November 8, 2021
Jessica L. Jeane, J.D.
Managing Director, Public Policy
Congress has sent a bipartisan tax-related infrastructure bill to President Biden’s desk where he is expected to sign the measure into law.
The House late on November 5 approved the Infrastructure Investment and Jobs Act (H.R. 3684), as amended, by a 228-to-206 vote. The measure cleared the Senate by a 69-to-30 vote last August.
Employee Retention Credit
Most notably, section 80604 of the legislation repeals the fourth-quarter extension for the Employee Retention Credit (ERC), making wages paid after Sept. 30, 2021, ineligible for the credit (except for wages paid by an eligible recovery startup business).
The section 3134 ERC was created under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, (P.L. 116-136), and amended by the Consolidated Appropriations Act, 2021 (P.L. 116-260). The American Rescue Plan Act (P.L. 117-2), made the ERC available to eligible employers for wages paid during the third and fourth quarters of 2021. HR 3684, however, will terminate that fourth-quarter extension.
Although HR 3684 cleared Congress approximately a month after the fourth quarter already began, the legislative language was approved in the Senate last August and had been delayed in the House. The Joint Committee on Taxation (JCT) estimates the ERC provision to raise approximately $8.2 billion over a 10-year period, (JCX-33-21.)
Other Tax Provisions
Additionally, some of the other tax-related provisions included in HR 3684 are as follows:
- section 80603 institutes new information reporting requirements on brokers for digital assets such as cryptocurrency;
- section 80201 extends and modifies certain superfund excise taxes;
- section 80501 modifies the automatic extension of certain deadlines for taxpayers affected by federally declared disasters;
- section 80102 extends certain highway-related taxes; and
- section 80601 modifies the tax treatment of contributions to the capital of a corporation.
More significant tax law changes are expected to be included in a fiscal year 2022 budget reconciliation package currently under negotiation in Congress. The Biden administration’s Build Back Better Act (HR 5376), which is expected to hitch a ride with the spending legislative vehicle, includes tax reform proposals that span across individual, corporate, and international taxation.