While most of the Infrastructure Investment & Jobs Act (IIJA) is focused on physical infrastructure projects across the country, there are a handful of tax provisions included in the bill as well, including:
End of Employee Retention Credit
The American Rescue Plan Act extended the Employee Retention Credit (ERC) for the third and fourth quarters of 2021 and is worth up to $7,000 per qualifying employee per quarter. Now, however, the passage of the IIJA means the ERC is no longer available for wages paid after September 30, 2021. That is unless you are considered a “recovery start-up” business which is defined as a business that:
- Began operation after February 15, 2020
- Has annual gross receipts of less than or equal to $1 million
- Employs one or more employees other than the owner(s)
Those that meet these qualifications can still claim the ERC for up to $50,000 per quarter for the third and fourth quarters of 2021.
New Reporting Requirements for Digital Currencies
Digital asset brokers will now be required to report the cost basis of these assets to the IRS in the same way that brokers report stock and bond trades starting in 2023. Additionally, digital assets will be treated in the same way as cash, meaning that those that own or trade in them will have to submit Form 8300 when they receive over $10,000 in one, or multiple related, transactions. We expect guidance will be issued on this before 2023, but some smaller businesses that currently accept cryptocurrency as payment may decide to stop to avoid the reporting burden brought on by this change.
Other Miscellaneous Changes
The IIJA also extends some highway-related taxes and modifies certain superfund excise taxes, as well as allowing private bonds for qualified broadband projects and carbon dioxide capture facilities.
While there weren’t a lot of tax provisions in the IIJA, there are quite a few in the Build Back Better bill. These include a surtax on millionaires, a corporate minimum tax, expansion of the net investment income tax, adjustments to the business interest limitation rules and other provisions to raise revenue to fund the bill’s nearly $2 trillion in expenditures. As it moves forward – and certainly if it passes – we will keep you posted on what it means and how it may impact your personal and business taxes.
If you have any questions, or if we can provide any help, don’t hesitate to reach out.