While ERTC is ending early, it is still available for the first three quarters
By Benjamin R. Bostic
On Monday, President Biden is expected to sign into law the $1.2 trillion infrastructure bill, which includes a provision to ending early the Employee Retention Tax Credits (ERTC) program.
Though businesses cannot take advantage of ERTC in the fourth quarter, they can still take advantage of the program for prior quarters. This credit is also available for companies that also obtained PPP loans.
An ERTC refresher
In 2021, ERTC is available to businesses with fewer than 500 employees and meet specific revenue reduction requirements or had to fully or partially shut down due to government order. The program allows qualifying businesses to receive tax credits up to $7,000 per employee per quarter.
Under the pending infrastructure bill, these credits are now only available for the first through third quarters of 2021. The credit can also be claimed during the second through fourth quarters of 2020.
Earlier this year, the IRS released guidance on how businesses can use the ERTC program to cover certain payroll costs that exceeded money received under a Paycheck Protection Program (PPP) loan. If a business does not receive PPP loan forgiveness, it can also use ERTC to cover allowed payroll expenses.
For more information on the IRS’ guidance on the ERTC program, click here.
Additional provisions in the infrastructure bill
The pending infrastructure bill also winds down the PPP and COVID-19 Economic Injury Disaster Loan Advance programs by removing unallocated funding – ending the opportunity for any new applications.
Additionally, the bill tightens the tax reporting requirements for cryptoassets. The legislation requires cryptocurrency exchanges to report capital gain and loss data – similar to stock reporting requirements. For more information on investing in cryptoassets such as Bitcoin without running afoul of the IRS, click here.
The guidelines surrounding federal COVID-19 relief programs are complex and the Boyer & Ritter team is ready to help.
To learn more about engaging us for business relief assistance, please contact us here.
Benjamin R. Bostic, CPA, is a principal at Boyer & Ritter with experience providing tax and accounting services for closely-held businesses, individuals, not-for-profit organizations. Reach Ben at 717-264-7456 or firstname.lastname@example.org