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Infrastructure bill generally ends ERC Sept. 30

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Tax Hot Topics newsletter President Joe Biden signed the bipartisan infrastructure package (H.R. 3684) Nov. 15, 2021, which includes a notable provision that would end the employee retention credit (ERC) as of Sept. 30, 2021, except for certain recovery startup businesses as defined in Section 3134(c)(5). The ERC was originally scheduled to expire at the end of 2021 for all employers.

Once the infrastructure bill is enacted, the ERC will generally only be available for employers—other than recovery startup businesses—paying qualified wages before Oct. 1, 2021. Recovery startup businesses would continue to be eligible for the 2021 ERC for qualified wages paid before Jan. 1, 2022.

Employers other than qualified recovery startup businesses that are currently claiming the ERC by reducing payroll deposits should stop this practice as soon as possible and should begin making plans to repay any ERC amounts taken on wages paid on or after Oct. 1, 2021.

Contact:
Jeffrey Martin
Partner
Washington National Tax Office
T +1 202 521 1526

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