Be Careful on 4th Quarter Employee Retention Credit

Most farmers are aware that there is an employee retention credit (ERC) that allows a payroll tax credit of up to $7,000 per employee for each quarter that the employer qualifies for.  This credit had been extended to December 31, 2021. 

However, the Infrastructure Bill passed by the Senate and stuck in the House has a provision that eliminates this credit as of September 30, 2021.  You may still qualify for the credit in the fourth quarter if you are a qualifying start-up business which will not apply to most farmers.

If the House were to pass this bill, then the credit would stop as of September 30, 2021.  But there would be a good chance that the second bill dealing with “human” infrastructure may reinstate the credit for the remainder of the year but this is not guaranteed.

Now that we are into the fourth quarter, it may be prudent to simply claim an ERC on your Form 941/943 that you will file in January 2022 versus claiming directly against your normal payroll tax deposits.

We will keep you posted on the final details.