August 4, 2021
A provision in the $1.2 trillion legislative package would largely end the employee retention tax credit (ERTC) on September 30, instead of the current December 31 deadline. Certain businesses that were created during the pandemic would still be able to use the tax break for wages paid through the end of the year.
The Joint Committee on Taxation estimated that the new end date for the ERTC would raise $8.2 billion. The provision is one of several in the bill that aims to offset the cost of spending in areas such as roads, transit, water infrastructure and broadband.
ERTC is a payroll tax credit meant to prevent businesses from laying off workers during the pandemic. The credit was initially established by the $2.2 trillion CARES Act in March 2020. It was later expanded through subsequent coronavirus relief laws. The $1.9 trillion measure President Biden signed in March extended the tax credit from June 30 to December 31.
Senators are planning to pass the bill before they leave Washington for their August recess. The House has already started its recess and is not scheduled to return to Washington until next month.
Source: The Hill