On Friday, November 5, the House passed a $1 trillion bipartisan infrastructure bill containing a provision that eliminates the CARES Act Employee Retention Credit (ERC) for the fourth quarter of 2021. The ERC will remain intact for the full year of 2020 (beginning March 13) and the first three quarters of 2021 (ending September 30).
While the infrastructure bill eliminates the fourth quarter of the ERC, Synergi Partners anticipates that the Budget Reconciliation Bill will include a provision to restore the ERC. Synergi has been on the forefront of the everchanging legislation, and we will continue to work with Congressional Leaders to champion this initiative. Although the Budget Reconciliation Bill has not been approved yet by either the House or Senate, we believe it will be decided upon sometime in December.
Originally, Congress had planned to pass both bills on the same day. However, a delay in some issues in the reconciliation bill led to the decision by the Speaker of the House, Nancy Pelosi, to advance just the infrastructure bill.
The ERC was intended to be in place for the entirety of 2021. However, the infrastructure bill sets to eliminate ERC for the fourth quarter of 2021 as a cost-saving initiative since there was a perception in Congress that the provision wasn’t being utilized. However, many Representatives, including Representative Stephanie Murphy, D-Fla., are advocating for the ERC:
“I was proud to lead the bipartisan effort over the past year-and-a-half to establish the employee retention tax credit, which provides financial support to businesses who retain or rehire workers, rather than lay them off,” said Murphy in a letter to House leadership. “Now I’m working in partnership with Congressman Delgado to keep the ERTC in place through the end of 2021, so we can help as many workers and businesses as possible recover and rebuild from the COVID-19 pandemic.”
Businesses are still dealing with the impacts of Coronavirus (COVID-19) and are facing new challenges from the Delta variant including supply chain disruptions, government mandates, and employment shortages. By extending the ERC through the end of this year, organizations will be able to recoup their losses and build back their businesses.
The government relations team here at Synergi Partners will continue to work closely with Congressional Leaders on the fourth quarter ERC, with hopes of restoring it in reconciliation.
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For more on this topic, see these links:
- FORBES: $1 trillion bipartisan infrastructure bill
- U.S. Congresswoman Murphy: Murphy and Delgado Lead Members in Urging Support for the Employee Retention Tax Credit