Infrastructure Bill Terminates ERC Early
The House passed the Infrastructure Investment and Jobs Act (IIJA) on 11/5/2021, which the Senate passed in August. The bill is currently on the President’s desk awaiting signature and it is presumed it will be signed into law.
A significant change to ERC can be found in this latest bill. The original expiration date of the ERC program was 12/31/2021, but when IIJA is signed into law, the ERC will expire retroactively as of the end of the most recent payroll quarter, 9/30/2021. This means employers who were originally eligible for ERC for the fourth quarter of 2021, will not be eligible to claim the credit. There are exceptions for a recovery startup business.
If your company has already started to take ERC as a credit towards Q4 2021 payroll tax deposits, we recommend talking with your payroll service to determine if the employer should turn off this advance credit, as it appears it will no longer be valid during this quarter of 2021.
The link below explains the ERC provision in the infrastructure bill.
As always, if you have any questions, please reach out to your tax advisor for further information.