covid19

EXPANDED IN 2021: UNDERSTANDING THE EMPLOYEE RETENTION CREDIT AND THE PPP

By Anthony Campolo, CPA, Partner, CohnReznick’s Construction Practice

Good news for contractors. As you may know, a new law permits PPP loan recipients to obtain Employee Retention Credits for 2021 as well as 2020. For contractors across the country, most experienced what New York City-based contractors experienced: partial suspension of operations due to governmental orders because of COVID-19. The related relief programs and tax credits like this one all have varying impacts relating to a contractor and taxes.

Under the Consolidated Appropriations Act of 2021, the ERC for 2020 was extended and expanded 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.

The article and explanations cover:

  • Eligibility requirements for contractors
  • Amount of ERCs a contractor can receive
  • What counts as “qualified wages”
  • How the ERC and PPP interact
  • Helpful “decision trees” that guide you through 2020 and 2021

Download the full explanation here including the “decision trees.”