NEWITY's Free ERC Shutdown Consultation: How to Prepare, What to Expect, and What Comes Next
We recently sat down with NEWITY’s General Counsel and Executive Vice President, Eric Colandrea to discuss the Employee Retention Credit (ERC) application process at NEWITY. Eric is the head of the ERC Shutdown Group, which works with Members to ensure every business owner who qualifies for ERC can claim the credit and get their maximum refund while complying with IRS regulations.
If you applied for the ERC with NEWITY and you don’t qualify through revenue decline, don’t give up! There is an entire NEWITY team – led by attorneys – standing by to personally assist you through another route of ERC qualification, government shutdowns. When you receive an email asking you to schedule a call with NEWITY’s Shutdown Group, here’s what to expect from the call, tips for preparation, and information on what will come next.
What does it mean if I get contacted by NEWITY's ERC Shutdown Group?
NEWITY is dedicated to ensuring that every Member who qualifies for the ERC is able to claim their maximum credit. That is why the Shutdown Group exists: to uncover whether a business qualifies for the ERC due to the impact of government orders limiting commerce, travel or group meetings due to COVID-19 that fully or partially suspended business operations.
The first step in assessing ERC eligibility is determining if the business had sufficient revenue declines during any quarter after March 13, 2020 (50% decrease in gross receipts compared to 2019) or the first three quarters of 2021 (20% decrease in gross receipts compared to 2019). For more information on the specifics of ERC eligibility, read “What is the Employee Retention Credit (ERC) and Does My Business Qualify?” in the Insights Corner.
It is very common for a business not to qualify based on revenue decline requirements for every quarter. If your business has any quarters that do not qualify for the revenue decline requirement, you will be asked to schedule a free shutdown consultation with a specialist who will help uncover whether you qualify in those quarters under the other path for eligibility: “Your business experienced a full or partial suspension of business operations due to a governmental order limiting commerce, travel or group meetings (for commercial, social, religious or other purposes) due to COVID-19.”
In other words, do not worry if you receive an email from the Shutdown Group – they’re here to help. It just means NEWITY is covering all your bases to see if your business can qualify for any quarters.
What is the process for a call with the ERC Shutdown Group and how can I prepare?
If your business has any quarters that do not qualify under the revenue decline condition, you will be contacted via email and asked to schedule a call through a link with one of NEWITY’s shutdown interview specialists. The purpose of this 15 to 30-minute call is to go over the nature of your business and uncover the extent to which any government orders fully or partially suspended your business. On the call, your specialist may ask questions such as:
- Where is the exact location of your business?
- What does your business specifically do/offer? (e.g., if you have a restaurant, do you have indoor dining? Outdoor dining? Takeout or delivery services?)
- What do you remember about the time periods when the government orders were in place?
- If you were operating but subject to a governmental order limiting your business operations, how were you impacted?
Preparing for the call does not require a ton of work on your part – we simply ask that you try to remember the experience you lived through in 2020 and 2021. Try to think through the following topics and gather any records you may have with supporting information:
- Think about the time frames when government orders were in place that impacted you. Do you remember what the orders were or how they impacted your business? Do you have any records that show when you had to shut down or how restrictions specifically impacted you (e.g., a decrease in patients, restaurant customer seatings, enrollment numbers, etc.)?
- Then, think about the time frames when you were allowed to partially or fully reopen. What do you remember? To what extent were there limitations on your operations? (e.g., if you own a gym or daycare, were you allowed to reopen indoors but only partially? Were there restrictions on how many people you could have inside the business?)
For anything you cannot recall about applicable governmental orders, do not worry – the Shutdown Group will perform the external research necessary to support your ERC claim, including finding the exact dates of governmental orders that would have applied to your business. We are here to support you every step of the way.
Why NEWITY is so detailed in our ERC research: We ask these questions because the IRS says governmental orders had to have more than a nominal effect on the business to qualify for the ERC. NEWITY wants to truly understand how governmental orders impacted your business operations to ensure that you qualify for ERC, meet the IRS guidelines, and can avoid any problems if you are audited in the future.