§ 8812 Retention Payment Deadlines

• •If you hire someone to do work and hold back some money (retention), you must pay them that money within 45 days after the work is done.
• •If part of the work will belong to the government, you can wait to pay the money for that part until the government accepts it.
• •If there's a real argument about the money, you can hold back up to 1.5 times the amount you're arguing about until it's sorted out.

You hire a contractor to build a new park playground. You hold back $5,000 to make sure everything is done right.

You must pay the $5,000 within 45 days after the playground is finished. If the city needs to inspect and approve the slides and swings first, you can wait to pay the part of the $5,000 that covers those until the city says they're okay. If you and the contractor argue over $1,000 of the work, you can hold back up to $1,500 until you both agree it's fixed.