Many business interests from around the country are applauding bipartisan legislation filed in Congress this week that would restore the Employee Retention Tax Credit (ERTC) retroactive to September 30, 2021. You will recall the ERTC was passed as part of the CARES Act back in 2020 to help businesses retain workers during the shutdowns of the coronavirus pandemic. The CARES Act established an expiration date for the ERTC of December 31, 2021 however Congress ended the program early – and relatively speaking, without warning – in favor of passing the $1 trillion bipartisan infrastructure bill (the Infrastructure Investment and Jobs Act [ILJA]) favored by the Biden administration. When President Biden signed ILJA into law last November, the ERTC was retroactively eliminated. The pending legislation (Employee Retention Tax Credit Restoration Act – S.3625) was sponsored by Democrat Senators Maggie Hassan (D-NH), Mark Warner (D-VA) and Ben Cardin (D-MD), along with Republican Senators Tim Scott (R-SC) and Kelly Moore Capito (R-WV). Should the legislation make it through Congress and be signed by the President, it would restore 4th quarter access to the ERTC for the 2021 tax year thereby giving qualified businesses the ability to claim an additional tax credit of $7,000 per employee for Q4. Originating with 54 bipartisan sponsors in the House (H.6161), it still has a long way to go, but as 2022 is an election year, Washington will be looking to win favor with voters . . . stay tuned.
