Virginia Car Dealership Employee Retention Tax Credit for VA Auto Dealers (updated 2024)

Cover Image Credit: / Milkos / Disaster Loan Advisors.

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

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

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

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

Overall, Virginia has an estimated 449 new car franchised brand dealerships in VA that were affected. This VA data is according to the National Automobile Dealers Association (NADA) Virginia Auto Report.

Virginia Car Dealership Retail Economic Data Statewide in VA:

– 449 new car dealerships in VA.

– $27.7 billion in total Virginia car dealership sales.

– $1.2 billion in VA state sales tax paid on vehicle sales.

– 61,060 workers employed at dealerships in Virginia.

– 30,452 direct worker jobs and 30,608 indirect jobs in VA.

– Average of 68 Employees (W-2) per auto dealership.

– Average of $75,036 in annual earnings per worker.

– $2.3 Billion in total Employee Payroll for Virginia new car dealerships.

– $685,000,000 in state and federal income and payroll taxes paid in VA.

Other Virginia new car and used car data statistics in VA:

– Virginia Automobile Dealers Association (VADA)

– Virginia Independent Automobile Dealers Association (IADA)

Virginia dealerships in cities affected the most included Blacksburg, Charlottesville, Harrisonburg, Kingsport, Lynchburg, Richmond, Roanoke, Staunton-Waynesboro, Virginia Beach, Washington, Washington-Arlington-Alexandria, Winchester, and other locations in Virginia.

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

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

Table of Contents

Virginia Employee Retention Tax Credit for Car Dealerships, Auto Dealers and the Automotive Industry in VA

Virginia car dealerships, automotive dealerships and automotive related businesses in VA 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.

Virginia 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 VA 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 Virginia.

VA Car Dealership Employee Retention Credit, How it Works for Auto Dealers in Virginia

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

Virginia Employee Retention Credit Eligibility Requirements for Auto Dealers, Automotive Dealerships and Car Dealerships in VA

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

For a Virginia 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 Virginia 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 Virginia, 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 VA

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

Virginia Car Dealership Vehicle Sales Decreased in VA

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

Limitations on Car Showroom or Auto Repair Service Capacity Virginia

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

Virginia Impacted Business and Consumer Travel in VA

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

VA New or Used Car and Truck Vehicle Cancellations and Refunds Due to COVID in Virginia

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

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

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

Virginia Car Dealership Low Inventory Due to Shipping and Supply Chain Issues in VA

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

Calculating Your Virginia Auto Dealer Employee Retention Credit for Car Dealerships in VA

Accurately calculating the Virginia 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 VA.

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

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

Conclusion and Summary for Virginia Car Dealership, Auto Dealer, and Automotive Employee Retention Credit in VA

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

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

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

Disaster Loan Advisors™ can assist your Virginia 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 Virginia.

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

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