The recently signed Infrastructure Investment and Jobs Act ended the ERTC retroactively to October 1, which would reduce the maximum credit available from $28,000 to $21,000 per employee. This also means that employers that had already taken this credit for the 4th quarter will need to pay back the payroll taxes retained.
The one exception to the adjusted expiry date is for “Recovery Start Up Businesses” (a/k/a RSBs), which are defined as businesses that meet the following criteria:
- Started in operation after February 15, 2020
- Generated average annual gross receipts of $1 million or less
- Employs 1 or more non-owner
- Does not qualify for the ERTC
If you believe you might qualify as an RSB or have any questions concerning the ERTC it is highly recommended that you seek input from a qualified tax consultant. The questions surrounding this program are very nuanced and could be quite complicated, with significant potential tax liabilities possible. In addition, we suggest addressing the impact of these changes during the current tax year rather than ignore the potential impact on your business taxes.
Contact the CV SBDC team for assistance with the ERTC or to be connected to accountants in your area at contact@cvsbdc.org
or 434-295-8198.
