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Contractors and the Employee Retention Credit

Anthony Campolo, Dana Fried

Good news for contractors (and all employers): A recent law permits Paycheck Protection Program (PPP) loan recipients to obtain Employee Retention Credits (ERCs), which have been extended and expanded for 2021.

Most building contractors in New York City experienced a partial suspension of operations due to a governmental order because of COVID-19. The related relief programs and tax credits all have varying impacts relating to a contractor and taxes. This one is no different. 

The Consolidated Appropriations Act of 2021 provides for both retroactive applicability of the ERC for 2020 and extending and expanding the ERC for the first two quarters of 2021. Consequently, a contractor that did not take an ERC for 2020 because it or its controlled member received a PPP loan may now be eligible for ERCs for 2020. In addition, the Act has significantly liberalized the ERC requirements for 2021.

Register to access our full ERC explanation, which includes “decision trees” for both 2020 and 2021 that help guide you through your eligibility and how much credit you may be eligible for.

Contact:

Anthony Campolo, CPA, Partner, Construction

914.922.2126

Dana Fried, JD, LLM, Managing Director, National Tax Services

516.417.5064

Any advice contained in this communication, including attachments and enclosures, is not intended as a thorough, in-depth analysis of specific issues. Nor is it sufficient to avoid tax-related penalties. This has been prepared for information purposes and general guidance only and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is made as to the accuracy or completeness of the information contained in this publication, and CohnReznick LLP, its members, employees and agents accept no liability, and disclaim all responsibility, for the consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.