A corporation has 2 businesses under the same name and same FEIN Number but the non essential business was closed through a government ordered shutdown. The essential business remained open. Is the Employee Retention credit for Q2 2020 allowed for just the non essential business wages paid during this time period? I want to ignore the gross receipts test for this answer. Thank you!!
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Yes, wages paid to employees who did not work for the closed, non-essential business would qualify for the ERC. If the business is fully or partially suspended by government order due to COVID-19 during the calendar quarter for Q2/2020-Q4/2020 (and the last 2 weeks of Q1), it qualifies for ERC.
I assume the 2 businesses are in the same industry since they operate under the same name and FEIN, so they both might qualify as a partial suspension by government order. If they had less than 100 employees in 2019, then the qualified wages paid to the employees who worked would be qualifying wages for purposes of the credit, less any PPP loan funds forgiven and used for payroll costs.
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