Contractors and the Employee Retention Credit
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.
Anthony Campolo, CPA, Partner, Construction
Dana Fried, JD, LLM, Managing Director, National Tax Services
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