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Lawmakers intend to repurpose some $205 billion in untapped Covid-19 relief funds to help pay for the $1 trillion infrastructure bill that awaits a House vote this month. One of the programs on the hit list: the employee retention tax credit (ERTC), a refundable credit designed to make it easier for businesses to keep workers on the payroll.
The credit, which had been authorized to run through the end of the year, lets business owners access as much as $28,000 in incentives per employee for 2021. Ending it a quarter early--that is, on October 1 instead of December 31--will reduce that incentive to $21,000 per employee for the year. While any free money is a good thing, the timing of the haircut couldn't be worse for small businesses that were relying on the credit--especially as the Delta variant puts a damper on the economic recovery.
As of May, just under 146,500 employers had claimed about $10.2 billion in ERTCs, according to a July 2021 Government Accountability Office report. Many more businesses that are eligible for the credit don't realize it, says Bill Smith, national director of tax technical services at CBIZ MHM's National Tax Office in Washington, D.C. Read our story to learn if you’re eligible, and how to claim the credit before it expires. |
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