The construction industry has weathered its share of storms in recent years—supply chain disruptions,
labor shortages, and project delays triggered by the COVID-19 pandemic. For construction firms, the
Employee Retention Credit (ERC) has offered a critical lifeline, providing a refundable tax credit to
reward businesses that kept workers on payroll during turbulent times. But the window to claim this
credit is closing fast. With the deadline for 2021 tax periods set for April 15, 2025, construction
companies must act now to build their savings before time runs out.
Understanding the Employee Retention Credit
Introduced under the CARES Act in 2020, the ERC incentivizes employers to retain employees amid
economic hardship. It offers up to $5,000 per employee for 2020 and up to $7,000 per employee per
quarter for the first three quarters of 2021—potentially totaling $26,000 per employee across the
program’s duration. For construction firms, which often employ sizable crews of laborers, foremen, and
administrative staff, this credit could mean a significant financial boost.
To qualify, firms must demonstrate either a significant decline in gross receipts (a 50% drop in 2020 or
20% in 2021 compared to the same quarter in 2019) or a full or partial suspension of operations due to
government orders, such as construction site shutdowns or restrictions on non-essential projects. Many
construction companies faced such interruptions, especially in early 2020 and 2021, making them strong
candidates for the ERC.
Why the Time is Right for Construction Firms
The construction sector was uniquely impacted by the pandemic. Projects were halted, materials
became scarce, and crews were sidelined. These disruptions often triggered eligibility for the ERC, even
if revenue losses weren’t dramatic. For instance, a firm that couldn’t operate at full capacity due to
social distancing mandates or supply delays might still qualify under the suspension clause.
The urgency to file is heightened by recent IRS developments. After a moratorium on new ERC claims in
2023—prompted by a wave of fraudulent applications—the agency has resumed processing under the
leadership of new Commissioner Billy Long, who’s adopted an ERC-friendly approach. This shift signals a
smoother path for legitimate claims, but the deadline remains immovable: April 15, 2025, for 2021
quarters (the 2020 deadline of April 15, 2024, has already passed).
Don’t Let Savings Slip Through the Cracks
Delaying action could cost construction firms thousands—or even millions. A mid-sized company with 30
employees, fully eligible for 2021, could claim up to $630,000. That’s capital to offset rising lumber
prices, invest in equipment, or hire additional workers in a tight labor market. However, ERC filings
require meticulous documentation—payroll records, proof of government orders, and revenue
comparisons. Waiting until the last minute risks errors, rejected claims, or missed deadlines, as the IRS
won’t accept late submissions.
Steps to Secure Your ERC
Start by reviewing your 2021 operations. Were projects delayed or canceled due to pandemic-related
mandates? Did your revenue drop compared to 2019? If either applies, you’re likely eligible. Gather
payroll data, including Form 941 filings, to pinpoint qualified wages. Then, partner with a CPA or ERC
specialist familiar with construction industry nuances to file an amended return. These experts can
ensure accuracy and maximize your credit.
A Foundation for Growth
The ERC isn’t just a refund—it’s a chance to strengthen your firm’s foundation. Funds can help weather
ongoing economic uncertainty, fund new bids, or improve worker retention in an industry plagued by
turnover. Imagine a small contractor with 10 employees claiming $210,000 for 2021. That’s
transformative money for a business operating on tight margins.
Act Before the Blueprint Fades
With less than two months until April 2025, the ERC deadline looms large. Construction firms that act
swiftly can turn pandemic hardships into financial gains. Don’t let this opportunity crumble. Consult a
tax professional today, confirm your eligibility, and file before April 15, 2025, to build your savings while
there’s still time.
