Texas Car Dealership Employee Retention Tax Credit for TX Auto Dealers (revised 2024)

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

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

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

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

Overall, Texas has an estimated 1,227 new car franchised brand dealerships in TX that were affected. This TX data is according to the National Automobile Dealers Association (NADA) Texas Auto Report.

Texas Car Dealership Retail Economic Data Statewide in TX:

– 1,227 new car dealerships in TX.

– $111.8 billion in total Texas car dealership sales.

– $7.1 billion in TX state sales tax paid on vehicle sales.

– 210,885 workers employed at dealerships in Texas.

– 96,582 direct worker jobs and 114,303 indirect jobs in TX.

– Average of 79 Employees (W-2) per auto dealership.

– Average of $85,982 in annual earnings per worker.

– $8.3 Billion in total Employee Payroll for Texas new car dealerships.

– $2,000,000,000 in state and federal income and payroll taxes paid in TX.

Other Texas new car and used car data statistics in TX:

– Texas Automobile Dealers Association (TADA)

– Texas Independent Automobile Dealers Association (TIADA)

Texas dealerships in cities affected the most included Abilene, Amarillo, Austin, Beaumont, Brownsville, College Station, Corpus Christi, Dallas-Fort Worth, Dallas-Plano-Irving, Fort Worth-Arlington, El Paso, Houston, Killeen, Laredo, Longview, Lubbock, McAllen, Midland, Odessa, San Angelo, San Antonio, Sherman, Texarkana, Tyler, Victoria, Waco, Wichita Falls, and other locations in Texas.

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

Key ERC Credit Takeaways You Will Learn:

  • Texas Car Dealerships Eligible: TX auto dealers can claim the Employee Retention Credit (ERC).
  • Significant Tax Relief: The ERC offers substantial aid to qualifying automotive businesses.
  • Understanding ERC Benefits: Learn how the ERC can financially benefit your dealership.
  • ERC Claiming Process: Insights into the procedure for claiming the ERC for your business.
  • Expert ERC Guidance: Professional advice available for TX car dealerships on ERC claims.

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

Texas Employee Retention Tax Credit for Car Dealerships, Auto Dealers and the Automotive Industry in TX

Texas car dealerships, automotive dealerships and automotive related businesses in TX 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.

Texas 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 TX 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 Texas.

TX Car Dealership Employee Retention Credit, How it Works for Auto Dealers in Texas

With the Texas requirements and amount of the ERTC tax credits continually changing with the ERC program, TX 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 Texas 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 TX.

Texas Employee Retention Credit Eligibility Requirements for Auto Dealers, Automotive Dealerships and Car Dealerships in TX

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

For a Texas 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 Texas 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 Texas, 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 TX

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

Texas Car Dealership Vehicle Sales Decreased in TX

Did your TX 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 Texas automotive business, you qualify. This is a good example for you to claim and receive the ERC tax credit in Texas.

Limitations on Car Showroom or Auto Repair Service Capacity Texas

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

Texas Impacted Business and Consumer Travel in TX

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

TX New or Used Car and Truck Vehicle Cancellations and Refunds Due to COVID in Texas

Maybe your TX 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 Texas shutdown, and then faced many business capacity and travel restrictions, consumers canceled travel plans and were not driving as much, according to the Texas Department of Transportation. This caused many TX automotive dealership operations to refund deposits and lose further revenue. This was a financial loss to the economy and auto dealers in Texas

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

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

Texas Car Dealership Low Inventory Due to Shipping and Supply Chain Issues in TX

In Texas, 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. Texas franchised car dealerships were experiencing restricted new car and truck inventory at auto dealerships in TX 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 TX.

Calculating Your Texas Auto Dealer Employee Retention Credit for Car Dealerships in TX

Accurately calculating the Texas 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 TX.

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

Although the process of applying for the ERTC for your Texas 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 Texas.

Conclusion and Summary for Texas Car Dealership, Auto Dealer, and Automotive Employee Retention Credit in TX

To ensure your Texas 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 Texas government shutdown orders or restrictions on your Texas car dealership should be documented.

By understanding the rules of the employee retention credit, car dealerships, auto dealers, automotive businesses and companies in Texas 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 Texas to recover some financial losses.

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

Disaster Loan Advisors™ can assist your Texas 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 Texas.

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

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