Employee Retention Tax Credit Reinstatement Act

Possible ERTC reinstated for 4th quarter 2021??

On December 7th a bill known as The Employee Retention Tax Credit Reinstatement Act was introduced in the U.S. House of Representatives by Rep. Carol Miller(R-WV), Rep. Stephanie Murphy(D-FL), Rep. Kevin Hern(R-OK), and Rep. Terri Sewell(D-AL). This bi-partisan supported bill would reinstate the Employee Retention Tax Credit in the 4th quarter of 2021.

Currently, the ERTC is only extended to Recovery Startup Businesses in the 4th quarter of 2021. Those are businesses that started operations after February 15th, 2020 which did not have a combination of revenue from all previously owned businesses of more than one million dollars in any of the three years previous to the opening of the Recovery Startup Business. The Employee Retention Tax Credit Reinstatement Act would expand eligibility to businesses who were affected by a required government mandate or businesses that suffered a 20% reduction in revenue when compared Q3 or Q4 2021 to 2019(or 2020 if 2019 is not available).

According to the National Federation of Independent Businesses, 13% of small employers claimed the ERTC in 2020 and 2021. Of those that claimed, 44% withheld payroll taxes on their 941 form. By reinstating the ERTC for Q4 this would allow those businesses who had already been withholding payroll taxes to correctly recoup those expenses previously withheld. Little to say, it will be worthwhile to monitor the status of this bill as it will have a major impact on the small business community.