Paper drywall tape is designed to form a bond with the paper surface of drywall. Finishers install paper drywall tape over the seams between different boards by laying on a thick coat of joint compound and pressing the tape into the joint compound application. They then wipe away the excess, leaving the taped seam smooth and flat.
Sometimes framing issues require drywall finishers to apply joint compound to exposed plywood in an effort to camouflage the wood and make it look as if the subsurface is uniform. For example, if a portion of a wall must be plywood (say, to provide a stable surface for hanging a heavy cabinet or shelf), builders will install drywall next to it so that the two different surfaces are flush with each other. Drywall finishers then cover the wood area with joint compound and install tape over the seam between the drywall and the plywood.
If you install drywall tape over plywood, cracks might form eventually, especially if temperatures and humidity levels are inconsistent. Drywall and wood react differently to heat and moisture, so minor differences in the way they shift and flex might cause the seam between the two different materials to widen, which will cause the tape to crack.
Sometimes you can cover plywood with joint compound and paper drywall tape without causing future problems. But joint compound is designed to adhere to drywall, not wood, so avoid applying joint compound over wood if possible. You just can't predict how well the joint compound will adhere over time. But if there is no other option, and if you're willing to make repairs in the future, you can install drywall tape on plywood.
Don't install drywall tape on plywood that you will walk on. For example, don't attempt to seal the gaps between different boards of plywood with drywall tape and joint compound. The frequent vibrations caused by footsteps will make the joint compound crack.
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