Employee Retention Credit – Changes from The Infrastructure Investment and Jobs Act

On November 15, 2021, President Joe Biden signed The Infrastructure Investment and Jobs Act. The new law includes significant changes to the Employee Retention Credit (ERC) for the fourth calendar quarter of 2021.

The ERC has been eliminated for wages paid after October 1, 2021. For employers that were anticipating a credit for the fourth quarter of 2021 and have been holding payroll tax deposits should begin making deposits again immediately. We will continue to monitor if the IRS grants any relief for deposits that were not made timely.

An employer can still claim an ERC of up to $50,000 if they qualify under the recovery startup business rules for the fourth calendar quarter of 2021. This opportunity applies to businesses starting after February 15, 2020 and having annual gross receipts of less than $1 million. If the employer owns multiple businesses, there are additional test that will need to be met before determining eligibility.

While the ERC is eliminated, there is still opportunity to claim credits related to 2020 and the first three quarters of 2021. To see if you may qualify, refer to our July 27th Webinar to learn more about the credit. We’re here to help. Please reach out to HBK to discuss your situation.

About the Author(s)
Donald is a Senior Manager in the Youngstown, Ohio office of HBK CPAs & Consultants. He is also a Tax Specialist for HBK Manufacturing Solutions and serves numerous manufacturing clients, performing tax compliance, planning, and consulting. His background in taxation includes more than seven years working with privately held businesses and high-net-worth individuals. His areas of expertise include partnerships, S corporations, C corporations, and individuals. He also assists his clients with year-end planning, merger and acquisition planning, choice of entity planning, and conflict resolution. Donald worked with a national accounting firm before joining HBK in November of 2020. For more information contact Donald at (330) 758-8613; or by email at dtrummer@hbkcpa.com.
Hill, Barth & King LLC has prepared this material for informational purposes only. Any tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or under any state or local tax law or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. Please do not hesitate to contact us if you have any questions regarding the matter.