The Infrastructure Investment and Jobs Act was signed into law by President Biden on November 15. Described as a once-in-a-generation investment into the Nation’s infrastructure and ability to compete, it aims to address a wide range of issues. A key component of the law centers around repairing deteriorating, or outdated, elements of our infrastructure. This includes approximately $550 billion to be invested in improvements to roads, bridges and waterways.
The facts sheet released by the White House describes the intent of the bill as follows:
It will help rebuild America’s roads, bridges, and rails; expand access to clean drinking water; work to ensure access to high-speed Internet throughout the Nation; tackle the climate crisis; advance environmental justice; and invest in communities that have too often been left behind. It will accomplish all of this while driving the creation of good-paying union jobs and growing the economy sustainably and equitably for decades to come. Source
Additional areas of focus within the infrastructure bill are access to reliable high-speed internet, access to clean drinking water, and strengthening manufacturing and supply chains.
Infrastructure Bill and the Employee Retention Credit
The new infrastructure bill makes changes to the Employee Retention Credit. Created by the CARES Act, the tax credit was set to expire on December 31 of this year. The newly signed legislation changes this, moving the expiration date for the Employee Retention Credit to September 30, 2021. This makes wages paid after this date ineligible for the credit unless they are paid by a recovery startup business eligible under ERC.
As with previous legislation, the language of the bill leaves questions surrounding how it should be implemented. Here are a couple key areas that are currently unanswered:
- What happens to employers that reduced their tax deposits in anticipation of receiving the tax credit.
- What happens to employers that requested an advance of the tax credit.
This is a large and wide-reaching piece of legislation that will require an in depth look now that it is the law of the land. We will be watching for IRS guidance in particular on how it affects the Employee Retention Credit and the construction industry and will follow up as information becomes available.
The material presented here is educational in nature and is not intended to be, nor should be relied upon, as legal or financial advice. Please consult with an attorney or financial professional for advice.