The COVID-19 pandemic hammered the construction industry, grinding projects to a halt almost overnight. Many small, medium, and large-scale construction projects lay dormant for months on end as the pandemic tore across the nation. Actions by the government officials also slowed construction projects, either by requiring masking, social distancing, or shuttering any non-essential business. It’s not an exaggeration to say that the pandemic and government response took a wrecking ball to the construction industry, which is still trying to pick up the pieces.
Fortunately, Congress understood the difficulties created by the pandemic and created the Employee Retention Credit (ERC) program. This credit confers significant benefits to those companies that kept employees on the payroll during the pandemic. If you continued to pay employees during 2020 or 2021, you should definitely contact Sunrise Business Solutions | ERC Guaranteed today to see if you qualify.
What is the Employee Retention Credit?
Congress created this credit in the Coronavirus Aid, Relief and Economic Security (CARES) Act which passed in March 2020. The credit was designed to work as an incentive for businesses like construction companies to keep employees on their payrolls. Because the pandemic went on much longer than many people imagined, the government extended the ERC through most of 2021.
Because this is a payroll credit—and not an income tax refund—many CPAs do not know about it. Unfortunately, many contractors and construction companies were likewise unaware that they qualified for the credit. You might be leaving up to $26,000 per employee on the table by not seeking ERC credit today!
Do Construction Companies Qualify?
Yes! In fact, the construction industry was one of the hardest hit during the entirety of the pandemic. Many projects came to a sudden halt and workers couldn’t lift a hammer for months or even years due to various supply chain bottlenecks and government orders.
Qualifying for ERC is simple. All you need to do is show you had a complete or partial shutdown of your construction business because of government COVID-19 mandates. It’s really that easy. If your industry was affected in any way by government mandates in response to the pandemic, you can qualify for ERC.
Another, separate way to qualify is if your business saw a reduction in quarterly revenues—at least 50% in 2020 (compared to 2019) or 20% in 2021.
However, reduction in revenue is a completely separate way to qualify. You can still qualify for ERC if you suffered at least a partial shutdown of your construction business.
What is a Partial Shutdown of My Construction Business?
The construction industry suffered considerable slowdowns during the COVID pandemic. There are countless ways that construction businesses could qualify for ERC.
Did you suffer any of the following?
- Shut down orders
- Quarantine protocols
- Job cancellations
- Capacity limitations on jobsites
- Physical distancing requirements
- Temperature checks
- Time off for employees to get vaccinated
- Pre-access jobsite questionnaires
- Enhanced sanitation procedures
- Installation of ventilation systems
- Burdensome PPE requirements
- Adjusted safety/work procedures
- Increased trainings
- Transition to remote work for some employees
Staffing shortages also hit the construction industry. In fact, many businesses reported being unable to get enough construction workers. According to Hub International, the construction industry lost 1 million workers in the early days of the pandemic and were short by almost a quarter of a million in early 2022. OSHA requirements that construction companies identify and isolate workers with suspected COVID has certainly prevented them from fully staffing jobsites as needed.
Even if one key subcontractor couldn’t find enough bodies to work, an entire project could temporarily grind to a halt.
Can I Receive ERC if My Revenue Increased in 2020 or 2021?
Yes! So long as your business suffered at least a partial suspension of business operations, you can qualify even if your revenue increased. At Sunrise Business Solutions | ERC Guaranteed, we get to work qualifying our clients for ERC based on a full or partial shutdown of business and rarely need to consider whether our clients suffered reduced revenue.
I Received PPP—Can I Also Get ERC?
Yes! In fact, SUNRISE can get ERC credits for your business which are worth 3-7 times what you got for PPP1!
Does Sunrise Help Construction Companies in My State?
We work with construction companies nationwide to get them the Employee Retention Credit they are entitled to. Just call us today to get started!
How Much Can I Get in ERC?
It depends on the number of employees and the years you are claiming:
2020 credits: most businesses could claim up to 50% of the first $10,000 paid to an employee in wages and health benefits. This worked out to a max of $5,000 per employee for the year.
2021 credits: most businesses could claim up to 70% of the first $10,000 of qualifying employee wages for each of the first three quarters in the year. That’s a max of $21,000 per employee for all of 2021!
Larger construction companies might receive less in ERC refundable credits. But SUNRISE BUSINESS SOLUTIONS can often get our clients more than they ever got through PPP, so it’s worth calling us today to find out!
My Projects Have Picked Back Up and I Don’t Have A Lot of Time…
Let us handle everything for you! All you have to do is reach out today and call us. We’ll get to work checking if you qualify. 99% of all businesses do!
When Will I Pay My ERC back?
Never! That’s the great thing about ERC—it’s a tax credit, not a loan. You get this money as a reward for keeping employees on the payroll. Look at it this way—you paid this money already to the government. Now they are giving it back as a “thank you.”
Can I Receive ERC Due to Supply Chain Disruptions?
Yes! This is a little-known way to qualify for ERC—and most construction companies were impacted in some capacity. The entire construction industry relies on materials and equipment sourced in different states or even different countries. As the pandemic burned across the globe, states and countries responded by shuttering manufacturers and other key suppliers or vendors.
Construction companies here in the U.S. suffered the consequences. In fact, construction industry insiders say they have never seen any impact like the COVID-pandemic supply chain issues.
Did you struggle to source essential materials for your jobsite?
- Electrical equipment?
- Lighting supplies?
According to the National Association of Homebuilders (NAHB), 9 in 10 homebuilders suffered from shortages of lumber and other materials. This was unsurprising. COVID was an international pandemic which shut down ports and manufacturers around the globe. Lumber in particular saw its cost double from 2019 to 2021. Backlogs involving steel, electrical supplies, insulation and lighting equipment forced construction sites to slow down or suspend operations. Without necessary materials, there was nothing to build!
And when materials became available, their prices spiked—often to ridiculously high levels. Many construction companies had to increase their lead time. Projects often became unprofitable as inflation tore throughout the entire industry.
Other shortages impacted equipment used in construction which could not be repaired or replaced in a timely manner due to shortages and backlogs. Even jobsites with enough eager workers were forced to keep the lights off as they struggled to find necessary equipment to help with the job.
If you suffered any type of supply chain disruption, then it is very likely you qualify for ERC! Make sure to contact SUNRISE today to check!
What if I Couldn’t Hire Subcontractors Due to COVID?
This was definitely a distribution many construction companies suffered. Even if you weren’t impacted directly by COVID, chances are you struggled to find skilled subcontractors or vendors to perform necessary work on your construction site. In fact, supply chain disruptions affecting just one part of the construction industry had a ripple effect, leading to gridlock across the states.
Can I Plow My ERC Back into My Business?
It’s yours to do with what you want! Many construction companies are using the funds to make key investments. Talk with your CPA to discuss tax advantages. But there are no limitations on what you use the funds for.
When Will I Get My Check from the IRS?
We can process everything in less than 5 business days. Then we submit your amended returns to the IRS. All you need to do is wait for the IRS to work its way through their backlog to finally send you a check for your ERC refundable credits.
CONTACT SUNRISE TODAY TO GET STARTED
At Sunrise Business Services, we’re pleased to spread the news about the Employee Retention Credit. Construction companies that kept employees on the payroll performed a public service—and the IRS is prepared to reward you. Call us today.
We are your ERC specialists dedicated to maximizing ERC credits for the construction companies across the country. That’s all we do. And we do it better than any of our competitors. For more information, please contact us today by calling 312-883-1888 to learn more or get started.