After nearly a five-month journey on Capitol Hill, the Infrastructure Investment and Jobs Act, also known as Bipartisan Infrastructure Framework or “BIF”, was officially signed into law by President Biden on November 15, 2021. Considered by many as a once-in-a-generation investment opportunity, this bipartisan piece of legislation will invest $1.2 trillion into the improvement and expansion of our nation’s road and highway systems, bridges, water systems, mass transit, and broadband accessibility. The state of Maryland stands to gain roughly $6 billion in investments for hard infrastructure plans, Chesapeake Bay restoration efforts, expansion of electric vehicle charging networks, and cyber attack prevention.
While the primary focus is on various American infrastructure projects, the legislation does include some tax-related provisions, most notably:
Employee Retention Credit Ending Early. The new legislation ends the Employee Retention Credit (ERC) 90-days earlier than outlined in the American Rescue Plan Act (March 2021), meaning wages paid after September 30, 2021 are no longer eligible for the tax credit as they were before. The only business qualifying for the ERC using wages from October 1, 2021 through December 31, 2021 would be a ‘recovery startup business’ that began after February 15, 2020.
Cryptocurrency Tax Reporting. The controversial reporting requirement outlined in the legislation indicates digital asset brokers must report all digital asset transactions worth more than $10,000. The IRS is expected to issue further guidance in the coming weeks on what taxpayers can expect as we head towards year-end planning and reporting requirements.
As with any new legislation, applying a high-level understanding of the law to your specific situation is vital to sound decision-making. Our team will continue to update this article as new information is available.
We do anticipate significant tax changes in the Build Back Better bill currently being discussed and will keep you updated as to any relevant tax provisions if the bill is passed.