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What Do Construction Companies Get Wrong About ERC Eligibility

Architect with partner working with laptop on construction plan in office

As part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) of March of 2020, the federal government created the Employee Retention Credit (ERC). The ERC is a refundable tax credit for businesses that kept employees on in 2020 and 2021 despite feeling some adverse economic effects from the COVID-19 pandemic. 

Many construction companies are prime candidates to qualify for ERC benefits—but a significant number have still not filed. At Sunrise Business Solutions | ERC Guaranteed, we help construction companies get the ERC. In this article, our ERC specialists highlight five of the most common things that construction companies get wrong about the Employee Retention Credit (ERC). 

  1. The ERC is Not Available to the Construction Industry (False)

False. The ERC is not limited to a small class of so-called “essential” businesses. It is available to businesses and organizations in every industry. The construction industry is no exception. Construction companies can and should file for the Employee Retention Credit. 

  1. Your Business has to Be Completely Shutdown to Qualify for the ERC (False

False. Most construction companies stayed open—at least in part—during the entirety of the COVID-19 pandemic. That being said, you can still file for ERC benefits without a complete shutdown. A partial government shutdown—which includes things like cleaning & sanitizing rules and social distancing requirements—is sufficient to qualify for ERC benefits. 

  1. You Cannot File for the ERC Unless Your Revenue Dropped (False

False. Construction companies can file for the ERC on the basis of a significant drop in revenue—50 percent in 2020 and 20 percent in 2021. However, a drop in revenue is not required. It is merely one way to qualify. It is generally easier for construction companies to qualify on the basis of a government order, such as a social distancing order, partial suspension, and supply chain or vendor disruptions.

  1. A Construction Company Cannot Claim the ERC If It Got PPP Funds (False)

False. Although they were both created by the CARES Act, the Paycheck Protection Program (PPP) and the Employee Retention Credit (ERC) are two separate federal programs. A construction industry business can still file for and qualify for ERC funds even if it got a PPP loan. 

  1. It is Too Late to File for the Employee Retention Credit (False)

False. Regulations from the IRS allow construction companies and other businesses to file an amended return for a period of three years. In effect, this means that you can still file for the ERC for 2020 and/or 2021 in 2022. The team at Sunrise Business Solutions | ERC Guaranteed can help construction companies qualify. 

Sunrise Business Solutions | ERC Guaranteed Helps Construction Companies Qualify for the ERC

At Sunrise Business Solutions | ERC Guaranteed, we specialize exclusively in the Employee Retention Credit (ERC). Our team helps clients get the maximum ERC tax credit for all six quarters. If you have any questions or concerns about applying for the ERC as a construction company, we are more than ready to help. Call us at 1-888-210-8870 or contact us online for a free, comprehensive ERC analysis. Sunrise Business Solutions | ERC Guaranteed helps construction companies qualify for the ERC nationwide.