The Infrastructure Investment and Jobs Act was signed into law on Nov. 15, 2021. As a result, the Employee Retention Credit (ERC) will no longer be available in Q4, other than for recovery startup businesses, for wages paid after Sept. 30, 2021. The upshot is that those businesses that were expecting to be able to claim the credit for the duration of 2021 as a result of the American Rescue Plan are now looking at a shortened ERC lifespan and termination of the credit as of Oct. 1, 2021.

What does this mean for organizations? Regardless of circumstances the ERC will not be available for the fourth quarter of 2021. The maximum credit that any one employee will be able to generate for a qualifying business in 2021 will be $21,000 (or $7,000 per quarter for each of the first three quarters of the year).

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The sole exception is for a recovery startup business, which is defined in Section 3134 of the Internal Revenue Code as a business that began operations after February 15, 2020, and for which the average annual gross receipts do not exceed $1 million for the three-taxable-year period ending with the year that precedes the calendar quarter for which the credit is determined.

Oct. 1 has come and gone and we’re well into the fourth quarter — and there is talk, but no confirmation, of a potential reinstatement with a second infrastructure bill. Now may be the time for businesses to have a conversation with their tax advisor about an appropriate action for Q4.

For more information on the employee retention credit, contact Jennifer Rohen at jennifer.rohen@CLAconnect.com or 314-925-4326. For more information about CliftonLarsonAllen LLP, visit CLAconnect.com.

This article originally appeared on The Patriot Ledger: Employee Retention Credit will no longer be available in Q4 2021