Organization: MSCA

icon Mechanical was recently recognized as the MCAA/CNA Safety Excellence Awards winner for 2020 in Size Category 4, 450,001 – 1 Million Work Hours. icon Mechanical’s successful COVID-19 safety initiative set the company apart.

icon Mechanical went well above and beyond CDC recommendations to contractors to keep their workers safe. The company installed Global Plasma Solutions (GPS) systems in all company buildings. These systems use needlepoint bipolar ionization technology to help purify and sanitize the air.

The company rewarded employees for identifying potential gaps in the company’s COVID-19 precautions and for helping to identify solutions to remedy these gaps. Each worker was provided with foam-lined safety glasses that do not fog up when worn with face coverings for protection from the virus.

The MCAA/CNA Safety Excellence Awards Program began in the 1990s when MCAA partnered with CNA Insurance. It is a fiercely competitive program in which only the best of the best compete for the awards.

Participants are required to describe their safety programs in detail, including how they achieved safety excellence and why they believe they deserve the award. The Safety Awards Selection Taskforce, which is led by CNA, carefully evaluates each submission looking for safety leadership, an advanced safety culture, effective leading indicators of safety performance, and innovative safety initiatives that helped the company achieve an exceptionally high degree of safety excellence. MCAA and CNA congratulate icon Mechanical for earning such a high degree of safety excellence in 2020.

Tuesday, April 13, 2021 | 11:00 a.m. – 12:00 p.m. ET 

Originally enacted in March 2020 as part of the CARES Act, the Employee Retention Tax Credit (ERTC) was modified and extended through 2021. Join experts from Alston & Bird On Tuesday, April 13, 2021, from 11:00 a.m. – 12:00 p.m. ET as they explore the new opportunities for employers to claim ERTCs in 2021 and some of the challenges employers may face in determining eligibility for the credits. They will also discuss recent changes to the paid employee leave provisions of the Families First Coronavirus Response Act (FFCRA) that provide additional opportunities for employer tax credits associated with FFCRA leave. Register now!
 

Alston & Bird experts will:

• Provide an overview of the employee retention tax credit as originally enacted in the CARES Act
• Discuss taxpayer-friendly changes to the ERTC provisions for 2020 and 2021
• Explore some of the challenges employers are facing when determining eligibility for ERTCs
• Discuss recent changes to FFCRA employee leave provisions and the additional tax credit opportunities they create

Meet the Panelists

Scott Harty | Partner | Alston & Bird
Companies rely on Scott to guide them through the tax implications of domestic and cross-border commercial transactions. An experienced negotiator and technician, Scott provides clients the counsel they need to navigate complex transactions.

Seth Buchwald | Associate | Alston & Bird
Drawing from his experience as a certified public accountant, Seth guides his clients through complex business transactions and controversy matters. Since enactment of the CARES Act, Seth has worked extensively with the ERTC provisions.

Brett Coburn | Partner | Alston & Bird
Brett regularly counsels employers of all sizes on compliance with federal and state employment laws. During the pandemic, he has worked extensively with employers regarding their compliance with the paid leave provisions of the FFCRA.

Each week, MCAA will highlight one or more of the educational resources that are free to MCAA members as a benefit of membership. This week, we focus on two SmartMarket reports developed in partnership Dodge Data & Analytics. The reports on BIM and prefabrication will help contractors understand the benefits, challenges and opportunities presented by these technologies.

In his remarks at MCAA’s Virtual Education Conference, MCAA President Armand Kilijian identified fabrication of duct, pipe, and building systems as one example of a technology that, once implemented in a company’s culture, can reap yearly benefits. These reports provide the legwork needed to get started with or expand use of both BIM and prefabrication.

• The Business Value of BIM for Mechanical and HVAC Construction SmartMarket Report
• Prefabrication and Modular Construction 2020 SmartMarket Report

You Might Also Like These Related Resources

• Fabrication Virtual Mini – Modern Piping
• Fabrication Virtual Mini II – North Mechanical

If you have questions about MCAA’s Innovative Technologies Initiative, which developed these resources, please contact Sean McGuire.

Wednesday, April 7, 2021 | 12:00 p.m. – 1:00 p.m. EDT

Prepare for OSHA’s coming regulatory and enforcement agendas by participating in this 60-minute webinar for mechanical construction and service companies. Our presenter is nationally recognized safety and health expert and attorney Adele Abrams. She is a frequent presenter for MCAA with expertise in legal, occupational safety/health issues, employment law, and mine safety. Adele is also co-author of several books related to occupational safety and health, construction, employment law, and mining. Join us Wednesday, April 7, 2021 from 12:00 p.m. to 1:00 p.m. EDT. Register now!

National accounting firm Withum shares some recent developments from the IRS with respect to the ERC and one PPP development.

IRS Issues Notice 2021-20:

On the evening of March 1, the IRS released 102 pages worth of guidance surrounding the 2020 ERC program. While much of the notice was regurgitating the FAQs already on its website, they did provide some notable clarifications:

• Self-employed individuals are not entitled to ERC with respect to their own wages, but can claim the credit for their employees’ wages.
• Entities subject to aggregation are treated as one employer to determine the following: (i) full or partial shutdown rule, (ii) gross receipts test, (iii) 2019 FTE calculation, and (iv) determining maximum credit per employee.
• Rules surrounding full or partial suspension of activities were greatly expanded, installing a definition of ‘nominal’ for businesses who have part of their business shut down while others are able to continue to operate. These rules are fairly facts and circumstances based, so we recommend you reach out to your advisor to discuss on a more detailed level. 
• Interplay of PPP is discussed with 7 examples provided – in general, the notice reaffirms the flexibility of wages to be allocated in advantageous manner between programs. It further clarifies that borrowers who have already submitted their loan forgiveness application can re-allocate wages to the ERC, provided those wages were not needed to obtain forgiveness within the context of the PPP forgiveness application was filed – any excess wages can be re-allocated as necessary.
• IRS confirmed that when claiming the 2020 credit, separate 941-Xs should be filed for each quarter. 

Taxation of the ERC:

We have received many questions around this, so we thought it appropriate to include a point of emphasis. Unfortunately, the ERC carries with it a disallowance of otherwise deductible costs in the amount of the credit. Because the amount of the credit will reduce otherwise deductible expenses, this means that taxable income for recipients will increase. Generally, this taxable income increase would occur in the year to which the credit relates. This is an important note, as companies applying now for the 2020 credit will have to adjust their 2020 taxable income and 2020 tax returns. This treatment seems particularly inequitable, especially because the actual credit amount for borrowers not receiving the amounts is not likely to be received until well after the tax deadline. We are working on a more detailed discussion of this issue, which will be posted in our resource center in short order. 

Federal Reserve Board Extends PPP Facility to June 30, 2021:

We also have one piece of news regarding the PPP to share. The Federal Reserve Board announced yesterday that it will extend the expiration date of the PPP servicing from March 31, 2021 to June 30, 2021. It is unclear whether this will also be followed by Congress and/or the SBA. The deadline of March 31, 2021 was set by the CAA, which would need to be updated in order to allow applications to be approved after March 31, 2021. If extended to June 30, 2021, this would provide businesses, including those with more than 20 employees who have not been able to apply for the PPP over the last two weeks, some comfort that they will not be up against a March 31 deadline to be approved. In theory, an extension also would provide the ability of a borrower who received PPP1 funding during 2021 to use the funds within the rules of the program and then apply for PPP2 funding prior to the cutoff date of June 30, 2021.  

These last two weeks have been busy from the IRS and SBA – with Congress in the final phases of stimulus package negotiations, we are sure to have further updates for you in the coming week. As always, we welcome you to follow along our Stimulus Package Headquarters resource center, where we will continue to publish information as notable guidance becomes available. If you have questions on the above information, please reach out to your Withum advisor.

Ed Kommers, Executive Director of the MCA of Western Washington (MCAWW) announced that MCAWW Associate Director Robin Cowper was elected Chair of the local union-management apprenticeship (JATC) committee. She is the first woman chair and the first association executive to hold that position locally.  

The apprenticeship committee is one of the most critical, important, and visible labor-management entities in our industry.

Robin’s election is also significant in that it was suggested by the employer members on the committee and fully supported by the local union business manager.

In addition to serving on the committee for a number of years, Robin has shown her dedication to apprenticeship by teaching soft skills classes to apprentices, participating in interviews, and conducting “mock interviews.”

Ed Kommers said, “Our ever-increasing number of female apprentices will see an apprenticeship committee that reflects the demographics of the 500 apprentices in the program. Robin will do well on the committee and Good Luck to her!”

National accounting firm Withum shares some thoughts on recent developments related to the PPP, PPP2, Loan Forgiveness, and Employee Retention Tax Credits.

White House Announces Changes to PPP:

Yesterday afternoon, President Biden announced changes to the PPP geared toward making the program easier to access for smaller businesses. Last night, the SBA released further guidance solidifying these changes: 

• Starting February 24, 2021 at 9am, the SBA will establish a 14-day exclusive loan application period for businesses/not for profits with fewer than 20 employees. 
• SBA will also enact the following changes to promote equitable access to SBA relief:
  • Allow sole proprietors, independent contractors and self-employed to receive more financial support by revising the PPP’s funding formulas for these categories
  • Eliminate restrictions for small business owners with non-fraud felony convictions and restrictions for student loan debt delinquency
  • Ensure access for non-citizen small business owners who are lawful US citizens (ITINs will be used for PPP)
• The adjustments to the funding formula for these groups are not available at this time, neither is any information on whether these borrowers who have previously received PPP2 funding can apply for more with their lender
• It is not clear if/how this will affect applications that are currently in processing with lenders or the SBA or whether funding will be delayed in these instances

PPP2 Update:

After re-opening for business in mid-January with new appropriations of $284 billion, the PPP has had it’s fair share of bumps along the way. Here are some updates:

• Through February 21, the program has had 1.9 million loans approved for approximately $140 billion in loan dollars during 2021. Average loan size of approximately $73k is considerably less than the first round, as expected due to the employee count and maximum loan amount standards imposed
• The SBA installed more than 50 validation checks to prevent fraud and misuse of program funds. An unintentional effect of this was that many otherwise eligible borrowers were being held from receiving funds due to “hold codes” not applicable to their situation. The SBA has indicated that they are working to correct this, and on February 10, 2020, issued guidance to lenders on how to bypass to allow borrowers to receive their funding. 
• The SBA has installed a loan cap of $35,000 per employee for funding within either a PPP1 or PPP2 loan. This cap is not specified anywhere in the legislation or subsequent guidance, however they have been limiting certain loan amounts of borrowers for this through the SBA E-Tran system. We believe this would be calculated at $20,833 in wages and $14,117 of employer sponsored health insurance, retirement contribution and state and local taxes.  We are not sure how they are determining the $14,117 amount as that information is not supplied on an employee basis.
• In last night’s release, the SBA announced they are working with their partners to improve the “digital front door” – presumably aimed at correcting some of the hold code issues previously identified. 

For a refresher on the eligibility criteria for receipt of a second draw PPP loan, please visit our article here.

Loan Forgiveness Update: 

The SBA has published the following forgiveness data through February 18, 2021:

Employee Retention Tax Credits (“ERC”):

Outside the PPP, the revamped ERC program has been the hottest topic of the new year for businesses in need of relief after the downturn has negatively impacted their revenues. The program, which carries a refundable $19,000 credit per employee for businesses who qualify for both 2020 and 2021, should be explored by ALL small businesses who have either had significant reductions in gross receipts or were fully or partially suspended due to government orders during 2020. A brief summary of each program is as follows: 

• 2020 Opportunity: The CAA removed the requirement that businesses cannot obtain a PPP loan and claim the ERC. This means that any business that previously obtained a PPP loan can now retroactively claim the ERC for 2020 if they qualify. The test for the 2020 ERC is that the business must have suffered either (i) a full or partial suspension of its business operations due to COVID-19, or (ii) it experienced a decline in gross receipts for any quarter in 2020 by more than 50% compared to the same quarter in 2019.
• 2021 Opportunity:  Under the CAA, businesses can now claim an ERC for the first two quarters of 2021, and the rules are less restrictive than they were in 2020. Two key changes include: (i) the maximum credit per employee is $14,000 in 2021, compared to $5,000 in 2020, and (ii) the decline in gross receipts test has been relaxed to include a decline of 20% instead of 50%. Businesses can also utilize the prior quarter to establish eligibility for the 2021 program.  This means for Q1 2021, the Q4 2020 can be used to determine the 20% decline in revenues. There are other expansions of the ERC that are favorable for businesses with employee counts between 100 and 500.
• Note that businesses can only claim the ERC for eligible wages that were not used to support PPP loan forgiveness, and this prohibition against double dipping applies in 2020 and in 2021. 

Our team has put together some resources for small businesses to start evaluating whether they might benefit from this program. Please visit our ERC flowcharts here, or our article on the overall program here. We also invite you to view our on-demand webinar from last week here.