The much-discussed Infrastructure Investment and Jobs Act passed by a vote of 69-30 in the Senate in mid August. The next step will happen next week when the Senate is scheduled to vote on the budget resolution that will make implementing this act possible.
Like any bill of this magnitude, it contains numerous provisions. While not many of them are tax-related, there are a few things we think you should note.
- Employee Retention Credit: If passed by the house, the infrastructure bill will end the employee retention credits (ERC) early. This means that wages paid after September 30, 2021, will not qualify for the credit. The American Rescue Plan, enacted March 11 of this year, extended the credit through the end of 2021, but the infrastructure bill would repeal this extension.
- Cryptocurrency Reporting: The bill also creates new reporting requirements for crypto-asset brokers, defined as anyone who sets up or manages “transfers of digital assets on behalf of another person.” They will now need to report any transfers of digital assets to accounts that are not maintained by broker. And just to clarify, “digital assets” are defined as “any digital representation of value which is recorded on a cryptographically-secured distributed ledger or any similar technology.” Glad we could clear that up!
Though this bill has little impact tax-wise, the budget reconciliation bill could have quite a bit. On August 9, the Senate Budget Committee released a memo listing items they would like to see included, such as:
- Child tax credit extensions
- Earned income tax credit extensions
- Child and dependent care credit extensions
- Relief from the $10k state and local tax deduction cap
- Corporate and international tax changes
- Higher taxes for high-income individuals
- Import fee on carbon polluters
We will do our best to keep you up to date on this bill, and any others, that have tax implications. And if you have any tax questions, don’t hesitate to reach out to us for help.