all your Genesis records and supporting documents in case the IRS has any questions. As a dealership employer, understanding and meeting the expectations of the Employee Retention Credit for Genesis Dealerships is critical to taking advantage of the available tax credits.

Most importantly, Genesis employers must accurately calculate the ERC Credit amount, provide the necessary documentation to support their ERC claim, and ensure they comply with all relevant laws. Genesis employers are also responsible for keeping accurate records of their employee’s wages and hours worked.

You can also check out the detailed guide on How to Claim the Employee Retention Credit (ERC)?

Is The Employee Retention Tax Credit Only For Genesis Dealerships?

No, the employee retention tax credit is not only for Genesis dealerships. The Employee Retention Tax Credit (ERTC) was created as part of the Coronavirus Aid, Relief and Economic Security (CARES) Act to support business owners and Genesis dealers who have been affected by the Coronavirus pandemic.

This tax credit is available to all businesses regardless of size or industry, so auto dealership employees are not the only ones eligible for this benefit. 

To qualify for these tax benefits, Genesis employers must demonstrate that they experienced either a full or partial suspension of business operations due to governmental orders related to COVID-19 or had significant revenue losses due to the virus.

Besides Genesis dealers, the ERC program is open to all types of businesses, including educational institutions, churches and other religious organizations, nonprofit organizations, and tribal governments.

Can A Genesis Dealership Be Eligible For The ERC Credit And PPP Loan?

Yes! Even if your Genesis dealership received an SBA Paycheck Protection Program (PPP) loan, an Economic Injury Disaster Loan (EIDL), you are still eligible under current IRS rules and regulations, provided certain requirements are met.

The Genesis payroll expenses that were paid by PPP loans may not be considered eligible for ERC. You can not claim ERC on the same wages paid by PPP loan. The IRS doesn’t want double-dipping of the same exact wages paid with PPP month to your Genesis employees.

Are Wages at Genesis Eligible For The Employee Retention Tax Credit? 

Yes! As part of this relief measure, certain qualified wages are eligible for reimbursement via an employer’s payroll tax credits. All wages are included in qualified wages if they meet specific criteria as determined by the Internal Revenue Service (IRS).

If the W-2 wages are more than $20 a month and are subject to FICA then those tipped wages are eligible for ERTC.

What Is The Genesis Full-Time or Part-Time Employee Count For ERC Eligibility for 2020 and 2021?

There is confusion because the IRS changed the criteria in 2021 for ERTC.

If you had less than 100 Genesis employees paid in any given quarter in 2020 that qualifies, then all gross wages are counted, whether the employee was full-time or part-time.

In 2021, if your Genesis dealership had less than 500 employees paid in any given quarter in 2021 that qualifies, then all gross wages are counted, whether the employee was full-time or part-time working for your Genesis dealer.

Would It Be Better If I Combined The Gross Receipts From All Of My Genesis Dealer Dealerships?

Dealerships in a group may claim the credit for gross receipts if the value of their gross receipts is equal to or greater than an aggregate sum that’s specified by regulators.

If the group meets the criteria, each individual entity may claim the credit, regardless of whether the group as a whole achieved the minimum threshold.

If the gross receipts present for the group as a whole do not meet the requirements, none of the entities may claim the credit even though some dealerships individually had a decline.

How Do I Compare My Q1 2020 Gross Receipts With My Q1 2019 Gross Receipts If I Didn’t Start My Genesis Dealership Until Mid-Q2 2019?

If you opened your Genesis dealer at the beginning of a quarter this year, you can calculate the gross receipts you have for the entire year. The first 3 months of the Genesis opening in this year can be used as the basis for this calculation.

More Frequently Asked Questions (FAQs) About Genesis Brand Dealers and Dealerships

Regarding Genesis manufactured automotive vehicles, cars, trucks, and franchised Genesis Dealerships, here is a list of other commonly asked questions about Genesis Dealers.

• How many Genesis dealers are in the USA?

• How many employees do Genesis dealerships have?

• Who are the Top 10 volume Genesis dealers in America for 2023?

• Who is the largest Genesis dealer in the USA in 2023?

• Who are the Top 10 volume Genesis dealers in California?

• Who is the largest Genesis dealer in California?

• Who are the Top 10 volume Genesis dealers in Texas?

• Who is the largest Genesis dealer in Texas?

• How can I find a Genesis dealer near me?

• How many Genesis dealerships in the world?

• Who is the largest Genesis dealer in the world?

• How many Genesis dealerships in the world?

• How many employees does Genesis have globally?

• Where can I find a list of all Genesis dealerships?

Conclusion and Summary for Genesis Dealers and Owners of Genesis Dealerships

In conclusion, Genesis auto dealerships have faced significant challenges due to the COVID pandemic, including government-mandated restrictions, production shortages, and supply chain disruptions. Despite these obstacles, there is a silver lining for Genesis dealers: they qualify for the Employee Retention Credit (ERC). This tax credit offers financial relief to businesses negatively impacted by the pandemic, helping them retain employees and offset financial losses.

Franchised Genesis dealers qualify for the ERC due to various factors: 

First, their operations were affected by government-imposed restrictions such as showroom closures, limitations on test drives, reduced indoor capacity, and shortened hours of operation. These restrictions classify the dealerships under the IRS Employee Retention Tax Credit “partial shutdown” rules, which encompass businesses that faced operational hindrances but were not required to fully shut down.

Second, Genesis dealerships experienced significant inventory shortages due to production and supply chain disruptions. Genesis faced considerable challenges during the pandemic, including factory shutdowns and a scarcity of essential automotive chips. These factors resulted in a limited supply of new Genesis vehicles and skyrocketing prices, further exacerbating the impact on dealerships.

It is crucial for Genesis dealers and owners to understand that they qualify for the ERC, regardless of their revenue trends during 2020 and 2021. This tax credit offers valuable support in mitigating the adverse effects of the pandemic on dealership operations, even if those operations were not completely shut down.

Unfortunately, many financial professionals, CPAs, and attorneys may not be fully aware of the nuances of the Employee Retention Credit as it applies to automotive businesses. Therefore, it is essential for Genesis dealers to seek guidance from experts with specific knowledge of the ERC tax guidelines to ensure they receive the full benefits to which they are entitled.

In summary, Genesis auto dealerships have faced unprecedented challenges during the COVID pandemic. However, the Employee Retention Credit offers a valuable opportunity to offset losses and help dealerships recover. By understanding the qualifications and seeking appropriate guidance, Genesis dealers can maximize this employee retention tax credit and emerge stronger as they navigate the post-pandemic landscape. Go Genesis.

Genesis Dealers and Owners: Get Help on How to Apply for the Employee Retention Tax Credit (ERC / ERTC): Claim Up To a $26,000 to $33,000 Refund Per Employee for Your Genesis Car Dealership

Disaster Loan Advisors can assist your Genesis dealership with the complex and confusing Employee Retention Credit (ERC) and Employee Retention Tax Credit (ERTC) program. 

Depending on eligibility, Genesis owners can receive up to $26,000 to $33,000 per employee based on the number of W2 employees you had on the payroll in 2020 and 2021. 

The ERC / ERTC Program is a valuable IRS tax credit you can claim for your Genesis dealership.

Schedule Your Free Employee Retention Credit Genesis Dealer Consultation to see how much of an employee retention tax credit your Genesis location qualifies for.

Leave a Reply

Your email address will not be published. Required fields are marked *