The Infrastructure Investment and Jobs Act, signed into law on November 15, 2021, has upended the Employee Retention Credit (ERC) for the fourth quarter of 2021 for most employers.

According to the legislation, only “Recovery startup businesses” can continue to claim ERC for the fourth quarter (limited to $50,000 for the entire quarter). These Recovery startup businesses refer to companies that began operations after February 15, 2020, and for which average annual gross receipts do not exceed $1 million for the three-taxable-year period immediately preceding the calendar quarter for which the credit is determined.

Qualified employers that have not yet claimed ERC may do so retroactively for 2020 and 2021. Contact us to learn more.