Last week, the bi-partisan $1.2 trillion-dollar Infrastructure Bill (known as the Infrastructure Investment and Jobs Act) was passed by House after passing the Senate in August, and it is now waiting for the President to sign. This provides much needed spending on America’s roads, railways, and other transportation systems.
Unfortunately, in order to pay for the Bill, some of the funds earmarked under the CARES Act and succeeding bills were redeployed to help cover the tab for the Infrastructure Bill, the most significant of which was the 4th quarter Employee Retention Tax Credit (ERTC) funding. For many companies and organizations that are still experiencing revenue declines of 20% or more attributable to the COVID-19 pandemic, this means an end to the ERTC funds that have been helping to stabilize their financial operations … and as we have seen a lot during the everchanging flow of CARES Act relief/support and COVID related regulations, the change is retroactive to October 1, 2021, the beginning of the quarter. While we have been warning businesses that this could happen, for those that have been relying on ERTC funding to help pay their staff, this will still have a sharp sting.
Please note that this bill is separate from the Build Back Better (BBB) Act which has gone through several revisions and still has yet to be introduced for a vote. The BBB Act is where the majority of the significant tax changes that have been proposed and discussed over the last month will be enacted. As part of passing this current Infrastructure Bill, the House agreed to a future vote on the BBB Act, which many wanted to pass in unison. The size of the BBB Act has significantly decreased from its original proposal and still does not yet have full democratic senate support; it will require all 50 democratic senators to pass. Until the negotiations have hit a point where the Democrats are confident it will pass, the changes in the BBB Act are still very fluid and could still change further. Once that bill becomes closer to enactment, we will share the impactful changes…whatever they may ultimately be.
If you have any questions, please do not hesitate to contact us … Staying Connected.
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