How Businesses in the Construction Space Can Take Advantage of the ERC Credit

The Employee Retention Credit (ERC) is a tax credit created by the CARES Act to help businesses keep employees on their payroll during the COVID-19 pandemic. While the ERC is available to businesses in all industries, those in the construction space can take advantage of this credit to offset some of the costs associated with maintaining their workforce during the pandemic.

Understanding the ERC

The ERC is a refundable tax credit available to eligible employers for wages paid to employees. Eligible employers can receive a credit of up to 70% of qualified wages paid to each employee, up to a maximum credit of $28,000 per employee, for the period from March 13, 2020, through December 31, 2021.

To be eligible for the ERC, a business must meet one of the following two criteria:

1. Significant Decline in Gross Receipts: A business that has experienced a significant decline in gross receipts is eligible for the ERC. The significant decline is defined as a decline of 50% or more in gross receipts for a calendar quarter in 2020 compared to the same quarter in 2019. For 2021, the decline is 20% or more.

2. Partial or Full Suspension of Operations: A business that was fully or partially suspended due to government orders related to COVID-19 is eligible for the ERC.

How Can Businesses in the Construction Space Take Advantage of the ERC?

Businesses in the construction space can take advantage of the ERC credit by meeting the eligibility criteria and following the guidelines set forth by the IRS. Here are a few ways businesses in the construction space can maximize the benefits of the ERC:

1. Review Eligibility Criteria: Businesses in the construction space should review the eligibility criteria for the ERC to determine if they meet the requirements.

2. Maximize Qualified Wages: To maximize the benefits of the ERC, businesses in the construction space should focus on maximizing qualified wages.

3. Keep Accurate Records: To claim the ERC credit, businesses in the construction space must keep accurate records of all qualified wages paid to employees.

4. Work with a Tax Professional: Businesses in the construction space should work with a tax professional to ensure they are maximizing the benefits of the ERC credit.

Benefits of the ERC for Businesses in the Construction Space

Businesses in the construction space can benefit from the ERC credit in several ways. Here are a few benefits of the ERC for businesses in the construction space:

1. Helps Offset Labor Costs: The ERC credit can help offset labor costs associated with maintaining a workforce during the COVID-19 pandemic.

2. Provides Financial Relief: The ERC credit can provide financial relief to businesses in the construction space that have experienced a significant decline in revenue due to the COVID-19 pandemic.

Conclusion

We hope this has been helpful. Now, are you looking to optimize your business and save even more time and money? Boom & Bucket offers a wide selection of inspected what-you-read-is-what-you-get heavy equipment to help you get the job done efficiently. Contact us today to learn more about our equipment and how we can help you take advantage of the ERC credit to offset your labor costs. Let us help you succeed!