On Friday, November 5, 2021, the House of Representatives passed H.R. 3684, otherwise known as the Infrastructure Investment and Jobs Act, with 228 votes in favor and 206 votes opposed. The bill passed the Senate in August and was signed by President Biden on November 15th.
A great many employers are very concerned, as described below.
While this legislation is sparse in terms of tax law changes its passage would still have a major impact on taxpayers.
Irked by ERC Changes
One key aspect of this legislation is the early termination of the employee retention credit (ERC). This credit was first created by the CARES Act and has been amended a number of times since its enactment.
The preface to our book on the Employee Retention Credit provides the following explanation of the credit:
The Employee Retention Credit ("ERC") was established under the March 27, 2020 CARES Act as a dollar-for-dollar credit against employment taxes available to certain employers as reimbursement for "qualified wages" paid to employees during periods of economic hardship or when a business is closed in 2020 (and now 2021). As with the Paycheck Protection Program ("PPP"), the purpose of the ERC was to incentivize employers to keep employees on the payroll.
The ERC was originally set to expire on January 1st, 2021, but it was given a second life following the passage of the Economic Aid Act on December 27, 2020. On March 11, 2021, the American Rescue Plan Act of 2021 was signed into law, and further...
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