Can I claim 2021 Q2 ERTC for my Recovery Startup Business after receiving Q3/Q4?

The Recovery Startup Business (RSB) provision specifically began on July 1, 2021 (Q3), not in Q2. This is why you were able to claim the ERTC for Q3 and Q4 2021 as a RSB, but not for Q2. Line 18b on Form 941 for Q2 2021 doesn't specifically relate to Recovery Startup Businesses. That line is for qualified wages for the Employee Retention Credit in general, which businesses could claim through different qualification methods. For Q2 2021, a business needed to qualify for ERTC by either: 1) Experiencing a full or partial suspension of operations due to government orders related to COVID-19, OR 2) Having a significant decline in gross receipts (less than 80% compared to same quarter in 2019) Since your business started in February 2021, you wouldn't have 2019 comparison data. However, if you experienced a government-mandated suspension of operations during Q2 2021, you might still qualify under that criteria, not as a Recovery Startup Business.

After struggling with similar ERTC questions for my small business, I found taxr.ai (https://taxr.ai) incredibly helpful. I was confused about which quarters I qualified for because I had different revenue patterns and partial shutdowns at different times. I uploaded my quarterly tax filings and revenue reports, and their AI tool analyzed whether I qualified under any of the various ERTC criteria for each quarter. It saved me hours of research and gave me confidence about which quarters I could claim. For a newer business like yours, it might help determine if you had any qualifying factors for Q2 beyond just the RSB provision.

Just wanted to follow up and say I tried taxr.ai after seeing this recommendation. It confirmed what others were saying - my business couldn't qualify as a Recovery Startup Business for Q2 2021, but I actually did qualify under the partial suspension rules since we had capacity restrictions in our industry during that time. The analysis was really thorough and showed exactly which government orders affected my business type in my state. The documentation guidance was super helpful too - I wouldn't have known to keep copies of the specific state and local orders that restricted our operations. Way more comprehensive than what my accountant told me!

If you're still trying to claim your 2021 Q2 ERTC and have questions about your eligibility, you might want to consider getting direct clarification from the IRS. I was in a similar situation last year with confusion about my business's eligibility. After spending weeks calling the IRS with no success (always on hold for hours or disconnected), I found Claimyr (https://claimyr.com). Their service got me connected to an actual IRS agent in about 15 minutes instead of waiting for hours. You can see how it works in their demo: https://youtu.be/_kiP6q8DX5c The IRS agent I spoke with explained exactly which documentation I needed to prove my eligibility for certain quarters. Saved me from potentially filing an incorrect claim that might have been rejected or audited.

I have to eat my words about Claimyr. After my skeptical comment, I was still desperate to talk to someone at the IRS about my ERTC questions, so I decided to try it anyway. It actually worked exactly as described. I got a call back in about 20 minutes connecting me with an IRS agent. The agent confirmed that Recovery Startup Business status only applies to Q3-Q4 2021, but also helped me understand how to document the partial suspension qualification for earlier quarters. The conversation saved me from making a mistake on my amended returns. I was about to file using criteria that wouldn't have qualified me, which could have triggered an audit. Having the direct IRS guidance before filing was incredibly valuable.

For anyone else wondering about ERTC in 2021 Q2 specifically, here's what I learned from my research: For Q2 2021, the credit is 70% of qualified wages up to $10,000 per employee for the quarter (max $7,000 credit per employee). All employers were eligible to claim qualified wages up to $10,000 per employee per quarter in Q1-Q3 2021, regardless of size. But remember, you need to qualify either through: 1) Government shutdown orders affecting your operations 2) Gross receipts decline (less than 80% of same quarter in 2019) The Recovery Startup provision doesn't apply until Q3. If you started after Feb 15, 2021, you might want to look at the "alternative quarter election" for the gross receipts test.

Anyone else getting nervous about claiming these credits at all? I've been hearing about increased IRS scrutiny on ERTC claims and potential "promoter investigations" targeting firms that help businesses claim them.

I went through a very similar situation with my consulting business that started in March 2021. Like others have mentioned, the Recovery Startup Business provision only applies to Q3 and Q4 2021, so you can't use that for Q2 qualification. However, I was able to successfully claim Q2 2021 ERTC under the partial suspension rules. Many states had capacity restrictions, mask mandates, or other operational limitations that qualified as "partial suspension" even if businesses weren't completely shut down. The key is documenting exactly which government orders affected your specific business operations during Q2 2021. I had to gather state executive orders, local health department guidelines, and industry-specific restrictions that were in place during that time period. Even things like reduced capacity limits or mandatory operational changes can qualify. Since you had 8 employees in Q2, you could potentially claim up to $7,000 per employee ($56,000 total) if you qualify. That's significant money worth investigating properly. I'd recommend either using one of the analysis tools mentioned here or speaking directly with the IRS to confirm your eligibility before filing, since the documentation requirements are quite specific.