Updated: Apr 6
With the passage of the Infrastructure Investment and Jobs Act, yet another change is coming to the Employee Retention Credit. This Bill (H.R.3684) brings an end to the Employee Retention Credit for wages paid after September 30, 2021 instead of the December 31, 2021 included in the American Rescue Plan Act.
I.E. There is no Q4 credit for otherwise eligible employers.
However, eligibility remains for startup Economic Recovery Businesses who are claiming their credits in Q3 and Q4 2021 only.
Criteria for an Economic Recovery Business:
Established after February 15, 2020
Annual gross receipts are limited to $1 million
Meets the ERC eligibility test even when it doesn't meet the general ERC employer requirements (reduction of gross receipts, suspension by government mandate, etc.)
Credit is limited to $50,000 per quarter.
The ERC is only available for Q3 and Q4 for "Recovery Startup Businesses" under the Rescue Act.
What We Still Don't Know: Whether businesses who previously qualified for Q4 2021 and reduced their payroll tax deposits prior to the passage of H.R. 3684 will have penalties assessed for underpayment of payroll taxes.
Still not sure if you're leaving 2020 or 2021 ERC money on the table? Contact us at 214.414.9881 for a complimentary assessment of your eligibility.