Shutdown orders and various government mandates meant plunging profits during the Covid-19 pandemic. Usually, this would mean layoffs. But thanks to the Employee Retention Tax Credits (ERTC), Congress created a tax program that incentivized businesses to keep people on the payroll.
Our client, a commercial installation business, experienced a range of disruptions to their business. A combination of government-ordered shutdowns and supply chain issues significantly reduced gross receipts.
Fortunately, the company was able to take advantage of the ERTCs with help from C&A. Here’s how they saved thousands of dollars for tax years 2020 and 2021.
ERTCs and the Paycheck Protection Program (PPP)
Many businesses took out Paycheck Protection Program loans to keep their doors open. This particular construction business client took two draws of the Paycheck Protection Program.
Many of our clients are concerned that if they apply for ERTCs, they won’t be able to get a PPP loan forgiven. On the other hand, they’re also worried that taking out a PPP loan jeopardizes their ability to apply for and obtain the Employee Retention Tax Credits.
The good news is that neither concern is rooted in reality. Businesses can apply for PPP loans and employee retention tax credit. Taking out a PPP loan doesn’t forfeit a company’s ability to obtain ERTC. Additionally, ERTCs have no bearing on whether or not a company can get its PPP loan forgiven.
Construction business client: Eligibility for Employee Retention Credit
When our construction business client approached us, they’d experienced government shutdowns in Q2 2020.
In Q3 2020, they’d seen a decline in gross receipts. The same also occurred during Q1 and Q2 of 2021, but the business kept workers on its payroll. This made them eligible for ERTC, regardless of their PPP loan status. Of which both have been forgiven.
So, the next step to help the company protect its bottom line and save was to obtain the maximum amount of ERTCs for them.
For 2020, the company kept 13 employees on the payroll. As a result, we obtained $42,437 in ERTCs for this timeframe.
For Q1 2021, the company retained 11 employees on its payroll, and we obtained $45,184 in ERTCs.
Finally, for Q2 2021, the company had 12 employees on its payroll and was eligible for $52,974 in ERTCs.
With a help of Cunningham & Associates, the company received a total of $140,606 in Employee Retention Tax Credit savings.
Contact C&A to get the max ERTC for your business.
No matter your PPP loan status, C&A’s tax professionals can help you obtain employee retention credits. In addition, we can preserve your eligibility for forgiveness if you’re awaiting PPP loan forgiveness when applying for ERTCs for your company — regardless of industry or size.
Contact us online or at (508) 797-5003 for your FREE consultation.