The Government is saying Goodbye to the ERC for the Fourth Quarter

Regarding the employee retention credit (ERC): lawmakers giveth, and lawmakers taketh away. (We have discussed this many times- It almost like their toddlers, they want to share their toys one minute and take it away the next.)

On March 11, 2021, the American Rescue Plan Act of 2021.

This new law extended the ERC to the third and fourth quarters of 2021. We mentioned this in a previous article. Check it out, as we wrote about in You must choose one: PPP or Employee Retention Credit? Not any more!

On November 15, 2021, the Infrastructure Investment and Jobs Act

(IIJA) ended the ERC three months early, retroactive to September 30, 2021. that two months of business owners believing they still had this support!

The fact that this law was not only passed but retroactive is quite frankly despicable.- I have to wonder while all this fighting was going on to get this bill passed if this was one of the cards that didn’t quite fit in the house of cards the new bill is built on?!?! (sorry that went on a conspiracy rant- but I don’t take it back)

This retroactive repeal was done only nine months after passage. (about a pregnancy later)

You may remember that the purpose of the ERC was to encourage small businesses to keep their employees on the payroll rather than let them go.

The ones who get to skate by this law: New business (start-ups) are still eligible for this credit. However, pre-existing small businesses no longer qualify

Planning point. You can still claim the credit for 2020 and the first 3 quarters of this year. (at least that’s something.) You may remember that the remaining credits can add up to $26,000 per employee.

And keep in mind that there’s no mad rush—you have time. You can claim the ERC anytime during the three-year statute of limitations. (Another silver lining)