The Employee Retention Credit Can Be A Boon For The Construction Industry

The Employee Retention Credit Can Be A Boon For The Construction Industry

https://f004.backblazeb2.com/file/fkegfh/employeeretentiontaxcredit/Employee-Retention-Credit-Qualifications/Should-Construction-Companies-File-For-The-Employee-Retention-Credit.html

Employers in construction are typically eligible, because government orders restricted their operations. Misinformed business owners lacking a full understanding employee retention credit how to apply of the credit and its qualifications. After reducing deposits small contractors can request advance payment through Form 7200 Advance of Employer credit due to Covid-19

Misconception #2 - My construction company is ineligible to ERC because it didn't experience a 50% decrease in gross receipts. Contractors have the option to access the Employee Retention Credit for their first and second quarters in 2021, prior to filing their employment taxes returns. This allows them to reduce their employment tax deposits. You have fewer than 500 employees. If your company has 500 or less employees, any compensation received during the period that one of these two scenarios was affecting operations is eligible for the credit. This applies regardless of whether or not the employees were at work. Some analysis must be done to properly determine the number of employees a company employs for purposes of the 500 employee threshold.

Should Construction Companies Apply For The Employee Retention Credit

The ERC could be worth a maximum of $7,000 per employee per calendar quarter in 2021. Regarding timing, Qualified Work is compensation provided to an individual after March 12, 2020 and prior to July 1, 2021. This may also include the Eligible Employment's qualified healthcare plan expenses that can be added to the wages. A company may not double benefit from claimed credits based on the same wages for purposes of the ERC, the PPP forgiveness determination and other wage-based tax credits.

The time is ripe for contractors to determine their credit eligibility by consulting an expert. A lot of confusion still exists surrounding who is eligible to claim the employee retention credit and who isn't. The IRS released updated guidance on ERC earlier in the week to clarify retroactive modifications made to the credit tax credit for construction companies in 2020 and to explain how employers who have received a Paycheck Protection Program loan can claim it. It is disheartening to see so many qualified companies miss such a valuable resource due to rising inflation and uncertain markets ahead.

What Is The Employee Retention Credit?

If your company employed W-2 workers between 2020 and 2021 then you may be eligible. This applies if your operations were affected because third-party vendors suffered supply shortages as a result of government-ordered shutdowns. Eligible employers claim the ERC by reducing quarter's required payroll tax deposit on their Form 941. Initially, the ERC is applied to 6.2% of the employer's share in social security taxes on wages paid to all employees during the quarter. If an ERC is greater than that amount, it may be offset against the remaining payroll tax liabilities on Form 941. This figure is greater than the 2020 tax credit which was 50% of qualified wage per employee for all periods (in other words: up to $5,000 per worker).

What Happens If You Are Awarded The Second Round?

Third-party suppliers experienced shortages in materials that are essential to the construction industry, like lumber and steel. For those in the sector, orders for basic building materials have been backlogged for months at a time. In addition to backordering supplies, prices have spiked significantly as well creating rapid inflation. This has caused increased lead time for projects, making those in construction industry worry about their future.

Many contractors have received, or are currently in the process of obtaining, employee retention credits in recent years. OnCentive is the nation's top profitability consulting firm. Today, OnCentive announced that clients can now receive funding for their COVID-19 Employee Credit Credit. This allows businesses to get a much-needed cash injection without waiting for the Internal Revenue Service. OnCentive has a new partner who is a secured funding partner. OnCentive will be able to calculate, file, and pay clients' COVID-19 Employee Rewards Credits in a matter of weeks. This means OnCentive can skip the usual eight-to-9 month turnaround IRS times. During the last two years, as a result of COVID-19, supply chains were impacted in an extreme way never seen before, and many of these disruptions continue to this day.