Daily Update on Taxes From The Business Tax Advisors at Wouch Maloney in Horsham

Infrastructure Bill Passes & Employee Retention Credit Canceled after 9/30/2021

On Friday, November 5, 2021, the Infrastructure Bill cleared the House on a 228-206 vote. The bill now goes to President Biden for his signature. The new law has money for roads, bridges, ports, airports, rail transit, modernizing the electric grid, broadband internet and more. The White House is projecting that the investments will add 2 million jobs per year over the coming decade. The five-year spending package would be paid for by siphoning $210 billion in unspent COVID-19 relief aid and $53 billion in unemployment insurance aid some states have halted.

What is does not have, however, is the extension of the 4th quarter 2021 Employee Retention Credit (ERC). The infrastructure legislation ends the employee retention credit (ERC) early, making wages paid after Sept. 30, 2021, ineligible for the credit (except for wages paid by an eligible recovery startup business).

WM reported in October and August the IRS had issued guidance on claiming the credit for the third and fourth quarters of 2021. As a result of the passage of the infrastructure bill, employers may not claim the 4th quarter of 2021 credit.

WM Wisdom:
The credit may still be restored through other legislation such as the Build Back Better Act that has been introduced in the House but not passed. WM will continue to monitor legislative developments to the ERC.
If the credit is not restored, the IRS will need to issue guidance to employers that requested an advance of the Employee Retention Credit for the fourth quarter of 2021.


Should you have questions about this topic, or any other topics related to your personal or business situation, please contact us at any time.

DISCLAIMER: The WM Daily Update, WM Wednesday Wisdom, COVID-19 Business Resources, and COVID-19 Client News Alerts and other related communications are intended to provide general information on legislative COVID-19 relief measures as of the date of this communication and may reference information from reputable sources. Although our firm has made every reasonable effort to ensure that the information provided is accurate, we make no warranties, expressed or implied, on the information provided. As legislative efforts are still ongoing, we expect that there may be additional guidance and clarification from regulators that may modify some of the provisions in this communication. Some of those modifications may be significant. As such, be aware that this is not a comprehensive analysis of the subject matter covered and is not intended to provide specific recommendations to you or your business with respect to the matters addressed.