Greetings from the Seth and Alexander Team,

 

President Biden recently signed H.R. 3684 into law on November 15, 2021. Also known as the Infrastructure Investment and Jobs Act, this piece of legislation includes a few tax provisions effective immediately that we’d like to bring to your attention. Allistair Nevius and Ken Tysiac from The Tax Advisor outline the changes as follows:

 

Employee Retention Credit

The ERC was created within the original CARES Act in 2020 due to the COVID-19  pandemic and has been extended and amended to include wages paid in the third and fourth quarters of 2021. H.R. 3684 repeals the fourth quarter extension, meaning all wages paid after Sept. 30, 2021 are ineligible for the credit. Eligible startup recovery businesses are an exception to the provision. It remains unknown whether employers who would have qualified for the fourth quarter credit and reduced their payroll tax deposits prior to the passage of the bill, will face late deposit penalties for the short-fall of the payroll taxes deposited.

 

Disaster Relief

Certain extensions in the SECURE Act of 2019 will be modified by H.R. 3684. Automatic extensions for taxpayers in federally declared disaster areas will be affected as the term “disaster area” will be redefined as an area in which a major disaster for which the President provides financial assistance. All assistance will be in accordance with section 408 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act.

 

Cryptocurrency

While the IRS has already declared gains on cryptocurrency assets taxable, H.R. 3684 substantially expands the tax implications for transfer of crypto and digital assets. The legislation now requires crypto exchanges to issue a 1099-B, directly notifying the IRS of any cryptocurrency transactions. Transfers of digital assets over $10,000 are also subject to the new law.  

 

Other Tax Provisions

Other tax provisions are within the legislation, including extension of various highway-related taxes, and extension and modification of certain superfund excise taxes.