On November 15, 2021, President Biden signed the Infrastructure Bill into law. Wondering how this affects your business and your employees? We’ve got you covered—keep reading to understand what you need to know as a business owner.
What is the Infrastructure Bill?
This is a $1.2 trillion bill aimed at improving infrastructure across the United States; the passage of the bill is being hailed as a bipartisan victory, as this legislation was supported by both Democrats and Republicans.
The bill passed in the Senate by a 69-30 in August, and passed in the house by a 228-206 vote on November 5, 2021.
Biden signed it into law on November 15, 2021.
How will the Infrastructure Bill affect my business?
The bill doesn’t have many provisions that will directly impact your organization; below is what you can expect.
The Employee Retention Credit has expired
Although the Employee Retention Credit (ERC) was initially meant to last through the year, the bill included a section on ending the program early–and with the passage of the bill, ERC has officially been terminated as of September 30, 2021. This means that employers can claim tax credits through Q3 of tax year 2021 (see this post (and calculator!) to understand if you are eligible for the tax credit and this one to know how much of a tax credit you can claim), but any wages paid after the end of September will not qualify for ERC.
An important exception: if you own/operate a Recovery Startup Business (a business that started after February 15, 2020 and has gross receipts are under $1M), you may still be eligible for ERC through Q4 of 2021. Recovery Startup Businesses are the only businesses that may claim ERC through the end of the year.
There is an effort being undertaken by the National Payroll Reporting Consortium (NPRC), an organization dedicated to providing payroll and employment tax services directly to employers, to get the government to extend the ERC program. However, it’s unlikely this effort will be successful.
A little refresher on ERC: this is a federal tax credit program that provided an incentive to businesses that kept their workers employed throughout the COVID-19 pandemic. The program offered a refundable tax credit against qualified employee wages.
How will the Infrastructure Bill affect my employees?
The bill is designed to improve the lives of all Americans—from how we travel, to the cars we buy, to the water that we use in our homes—which means that all U.S. residents (including you and your employees) may feel the impact in the years to come. Here are the primary provisions of the bill:
Funding for public transportation: $39 billion will be used to improve and modernize public transport systems to meet the needs of riders.
Funding for roads and bridges: $110 billion has been allocated to building and improving road and bridges across the country.
Funding for railways, airports, and ports: $66 billion will be invested in upgrading Amtrak rail services and bringing railways to more regions; $25 billion will address airport maintenance, and $17 billion is going to port infrastructure.
Funding for power: $65 billion will be used to build new power lines, expand renewable energy, and build out electrical grid systems.
Funding for broadband: $65 billion will be dedicated to upgrading and improving broadband infrastructure across the country.
Funding for electric vehicles: $7.5 billion has been allocated to patching gaps in electric-vehicle charging infrastructure and $5 billion will go to replacing traditional buses with zero-emission vehicles.
Funding for water systems: $105 has been dedicated to upgrading the water infrastructure and protecting water systems from droughts and floods.
Funding for environmental efforts: $21 billion will be used to clean up certain sites across the country.
I’ve heard about the Build Back Better Act–has that law has passed?
The Build Back Better Act (BBB; also known as the Reconciliation Package) is not the Infrastructure Bill. BBB is a related but separate piece of legislation that Congress will focus on next; BBB has not yet passed in the House nor the Senate, so it is not law–and therefore, is not yet in effect. Congress is expected to pass BBB before the new year, so stay tuned and we’ll keep you posted.
If passed, the BBB will (likely) include:
- Major investments in SBA programs, making it easier for small businesses to access capital
- Folding the Minority Business Development Agency (MBDA) into the federal government
- Changes to the tax code that will end tax breaks for businesses that shift workforces and profits abroad
- Increasing the child tax credit
- Expanded paid leave programs
- Investments in childcare and preschool
Check back and we’ll let you know if and when this law passes.