Retail Industries

The COVID-19 pandemic had a major effect on brick-and-mortar retail stores. Virtually every retail store in the United States was impacted by the pandemic and government restrictions. According to a report from Forbes Magazine, the retail sector was hit especially hard—as government shutdown rules and public health fears shifted consumers spending to e-commerce. The ERC is an important economic support option for retail businesses. Here are the two ways that a retailer can qualify for the Employee Retention Credit:

1. Have a substantial loss in revenue compared to pre-pandemic; or
2. Show that your business was impacted by a full or partial government order restrictions causing a partial suspension such as below.  

It is important to clarify that nearly every retail store that operates in the United States could qualify for the Employee Retention Credit. Retailers do not need to demonstrate any actual loss in revenue to qualify for the ERC.

A retailer can apply and be approved for a tax refund based on a government shutdown order, including a partial shutdown order.

Some notable examples of government restrictions that affected retail businesses include:

• Cleaning or sanitizing rules;
• Social distancing regulations and capacity rules;
• Stay-at-home orders;
• A disruption to the supply chain.