Infrastructure Bill Tax Provisions

In mid-November President Biden signed the Infrastructure Investment and Jobs Act into law. This new legislation includes tax provisions related to the Employee Retention Credit and other items important to small businesses, so I wanted to take a moment to update you all on how this law may affect your business. And while this law only includes a few tax provisions, more extensive changes may be coming in 2022.

What is the Infrastructure Investment and Jobs Act?

This new legislation aims to provide significant public investment in US transportation networks, broadband, and public works projects. It is designed to address a range of critical needs in the United States’ built environment by modernizing the country’s aging infrastructure through extensive upgrades for roads and bridges. The act also includes funding to replace lead pipes that provide drinking water and to remediate pollution in disadvantaged communities.

You might be wondering how this law will affect your business, especially if you’re not in one of these industries. The reason is because of the changes to the Employee Retention Credit included in the bill.

Employee Retention Credit

One of the most important changes to come with this law is the early termination of the Employee Retention Credit (ERC). Wages paid after September 30, 2021, are now ineligible for the credit. The ERC was an important relief program created by the Coronavirus Aid, Relief, and Economic Security (CARES) Act, and it allowed for employers to claim up to $10,000 per year per employee for 2020 and up to $10,000 per quarter per employee for 2021.

Though this credit is ending early, make sure you are claiming eligible wages prior to September 30, 2021. You can read more about the ERC on our blog.

Looking into 2022

As 2022 is beginning, we should start thinking about what may come in 2022. Congress is still considering the fiscal year 2022 budget reconciliation bill that will bring about many changes. Some of those include extensions of changes to the child tax credit and the earned income tax credit; an expanded premium tax credit; relief from the $10,000 state and local tax deduction cap; corporate and international tax changes; and limits on the interest expense deduction.

We’ll keep you updated with any changes coming for 2022. In the meantime, give us a call with any questions!

-Stanley & Kelly