Please note: As of 12:00 am PDT on April 9, 2024, we are no longer accepting applications for tax year 2020. Any completed applications (with supporting documentation) submitted on or after 12:00 am PDT on April 9, 2024, will be prepared and filed for tax year 2021 only. By continuing to utilize our service, you acknowledge and agree that SmartERC will not prepare nor file your Forms 941X for any quarter of tax year 2020.

ERC for Service (HVAC) & Construction Companies

Restaurants

Employee Retention Credit for Service (HVAC) & Construction Companies

We understand that as a construction company, you may have questions about your eligibility for the Employee Retention Credit (ERC). Many companies in the industry are unaware of the opportunities that this credit gives them, and they miss out on serious potential savings.

We want to provide you with a comprehensive guide to the ERC, and explain what construction companies often get wrong about their eligibility. We’ll cover the basics of the credit, highlight some of the common misconceptions, and provide practical advice on how to maximize your eligibility and claim the ERC credit.

What is the Employee Retention Credit (ERC)?

The Employee Retention Credit is a tax credit that was introduced as part of the CARES Act in March 2020, to provide financial relief to businesses affected by the COVID-19 pandemic. The credit is designed to encourage employers to keep their employees on payroll, even if they are not able to work due to the pandemic.

The ERC is a refundable tax credit of up to $7,000 per employee per quarter in 2021, and can be claimed against employment taxes paid by the employer. This credit is available to all eligible employers who have experienced a significant decline in gross receipts, or who have been forced to suspend operations due to government orders.

Common Misconceptions About ERC Eligibility for Construction Companies

Construction companies may assume that they are not eligible for the ERC because they have not experienced a significant decline in gross receipts, or because they are considered essential businesses and have not been forced to suspend operations. However, these assumptions are not always accurate.

Misconception #1: Construction companies are not eligible because they have not experienced a significant decline in gross receipts.

While it is true that many construction companies have been fortunate enough to avoid a significant decline in gross receipts, there are circumstances where they may still be eligible for the ERC. For example, if a construction project was delayed or canceled due to the pandemic, this could result in a decline in gross receipts and make the company eligible for the credit.

Misconception #2: Construction companies are not eligible because they are considered essential businesses and have not been forced to suspend operations.

Being an essential business does not automatically disqualify a company from the ERC. If a construction company has experienced a significant decline in gross receipts due to the pandemic, or has had to partially suspend their operations due to government orders, they may still be eligible for the credit.

How Construction Companies Can Maximize Their ERC Eligibility

To maximize your eligibility for the ERC, it is important to understand the rules and regulations surrounding the credit. Here are some practical tips for construction companies looking to claim the ERC:

Tip #1: Keep detailed records of your gross receipts and employee wages.

To claim the ERC, you will need to provide evidence of a significant decline in gross receipts, or that your business was partially or fully suspended due to government orders. Keep detailed records of your gross receipts and employee wages, and be prepared to provide documentation to support your claim.

Tip #2: Understand the rules surrounding qualified wages.

Not all wages are eligible for the ERC. Make sure you understand the rules surrounding qualified wages, and ensure that you are only claiming the credit for eligible wages.

Tip #3: Consider the impact of PPP loans on your ERC eligibility.

If you have received a PPP loan, this may impact your eligibility for the ERC. Make sure you understand the rules surrounding PPP loans and the ERC, and seek professional advice if necessary.

Tip #4: Consider Getting Assistance with a tax attorney who Specializes in ERC.

We’re the only ERC company who gives you access to the expertise of Former IRS Agents. They have processed 100s of ERC filings while working within the IRS and they know the process better than anyone. 

The Employee Retention Credit can provide substantial financial relief to construction companies affected by the COVID-19 pandemic. While there are some common misconceptions surrounding eligibility, it is important to understand the rules and regulations surrounding the credit, and to keep detailed records of your gross receipts and employee wages.

By following the tips outlined in this article, you’re well on your way adding a substantial cash infusion for your business with the ERC. 

FAQ

The Employee Retention Credit is a tax credit introduced as part of the CARES Act in March 2020 to provide financial relief to businesses affected by the COVID-19 pandemic. It encourages employers to retain their employees on payroll, even if they are unable to work due to the pandemic.

Yes, construction companies can be eligible for the ERC. While some assume they are not eligible due to not experiencing a significant decline in gross receipts or being considered essential businesses, there are scenarios where construction companies can qualify. For instance, if a project was delayed or canceled due to the pandemic, it could result in a decline in gross receipts and make the company eligible for the credit.

The ERC is a refundable tax credit of up to $7,000 per employee per quarter. This credit can be claimed against employment taxes paid by the employer.



To maximize ERC eligibility, construction companies should:

 

Keep detailed records of gross receipts and employee wages to provide evidence of a decline in gross receipts or partial/full suspension of operations.

Understand the rules regarding qualified wages and ensure only eligible wages are claimed.

Consider the impact of PPP loans on ERC eligibility and seek professional advice if necessary.

Work with a tax attorney who specializes in ERC claims for expert assistance and guidance throughout the process.

The eligibility of construction companies with PPP loans for the ERC can be affected. It is important to understand the rules surrounding both PPP loans and the ERC and seek professional advice to navigate any potential impacts.

The ERC provides significant financial relief to construction companies affected by the COVID-19 pandemic. By claiming the credit, companies can receive a substantial cash infusion, helping them manage expenses and maintain their workforce.

Yes, construction companies need to keep detailed records of gross receipts and employee wages to support their ERC claim. These records will be necessary to demonstrate eligibility and comply with IRS regulations.

Construction companies can seek assistance from tax attorneys who specialize in ERC claims. Choosing a service that offers access to former IRS Agents with extensive experience in processing ERC filings can provide valuable expertise and increase the chances of a successful claim.

The ERC can be claimed for multiple quarters as long as the eligibility requirements are met in each respective quarter. The maximum credit amount per employee per quarter is $7,000.

Yes, construction companies can retroactively claim the ERC for eligible past quarters in 2021. It is essential to consult with a tax professional to understand the specific rules and deadlines for retroactive claims.

Remember to consult with a tax professional or tax attorney to ensure accurate compliance with the ERC guidelines and maximize your claim. By following the tips provided and seeking professional guidance, construction companies can benefit from the ERC and secure essential financial relief.

Please note:- The information provided in this FAQ section is for general guidance only. It is recommended to consult with our exclusive Former IRS Tax professionals for specific details and eligibility requirements regarding the Employee Retention Tax Credit (ERTC) Program for your Transportation business. 

Click the ‘Learn More’ button below to Schedule an Appointment with one of our IRS Experts or start a chat in the bottom right of your screen for more assistance. 

Recent Post

Contact Us

Categories

Meet our Former IRS Agents

Let me help you today!

David Neyland

info@smarterc.com

Contact Form

Please fill out the form below and one of our representatives will be in touch with you about a Referral Partener Application soon.