Successfully transitioning a closely held construction business to the next generation while providing an exit strategy to the current owners is one of the most important and challenging tasks faced by ownership. 

In order to stimulate the U.S. economy during the pandemic, the federal government enacted stimulus initiatives including the Paycheck Protection Program (PPP). The PPP enabled a business to receive a loan, with the ability to be forgiven if used according to loan guidelines that were put in place to help businesses keep their workforce employed during the COVID crisis. While many architecture, engineering, and construction (A/E/C) businesses successfully participated in the program, receiving the loan and later applying for and receiving forgiveness, the tax ramifications of receiving a PPP loan initially were somewhat unclear. One area of uncertainty was the tax deductibility of expenses covered by the PPP, which would also impact and reduce the expenses that could be claimed for the Research and Development (R&D) tax credit.

President Biden has put forward the long-awaited $2.25 trillion “American Jobs Plan” spending proposal for a massive infrastructure renovation. The “American Jobs Plan” lays out a budget of $621 billion for transportation infrastructure; $689 billion for building and utilities; and $500 billion for worker training, research and development, and domestic manufacturing initiatives.

Previously, New York Governor Andrew Cuomo reauthorized the Executive Law Article 15-A to extend until December 31, 2024. Originally signed into law in July of 1988, this law seeks to level the playing field for minority and women-owned business enterprises (MWBEs) by establishing goals for MWBE involvement in construction projects. The newest participation goal is 30% of the budget for each year of your grant and is established based on the results of a 2016 disparity study.

At first glance, it may seem like a no-brainer for architecture, engineering or construction (“AEC”) companies to apply for forgiveness of their Paycheck Protection Program (“PPP”) loan. If the loan qualifies for forgiveness, the forgiveness is not taxable, and, thanks to recently passed legislation, the expenses paid with the loan proceeds are deductible. In effect, this would be tax-free money from the government. However, an AEC company that participates in government contracts has other considerations related to PPP loan forgiveness – primarily the potential impact of forgiveness on Federal Acquisition Regulation (“FAR”) overhead rates. An AEC company that participates in government contracts must frequently calculate indirect costs (overhead) rates before submitting a bid for a contract.These rates must be compliant with the FAR, a complex set of rules governing the federal government's contract process and the rates to be billed under the contract.

Now that calendar year contractors are in the midst of preparing their financial reports for 2020, it is time to understand how banks and sureties will evaluate the PPP loans that may be included as liabilities on the contractors’ balance sheets at December 31, 2020. How will banks and sureties view PPP loans in light of an entity’s equity value and loan covenants?

ConTech startups need to clear a high bar and demonstrate tested, added value in construction.

Financially stable architecture, engineering and construction firms have been able to roll with work stoppages and workforce issues, says Phillip Ross of Anchin.

At this point, so much has happened this year that the CARES Act may seem like old news, yet its tax provisions remain in effect and, in some cases, beyond 2020 (unless subsequent legislation changes them). Careful planning may allow architecture, engineering and construction (A/E/C) firms to fully benefit from the wide and varying tax relief offered.

Anchin has once again been recognized by Construction Executive in The Top 50 Construction Accounting Firms.™

The Tax Cuts and Jobs Act (TCJA) of 2017 was generally a taxpayer-friendly legislation for the business community. However, there were several provisions in that Act that were implemented as revenue raisers to partially offset the cost of those tax breaks. One of those revenue raising provisions was the business interest expense limitation. This limitation can potentially impact construction companies of all entity types. The recently passed Coronavirus Aid, Relief and Economic Security (CARES) Act modified and increased the existing 30% business interest limitation to 50% for the years beginning with 2019 and 2020.  For partnerships, this will not apply to years beginning with 2019, but only for 2020.

Additional Guidance from SBA expands Eligibility Criteria for Partners & Self-Employed Individuals There are several updates to guidance on the PPP Loan Program that Architecture, Engineering, and Construction companies should take note of.

The impact of the coronavirus has affected nearly every industry, and the A/E/C sectors are no exception. Although essential construction is exempt from the workforce order that Governor Cuomo announced on Friday, it is likely that there may be jobs shutting down or slowing down in the near future.

Here are three strategies your firm should consider to draw and retain talent to your business, according to Phillip Ross of Anchin.

With the Tax Cuts and Jobs Act (TCJA) going into effect, many construction business owners are re-evaluating their choice of entity. The TCJA has cut the federal “C” corporate income tax rate to a flat rate of 21% from a top rate of 35% and removed the corporate alternative minimum tax (AMT). Owners of pass-through entities — partnerships, S corporations and LLCs — are taxed on their shares of business income at rates as high as 37% (down from 39.6%). A C corporation offers substantial tax advantages for businesses. Pass-through entities offer advantages as well. Here are some factors to consider when determining whether to restructure your business as a C corporation.

Anchin hosted its 6th annual industry-leading forum, Future Forward 2020: What’s Next for New York Real Estate and Construction, on February 4 at the Sheraton New York Times Square Hotel. The half-day conference brought together leading real estate owners and developers, construction executives and other key business decision-makers to discuss the rapidly transforming New York City market.

Anchin has been ranked as a Top 50 Construction Accounting Firm by Construction Executive Magazine recognizing the quality of Anchin's Construction Industry Group.

On Friday, September 28, leading New York City based construction accounting, tax and consulting firm Anchin hosted its 13th annual State of the Construction Industry Conference, “Building the Future: The Evolution and Impact of Transportation and Beyond,” at the Yale Club in midtown Manhattan.

Leading businesses in the construction industry were recognized and honored at the 11th Annual New York Construction Awards, hosted by leading NYC-based accounting, tax and consulting firm Anchin on Thursday, June 14th at Club 101 in midtown Manhattan.

The fourth annual Anchin Construction & Development Forum was held on February 15, 2018 at The New York Academy of Sciences. 

Anchin Block & Anchin LLP, host of the annual New York Construction Awards, awarded innovators, leaders and rising stars in the construction, architecture and engineering industries on June 14, 2017. This year’s winners were announced at an elegant ceremony at Bloomberg L.P. in New York City.

Anchin Block & Anchin LLP, host of the annual New York Construction Awards, has announced this year's winners.

The third annual Anchin Construction & Development Forum was held on February 9, 2017 at the TKP New York Conference Center. Hundreds of incredible, high-level professionals whose work greatly impacts the real estate, construction, architecture and engineering landscapes of the greater New York City area, came together to discuss trends, forecasts, ideas, innovations and other relevant topics.

At the 2017 Anchin Construction & Development Forum, Mark Boekenheide of Hudson Yards, Jonathan Drescher of The Durst Organization, James Hannah of Bright Power, AJ Pires of Alloy, Peter Rosenthal of Savanna and Mitchel Simpler of Jaros, Baum & Bolles discussed the exciting and often risky topic of innovation as it relates to construction, design and development in and around NYC.

Dear Construction Clients and Friends, On September 7, 2015, President Barack Obama signed an Executive Order requiring federal contractors to offer their employees up to seven days of paid sick leave per year. The executive order will impact contracts entered into on or after January 1, 2017.

Anchin, Block & Anchin LLP held its annual New York Construction Awards honoring construction, architecture and engineering industry innovators, leaders and rising stars.

To our Clients and Friends, Like most companies, Architecture and Engineering (A&E) firms need a full understanding of how the Affordable Care Act will impact their business so they can accurately budget and plan.

Many Architecture and Engineering firms are expanding their scope of work into international projects. These companies may be able to reduce overall taxes and increase cash flow with the proper tax planning and structure.

The United States Senate is considering a proposal to eliminate the cash basis of accounting rules that currently exist for many professional service firms, potentially requiring these firms to change their tax method to the accrual basis. This change would greatly impact cash flow, and potentially hinder growth potential in professional service firms.

The construction industry is alive and well in 2017. As a major force in New York and the greater US economy, it employs more than…

Construction companies face a variety of overwhelming, unique challenges. Apart from the competitiveness of the industry—which is a challenge in itself—the fact that many projects…

Photo Gallery for the Anchin Future Forward 2020 Conference:What’s Next for New York Real Estate and ConstructionPhoto Credit: Aaron Adler Photography…

Photo Gallery for The New York Construction Awards 2018 held at Club 101 

Photo Gallery for the State of the Construction Industry Event 2018 held at The Yale Club

Photo Gallery for The New York Construction Awards 2017 held at Bloomberg L.P. 

Photo Gallery for State of the Construction Industry 2016 held at The Cornell Club

Photo Gallery for State of the Construction Industry 2015 held at Bloomberg LP

Photo Gallery for New York Construction Awards 2015 held at Club 101

Photo Gallery for Anchin Construction & Development Forum 2015 held at Scholastic Auditorium

Photo Gallery for State of the Construction Industry 2014 held at Club 101

Photo Gallery for State of the Construction Industry 2013 held at Club 101

Photo Gallery for New York Construction Awards 2013 held at Club 101

Photo Gallery for State of the Construction Industry 2012 held at Club 101

Photo Gallery for MWBE Building the Future 2012 held at Club 101

Phillip Ross shares how his group's value-added expertise differentiates it in the marketplace. 

Phillip Ross shares how Anchin's Construction Group meets specific client needs and helps fuel clients' growth.

In this recorded webinar, Anchin assembled a panel of tax professionals from our Architecture, Engineering and Construction Industry Group to specifically address issues relevant to the A/E/C industry.

A look back at past honorees of the New York Construction Awards, presented by Anchin. 

Anchin Partner Phillip M. Ross discusses tax considerations for growing construction companies, specifically adjusting processes to meet requirements that take affect once certain levels of growth are achieved, and methods of preserving cash flow.

Anchin Partner and Construction Practice Leader, Phillip Ross, discusses trends in the construction industry and tips for companies planning to accommodate new trends.

Anchin Partner Phillip Ross, Architecture and Engineering Group Practice Leader, discusses considerations that A&E firms should focus on when planning for the succession or transition of the business.

At the 2016 New York Construction Awards, Phillip Ross, Partner at Anchin, Block & Anchin LLP, welcomed attendees and Richard T. Anderson, President of the…

Anchin, Block & Anchin LLP Partner Phil Ross talks about achieving tax savings.…

Anchin, Block & Anchin LLP Partner Phil Ross talks about financial statements and their impact on surety programs.…

Anchin, Block & Anchin LLP Partner Phil Ross talks about Architects & Engineers.…

Watch our State of the Construction Industry lookback!…