New Bill Repeals Employee Retention Credit for Q4 2021

The Infrastructure Investment and Jobs Act, passed by the House of Representatives last week and expected to be signed into law by President Biden, contains a provision that ends the employee retention credit (ERC) early for most employers.

The Act makes wages paid after September 30, 2021 ineligible for the ERC. However, “recovery startup businesses” are the exception and can continue to claim the credit through the end of 2021.

Under the Act, a recovery startup business is defined as one that:

  • began carrying on any trade or business after February 15, 2020, and
  • has average annual gross receipts that do not exceed $1 million for the 3-year period ending with the tax year that precedes the calendar quarter for which the ERC is calculated.

Grassi’s Tax Planning & Compliance advisors will keep you informed of developments in the ERC and other changing tax law. For more information, please contact your Grassi tax advisor or Robert Tobey, Tax Partner, at rtobey@grassicpas.com or 212.223.5029.


Robert L. Tobey Robert L. Tobey, CPA is a Partner in the Tax Services practice at Grassi, where he guides clients through the complexities of tax planning and compliance on the federal, state and international levels. He specializes in helping pass-through entities, multi-state corporations, high-net-worth individuals and investors meet their business, tax savings and wealth preservation goals. Robert advises clients in a wide range of industries, with... Read full bio