The Infrastructure Investment and Jobs Act is a $1.2 trillion bill that provides funding for roads, bridges, ports, and railroads including highway safety programs and public transit, as well as investments in water and power infrastructure, broadband internet, climate initiatives, and environmental remediation.
Read on to see how this bill impacts nonprofits.
Early termination of the Employee Retention Credit (ERC)
- Program ends one quarter early – The Act terminates ERC as of September 30, 2021 for all employers but a recovery startup business (RSB).
- An RSB is a business that began operations after February 15, 2020 and had less than $1 million in revenue for each of the prior three years and does not meet either ERC eligibility test (business suspension or gross receipts test).
- An RSB may claim the ERC for both the third and fourth quarter of 2021 but the credit is limited to $50K per quarter for all employees.
- Deadline reminder – As a reminder for our clients and friends – employers who didn’t claim the ERC on their originally filed quarterly payroll tax return (Form 941) may retroactively claim it by filing an amended return (941-X). Employers have three years from the date the original return was filed, or two years from the date taxes were paid, to claim the ERC.
Funding opportunities for nonprofits
- Priority investments – The Act prioritizes investments into two main categories: transportation and infrastructure.
- Transportation investments include funding for highways, bridges, rails, airports, ports, and public transit, as well as investments in transportation safety, electric vehicle infrastructure, and reconnecting communities.
- Infrastructure investments include funding for clean water, climate control, environmental remediation, and broadband access.
- New or expanded grant programs – Nonprofits who support transportation and infrastructure initiatives may be eligible to receive funding – directly or indirectly through states and local governments – from new or expanded grant programs.
- Direct opportunities – Below are just a few examples of programs under which nonprofits may be eligible to receive funding:
- Planning and/or capital construction grants for the renovation or replacement of a facility that restores community connectivity (Sec. 11509)
- Advanced transportation research pilot program grants (Sec. 25013)
- Grants for nonprofits partnering with public schools to assist with energy improvements (Sec. 40541)
- Pilot program for energy efficiency materials projects that result in energy or fuel use reductions (Sec. 40542)
- Grants to increase internet access and the adoption of broadband (Sec. 60305)
- Grants to improve residential and community recycling programs through public education and outreach (Sec. 70402)
- Grants to nonprofit organizations that support minority business enterprises (Sec. 100401)
- Indirect opportunities – Below are examples of programs under which nonprofits may be eligible to receive state appropriations:
- Establishing safe school routes for children in primary, middle, and high schools (Sec. 11119)
- Projects that seek to achieve a reduction in the number of wildlife-vehicle collisions (Sec. 11123)
- Grants for electric vehicle charging and fueling infrastructure (Sec. 11401)
- Testing or compliance monitoring for and remediation of lead contamination in drinking water at schools and childcare programs (Sec. 50110)
Cryptocurrency reporting requirements
- On brokers – The Act imposes cryptocurrency reporting requirements on brokers providing transfers of digital assets. For purposes of the Act, a broker is defined as any person who (for consideration) is responsible for regularly providing any service effectuating transfers of digital assets on behalf of another person.
- Required information – Cryptocurrency information is required to be reported to both the IRS and to customers, including gross proceeds from the sale of digital assets as well as amounts of capital gains.
- Focus on transparency – One of the goals of the new legislation is to reduce the underreporting of cryptocurrency gains, which are already required to be reported on income tax returns.
- Effective date – The new reporting requirements are effective January 1, 2023 (tax returns filed in 2024).
YPTC is here to help – in the coming months, federal agencies and states will be releasing information on grant applications and program requirements. Your YPTC Associate can help your organization gather the documentation needed to apply, determine the proper accounting treatment for grants and contracts received under the Act, and assist with ongoing compliance.