How the infrastructure bill affects the Employee Retention Tax Credit (ERC)

The new infrastructure bill, approved and signed November 2021, will end the ERC for the fourth quarter of 2021, as part of a cost-saving initiative.  

The bill repeals the fourth quarter for those employers whose business was partially or fully suspended during COVD-19 by government orders and also for those employers who experienced a significant decline in revenue.

Despite the repeal, you can still claim your ERC to help get your business back on track.

What small and mid-sized businesses should know about the update:

  • The ERC will stay intact for 2020 (beginning March 13) and the first three quarters of 2021 (ending September 30)
  • For 2021, employers can qualify for 70% of the first $10,000 of qualified wages paid per employee in each qualifying quarter (an increase from 50% in 2020). 
    • That means: for the first three quarters of 2021, the maximum credit available to eligible employers is $21,000 per employee ($7,000 x 3 quarters)
    • There is no cap on the number of employees that are paid in each quarterly period 
  • The cost of employer-paid health benefits could be considered part of employees’ qualified wages
  • Employers who took out a PPP loan can still apply

 

According to Forbes, nearly 70% of small and medium businesses qualify for the ERC due to loss of revenue or because their business (or suppliers) was impacted by a government mandate. 

There’s still time to claim your benefits! Talk to Rebate today about your ERC refund for qualifying quarters in 2020 and 2021.  We’re here to make it easy.