ERC full vs partial suspension test criteria - what qualifies for Employee Retention Credit?

The full vs partial suspension test for the Employee Retention Credit is definitely confusing! I've helped several clients navigate this. For restaurants like yours, here's what matters: you need to show that a government order caused either a full or partial suspension of your business operations. Based on what you described, you were clearly under a partial suspension when your dining room was closed or had capacity restrictions. The "more than nominal" part means the limitation needs to have a meaningful impact on your business. The IRS guidance says if the suspended portion of your business is 10% or more of your total operations (measured by 2019 gross receipts or hours worked), then it's considered "more than nominal." Since indoor dining was 70% of your business, you easily meet this threshold. The key is documenting the specific government orders that restricted your operations and being able to show how they impacted your normal business model. You'll need to identify exactly which quarters you were under these restrictions. For each qualifying quarter, you can claim the credit even if your revenue didn't drop significantly.

After reading through this thread, I wanted to share my experience with the Employee Retention Credit. I was in a similar situation with my retail business that had capacity restrictions and was struggling to figure out all the documentation and requirements. I ended up using this AI tool called taxr.ai (https://taxr.ai) that really simplified the process. It analyzed all my documentation and helped determine exactly which quarters I qualified under the partial suspension test. The tool asked me specific questions about the government orders affecting my business and how they impacted normal operations. What I found most helpful was that it actually created all the documentation I needed to substantiate my claim, which made me feel much more confident about avoiding potential audit issues down the road. It also calculated the exact credit amount I was eligible for based on qualified wages.

I wanted to follow up about my experience with taxr.ai after seeing it recommended here. I was skeptical at first (as you can see from my earlier comment), but I decided to give it a try for my manufacturing business. The tool actually exceeded my expectations. It walked me through a series of specific questions about how government orders affected our operations. In my case, we had social distancing requirements that forced us to operate at 50% capacity in our production area for several months. What impressed me was how thorough it was in helping me document everything. It created a complete analysis showing that the suspended portion of our business represented about 35% of our operations, easily meeting the "more than nominal" test. The documentation package it generated included everything I needed to substantiate our claim. My tax professional was impressed with how comprehensive the analysis was, and it saved me thousands in consulting fees I would have paid to have this all figured out manually.

If you're struggling with the IRS about your Employee Retention Credit claim or have questions that need direct answers, I recommend trying Claimyr (https://claimyr.com). I wasted weeks trying to get through to someone at the IRS when I had questions about how to apply the partial suspension test to my specific situation. Claimyr got me connected to an actual IRS agent in about 15 minutes when I had been trying for days on my own. You can see how it works here: https://youtu.be/_kiP6q8DX5c The agent I spoke with was able to clarify exactly how the "more than nominal" test applied to my business (we're a service company that had restrictions on in-person meetings). She confirmed that we qualified since more than 10% of our 2019 revenue came from services that were suspended by government orders.

I need to eat my words. After posting my skeptical comment, I decided to try Claimyr myself since I was desperate to talk to someone about my delayed ERC refund. Honestly, I'm shocked. The service actually worked. I got a call back in about 25 minutes saying they had an IRS agent on the line. I was connected immediately and spoke with someone who could see my file and confirm that my ERC claim (filed 9 months ago) was in processing. The agent even gave me specific information about what was causing the delay and an estimated timeframe for when I should receive my refund. This was after I had spent probably 20+ hours trying to get through on my own over several weeks. If you're dealing with ERC questions or delays, being able to actually speak with someone at the IRS makes a huge difference. Wish I had known about this months ago.

Just wanted to add some additional clarity on the "more than nominal" test for ERC qualification, since I see some confusion here: The IRS has two ways to meet this test: 1. The suspended part of your business operations represented at least 10% of your total gross receipts in 2019 2. The suspended part of your business represented at least 10% of the total hours of service performed by all your employees in 2019 For restaurants with closed dining rooms, this is usually very easy to prove. Even businesses with less obvious impacts like manufacturers with reduced capacity or service businesses with limits on in-person meetings can often qualify. Just make sure you keep solid documentation of the specific government orders that caused your suspension and be ready to show how they impacted your normal operations in a significant way.

Has anyone actually received their ERC refund yet? I qualified under the partial suspension test and filed amended 941s almost a year ago. Still nothing!

I've been following this thread with interest since I'm dealing with a similar situation. My consulting firm had to transition from in-person client meetings to virtual only for about 8 months in 2020-2021 due to government restrictions. What's been helpful from reading everyone's experiences is understanding that the "more than nominal" test isn't just about revenue drops - it's about operational changes. In our case, we had to completely restructure how we delivered services, which definitely impacted more than 10% of our normal operations. One thing I'd add for anyone still figuring this out: keep detailed records of exactly when government orders went into effect and ended in your area. I created a timeline showing the specific dates restrictions changed, which quarters they affected, and how our operations were modified during each period. This documentation has been crucial for substantiating our claim. Thanks to everyone who shared their experiences with the various tools and services - it's reassuring to know there are resources available to help navigate this complex process.

Reading through this thread has been incredibly helpful! I'm dealing with a similar situation with my fitness studio. We were forced to close completely for 3 months in 2020, then allowed to reopen but with severe capacity restrictions (from 40 people per class down to 8) and no group fitness classes allowed - which was about 60% of our revenue. I've been hesitant to claim the ERC because I wasn't sure if the capacity restrictions counted as a "partial suspension" once we reopened. But based on what everyone's shared here, it sounds like we clearly meet the "more than nominal" threshold since group classes were such a significant part of our operations. The documentation advice about keeping records of specific government orders is spot on. I still have all the health department notices that detailed exactly when restrictions changed and what we were/weren't allowed to do. One question for those who've been through this process: when calculating qualified wages, do you include wages paid to employees who were working reduced hours due to the capacity restrictions, or only wages paid during periods of complete closure? The IRS guidance on this specific scenario has been confusing. Thanks to everyone who's shared their experiences - it's made me much more confident about moving forward with our claim!