The tax provisions relating to the infrastructure bill include the termination of the ERC
Employee retention credit will be terminated sooner and reporting of crypto-asset transfers by brokers will be required due to legislation (HR 3684) that was passed by the House of Representatives on Friday night and is heading towards the President Joe Biden’s office to be enacted.
Known as the Infrastructure Investment and Jobs Act, the law was approved in the House by a 228-206 vote after being passed by the Senate by a 69-30 vote in August.
There are relatively few tax provisions in infrastructure legislation, but more significant changes could come in a fiscal reconciliation bill for fiscal year 2022 that remains under consideration by Congress. These would include extensions of recent changes to the child tax credit and the earned income tax credit; an expanded premium tax credit; lower state and local tax deduction limit of $ 10,000; changes in corporate and international taxation; and the limits on the deduction of interest charges.
Employee retention credit
Infrastructure legislation terminates the Employee Retention Credit (ERC) early, making salaries paid after September 30, 2021 ineligible for the credit (with the exception of salaries paid by an eligible recovery startup company).
The ERC was created by the CARES Act (Coronavirus Aid, Relief, and Economic Security), PL 116-136, and amended by the Consolidated Appropriations Act, 2021, PL 116-260. The American Rescue Plan Act, PL 117-2, enacted March 11, made the ERC available to eligible employers for wages paid in the third and fourth quarters of 2021; however, HR 3684 would revoke the fourth quarter extension. The IRS issued guidelines for applying for credit in the third and fourth quarters of 2021 (Notice 2021-49), but noted in those guidelines that it was monitoring these legislative developments.
Section 80603 of the legislation will impose new crypto-asset reporting requirements on brokers. The second. Definition 6045 (c) (1) of “broker” is broadened to include any person who, for consideration, performs “transfers of digital assets on behalf of another person”. For these purposes, a “digital asset” is defined as “any digital representation of value that is recorded on a cryptographically secure distributed ledger or similar technology”.
The legislation is about to amend Sec. 6045A to require brokers to provide information statements reporting any transfer of digital assets to accounts that are not managed by a broker.
The legislation will amend the automatic extension of certain time limits for taxpayers affected by disasters declared by the federal government in Sec. 7508A, which was enacted in the Establishment of Every Community for the Improvement of Retirement Act of 2019 (SECURE) PL 116-94. The definition of a disaster area in Sec. 7508A (d) (3) would be amended to mean “an area in which a major disaster occurs for which the President provides financial assistance under Section 408 of the Robert T. Stafford Disaster Relief Act and Emergency Assistance (42 USC 5174) “. Currently, this paragraph refers to the definition in Sec. 165 (i) (5) (B).
Other tax provisions
The legislation includes other tax provisions, including the extension of various taxes related to highways, and the extension and modification of certain superfund excise taxes. It would also allow private activity bonds for qualified broadband projects and carbon dioxide capture facilities.