ERC Update for Q4 2021
ERC for Q4 2021 Has Been Discontinued for Most Employers But Remains in Effect for RSB’s
Following a vote in the U.S. House of Representatives on November 15, 2021, President Biden signed the Infrastructure Investment and Jobs Act (IIJA) legislation into law.
The passing of America’s $1 Trillion Infrastructure Bill effectively repealed and eliminated the availability of the Employee Retention Credit (ERC) for wages paid in the 4th quarter of 2021 for most employers.
There are still some open questions regarding companies that already used ERC in the fourth quarter (before Nov. 15, 2021, the date the bill was signed into law) and whether it will need to be repaid in full or will incur any penalties.
While we await clarification from the IRS on these issues, there is a class of employers still eligible for Employee Retention Credits, even for Q4 of 2021.
This class is known as “Recovery Startup Businesses”, or “RSB’s” in short.
An RSB is an employer that does not qualify under either of the first two eligibility gateways and commenced a trade or business after February 15, 2020, for which the average annual gross receipts over a three-year lookback period (prorated for periods less than three years) does not exceed $1 million annually.
While eligible employers generally are limited to a credit of $7,000 per employee per quarter in 2021, an RSB is limited to a total credit of $50,000 per quarter for all employees.
If your business fits the criteria of an RSB, Fingercheck can help you navigate your claim, please reach out to our team here, and we will be more than happy to help.