Many owners of construction companies wonder what makes a construction business eligible for ERC. Generally, if you have W-2 employees, then your business must meet at least one of the following two conditions:

• Your business(es) experienced decreased revenue during quarters 1-4 in 2020 and 1-3 in 2021, compared to 2019
• Your business(es) suffered from any number of government-mandated restrictions

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Government mandates during the COVID-19 pandemic may include things like an inability to access equipment and job site restrictions, capacity limitations/reduction in crew size, limitations upon the permit/inspection process (and corresponding backlogs), among other things. 

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On top of this, many business owners wonder if they are eligible if they have already received the Paycheck Protection Program (PPP) loan. Regardless of if you received PPP 1 and/or 2, you may still be eligible to receive ERC. Consult with a trusted Certified Public Accountant (CPA) to get a better understanding of your construction company’s eligibility for ERC.

It is possible that you may have found your construction company has grown during the pandemic, even among all of the tough circumstances. If this is the case, you may still be eligible for the Employee Retention Credit, assuming you faced government-mandated restrictions that affected your work, such as any listed above. 

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Even if your company was listed as an essential business, you may have faced restrictions that limited your workability. Speaking with an experienced CPA at Strategic Tax Planning can help to give you a better idea of your company's eligibility. 

Business owners who have claimed the Employee Retention Credit may be wondering when they can expect to receive the tax credit. With so many businesses being affected by the pandemic, the IRS has a high volume of applications to process. Every case is unique and will have a different timeline. Your refund could be processed in about 8 months, although it may take longer. 

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If you wish to check the status of your refund, you may call the IRS, or use the “Where’s My Refund?” feature on the IRS website.

For owners of construction companies, ERC can be a great financial relief, but it is important to make sure you and your tax planners are diligent and thorough when examining your eligibility. It is critical to note that the IRS will carefully examine your claim for this credit. Claims that are submitted with falsified information can lead to compliance risks such as ERC audits in the future, setting up a potential disaster.

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Strategic Tax Planning’s experienced tax professionals and CPAs will work closely with you and your construction business, ensuring all of your ERC qualifications and facts are accurate and in order. We are here to help you receive your deserved relief for persevering during difficult financial times.