08 Nov Infrastructure bill repeals Employee Retention Credit for fourth quarter (11-8-21)
The Infrastructure Investment and Jobs Act of 2021 (HR 3684) passed both the House and Senate, and President Biden is expected to sign the bill sometime this week. The most impactful tax provision of the bill is the early expiration of the Employee Retention Credit (ERC). Under the bill, with the exception of recovery start-up businesses, wages paid after September 30, 2021, are not eligible for the ERC.
A recovery start-up business is any employer that began carrying on a trade or business after February 15, 2020, with gross receipts of less than $1 million that also meets other requirements detailed in IRS Notice 2021-49.
We are awaiting guidance from the IRS regarding penalty relief for taxpayers who did not make timely payroll deposits in anticipation of being able to claim the ERC for the fourth quarter.
Other tax provisions of the infrastructure bill include:
- Additional cryptocurrency reporting requirements for brokers;
- Disaster relief in the form of automatic filing extensions for federally declared disasters; and
- Other various provisions dealing with highway-related taxes and excise taxes.
The vast majority of tax provisions being considered by Congress are contained in the Build Back Better Act, which is still making its way through the legislative process.