Minnesota Car Dealership Employee Retention Tax Credit for MN Auto Dealers (revised 2024)

Cover Image Credit: 123RF.com / Serezniy / Disaster Loan Advisors.

Minnesota car dealerships, auto dealers, new and used truck dealers, and other automotive related vehicle businesses in MN that were impacted financially by the COVID pandemic will automatically qualify certain periods of time for the employee retention tax credit refund in MN.

Minnesota went into lockdown mode in March 2020 when Minnesota Governor Walz issued mandated executive orders that forced the closure of car businesses throughout Minnesota, including most car, truck, and automobile related businesses. Many car dealership employees in Minnesota were temporarily out of work from closures in MN.

This caused Minnesota auto dealers, auto groups, dealership owners and investors from automotive related companies with multiple rooftop locations in Minnesota to suffer financially during 2020 and 2021 from these executive orders in MN.

When Minnesota slowly started to reopen, business capacity was restricted and limited in Minnesota. Plus, many MN consumers were staying at home, not driving anywhere, and not shopping for new or used cars and trucks in MN.

Overall, Minnesota has an estimated 339 new car franchised brand dealerships in MN that were affected. This MN data is according to the National Automobile Dealers Association (NADA) Minnesota Auto Report.

Minnesota Car Dealership Retail Economic Data Statewide in MN:

– 339 new car dealerships in MN.

– $17.3 billion in total Minnesota car dealership sales.

– $1.1 billion in MN state sales tax paid on vehicle sales.

– 41,145 workers employed at dealerships in Minnesota.

– 19,402 direct worker jobs and 21,743 indirect jobs in MN.

– Average of 57 Employees (W-2) per auto dealership.

– Average of $66,885 in annual earnings per worker.

– $1.3 Billion in total Employee Payroll for Minnesota new car dealerships.

– $368,000,000 in state and federal income and payroll taxes paid in MN.

Other Minnesota new car data statistics in MN:

– Minnesota Automobile Dealers Association (MADA)

Minnesota dealerships in cities affected the most included Duluth, Fargo, Grand Forks, La Crosse, Mankato, Minneapolis-St. Paul, Rochester, St. Cloud, and other locations in Minnesota.

See how your Minnesota automotive related business might qualify for the Minnesota Employee Retention Credit IRS Tax Refund for your car, truck, vehicle business in MN. Schedule Your Free Minnesota Car Dealership ERC Consultation today.

Key ERC Credit Takeaways You Will Learn:

  • MN Car Dealerships ERC Eligibility: Car dealerships in MN established before Feb 15, 2020, may qualify for the ERC.
  • Refundable Tax Credit Benefits: Learn about the substantial tax credit available to eligible Minnesota car dealerships.
  • Maximizing Your ERC Claim: Understand the steps to claim the ERC and maximize your dealership’s financial benefit.
  • ERC Impact on MN Dealerships: Discover how the ERC can provide financial relief to your car dealership in Minnesota.
  • Navigating the ERC Process: Get insights into the process of claiming the ERC for your Minnesota car dealership.

See Important 2024 Employee Retention Tax Credit Deadline Information at the Bottom of This Article.

Table of Contents

Minnesota Employee Retention Tax Credit for Car Dealerships, Auto Dealers and the Automotive Industry in MN

Minnesota car dealerships, automotive dealerships and automotive related businesses in MN are eligible to claim the Employee Retention Credit (ERC). They can receive up to 50% of their qualified wages paid between March 12th, 2020, and December 31st, 2020, in the form of a refundable tax credit from the IRS.

Minnesota car dealerships and related businesses that were established before February 15th, 2020, can receive a refundable tax credit amounting to 70% of qualified salaries and wages paid between January 1st, 2021, and September 30th, 2021. For MN auto dealers or car dealerships started or acquired after that date (referred to as a Recovery Start-up business), they are eligible for employee wage reimbursement up until December 31st, 2021.

The employee retention credit may be retroactively claimed for 2020 and 2021, through 2023, 2024, and 2025 for your car dealership, auto dealerships or automotive related business in Minnesota.

MN Car Dealership Employee Retention Credit, How it Works for Auto Dealers in Minnesota

With the Minnesota requirements and amount of the ERTC tax credits continually changing with the ERC program, MN car dealerships, auto dealers, and automotive dealership owners and principals may find it difficult to understand if they qualify and how much they can claim. 

To maximize the benefits from this Minnesota automotive employee retention tax credit, you must understand which quarters are eligible as well as which employees, wages, and payments meet the criteria for receiving the tax credit for your dealership in MN.

Minnesota Employee Retention Credit Eligibility Requirements for Auto Dealers, Automotive Dealerships and Car Dealerships in MN

The Minnesota automotive dealership industry can take advantage of the employee retention credit in several ways.

For a Minnesota car dealership related business to be eligible for the program, it must have gone through an entire or partial closure because of COVID-19 government regulations or any other kind of government-mandated shut down during certain periods in either 2020 or 2021 as a result of this global pandemic.

Another way is for your Minnesota car dealership entity to demonstrate that it has had either a 2020 quarter with gross receipts at least 50% lower than the same quarter in 2019, or in 2021, quarters with 20% fewer gross receipts compared to the corresponding quarters of 2019. Each three-month period of 2020 and 2021 should be compared to its equivalent month period in 2019.

In Minnesota, Did Your New Car, Used Car, Truck Dealership or Automotive Business Experience any of These?

Full or Partial Shutdown of Your Car Dealership Location in MN

If your car dealership or automotive dealership location in MN was fully or partially shut down for even a few days due to COVID-19, it would qualify your Minnesota auto dealership for the ERC tax credit. There are multiple other ways to qualify and claim your Minnesota ERC credit for your MN car dealership to help financially recover. Even if your Minnesota automotive company received an SBA Paycheck Protection Program (PPP) loan, you may still qualify.

Minnesota Car Dealership Vehicle Sales Decreased in MN

Did your MN dealership sales drop? Not sell as many new or used vehicle units as compared to 2019? In this case, if you can show nominal harm of 10% or more in declining sales or units for your Minnesota automotive business, you qualify. This is a good example for you to claim and receive the ERC tax credit in Minnesota.

Limitations on Car Showroom or Auto Repair Service Capacity Minnesota

Due to the shutdown and partial-shutdown in Minnesota, your automotive operations greatly reduced capacity due to government mandates and orders. This means that even if your MN car dealership or automotive repair business did not meet adequate revenue losses, you can still be eligible for the ERTC tax credit from mandated Minnesota restrictions from executive orders.

Minnesota Impacted Business and Consumer Travel in MN

The inability of Minnesota residents, tourists, and business travelers to drive around in Minnesota lead to substantial losses. With many public events and gatherings in MN canceled or postponed, caused most Minnesota residents to stay at home. This created massive lost sales and revenue potential for many car dealerships in Minnesota. Therefore, you may qualify for the ERC tax credit if your automotive business has been affected by these limitations in MN.

MN New or Used Car and Truck Vehicle Cancellations and Refunds Due to COVID in Minnesota

Maybe your MN automotive business had vehicle buyers wanting to cancel their new or used car or truck order or car lease, and did not want to take delivery or renew their lease. When Minnesota shutdown, and then faced many business capacity and travel restrictions, consumers canceled travel plans and were not driving as much, according to the Minnesota Department of Transportation. This caused many MN automotive dealership operations to refund deposits and lose further revenue. This was a financial loss to the economy and auto dealers in Minnesota

No In-Person Selling or Face-to-Face Auto, Truck, Car Sales in MN

Due to the pandemic, MN auto dealers could not sell any cars or trucks during the shutdown periods. This was an obstacle for Minnesota auto dealers trying to accommodate new and used car buyers. The vehicle buying experience was taken away. If your MN automotive business dealt with this situation, or had severely limited business and operations capacity due to Minnesota mandated orders, your dealership will qualify for the ERC tax credit.

Minnesota Car Dealership Low Inventory Due to Shipping and Supply Chain Issues in MN

In Minnesota, automobile manufacturers continued to limit new vehicle production and inventories throughout 2021 and 2022 due to the semiconductor microchip shortage that began in early 2021. Minnesota franchised car dealerships were experiencing restricted new car and truck inventory at auto dealerships in MN and across the country. New vehicle inventory on the ground and in transit was consistently stuck at over one million vehicle units nationwide and in MN.

Calculating Your Minnesota Auto Dealer Employee Retention Credit for Car Dealerships in MN

Accurately calculating the Minnesota employee retention credit for your automotive dealership employees requires attention to detail, especially when it comes to determining your total payroll gross wages paid during each quarter to your workforce. Without accurately calculating this figure, you won’t be able to maximize the full tax benefits of this ERC credit. Therefore, having a comprehensive understanding of how best to calculate these figures is essential to maximize your car dealership related business tax credit in MN.

How Minnesota Car Dealerships, Auto Dealers, and Automotive Employers in MN Can Claim the Employee Retention Credit

Although the process of applying for the ERTC for your Minnesota company has changed a bit, there’s still time to claim your ERC tax refund. Remember that this window won’t be open forever. It will cease in 2023, 2024, and 2025 based on the past 2020-2021 quarter evaluations. Don’t worry about running out of funds either. These IRS business tax refunds are calculated using each business’ qualifications and financials. The only way you can miss out is by not filing prior to the given deadlines for your car dealership in Minnesota.

Conclusion and Summary for Minnesota Car Dealership, Auto Dealer, and Automotive Employee Retention Credit in MN

To ensure your Minnesota car dealership or automotive related business is in compliance with the Employee Retention Credit, it’s critical to have all original records, including payroll, W-2s, original 941’s filed, and other documents related to auto dealership employee wages. Additionally, any Minnesota government shutdown orders or restrictions on your Minnesota car dealership should be documented.

By understanding the rules of the employee retention credit, car dealerships, auto dealers, automotive businesses and companies in Minnesota can make sure they’re getting all the IRS tax credit benefits owed to them. The ERTC provides an opportunity for car dealerships affected by COVID-19 in Minnesota to recover some financial losses.

Minnesota Car Dealerships and Automotive Businesses Qualify for the Employee Retention Tax Credit (ERC / ERTC) in MN: Claim Up To a $26,000 Refund Per Dealership Employee for Your Automotive Business in MN

Disaster Loan Advisors™ can assist your Minnesota car dealership and automotive business with the complex and confusing Employee Retention Credit (ERC) and Employee Retention Tax Credit (ERTC) program, without you having to sacrifice an excessive percentage % of your hard-earned ERC refund. 

DLA doesn’t charge a percent % like many companies do. Our flat fee structure is fair and reasonable based on the amount of work involved. Keep More of Your Refund™ 

Depending on eligibility, car and truck dealership owners, automotive professionals, and auto dealer principals and partners can receive up to $26,000 per automotive workforce 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 automotive dealership in Minnesota.

Schedule Your Free Minnesota Automotive Employee Retention Credit Consultation to see what amount of employee retention credit tax refund you qualify for your car dealership in Minnesota.

ERC Deadline Urgency in 2024

April 15, 2024 Deadline for the 2020 ERC Tax Year

The deadline is coming up for the final opportunity to retroactively claim your business Employee Retention Credit for the past 2020 tax year. With the April 15, 2024 deadline fast approaching, we urge you; don’t let this final chance pass!

While not all businesses will qualify, as it depends on multiple factors per IRS Rules and Guidelines, you might be leaving significant financial relief on the table from prior COVID impact to your business during the past 2020 and 2021 business operation years.

Last year, in September 2023, the IRS temporarily paused processing ERC Claims for the remainder of last year. We at Disaster Loan Advisors (DLA) predicted this over one year ago when we made this ERC video warning business owners. See the ten-minute mark of the video for details. 


Even though the IRS has temporarily paused processing, you will still want to check eligibility and file now (if you qualify) because once the IRS will resume processing, ERC tax credit claims are processed in the order they are received.

If you haven’t previously filed for the ERC Credit, it is worth scheduling a phone call to at least explore your possible eligibility from both the past 2020 and 2021 business tax years. Contact us today for a deep-dive analysis to determine if your business qualifies one or more quarters from the 2020 and / or 2021 tax years.

Mark Monroe