President Joe Biden’s signing of the Infrastructure Investment and Jobs Act (IIJA) on Nov. 15, 2021, retroactively eliminates an employer’s ability to claim employee retention credits (ERC) for eligible wages paid after Sept. 30, 2021. This means the maximum ERC per employee available to an eligible employer in the tax year 2021 is $21,000, not $28,000.
Background
The Coronavirus Aid, Relief, and Economic Security Act (CARES) Act provided a refundable employment tax credit for eligible employers paying qualified wages and health plan expenses. This tax credit was available for any employer whose business operations were fully or partially suspended due to orders from a governmental authority or an employer with a significant decline in gross receipts.
