New Hope for Restoring and Fixing the Employee Retention Credit
As you may remember, two bad things happened to the Employee Retention Credit (ERC):
On November 15, 2021, Congress retroactively repealed the ERC for the fourth quarter of 2021 (except for start-up businesses).
On August 4, 2021, the IRS issued the clearly irrational Notice 2021-49, stating that a corporate owner with certain living relatives does not qualify for the ERC.
Hope in the House
On December 7, 2021, Rep. Carol D. Miller (R-WV-3) and three co-sponsors offered H.R. 6161, the Employee Retention Tax Credit Reinstatement Act, which would reinstate the ERC for the fourth quarter. On the day it was presented, the House referred the bill to its Committee on Ways and Means—a good thing.
Today, there are 54 bipartisan co-sponsors. The bill has some legs.
Hope in the Senate
On February 10, 2022, Sen. Margaret Wood Hassan (D-NH) along with four co-sponsors introduced S. 3625 (identical to H.R. 6161) in the Senate, where it was read twice and referred to the Senate Committee on Finance.
The bill now has seven co-sponsors. Sen. Hassan and three of the co-sponsors are on the Senate Committee on Finance—a good sign.
Now is a good time to call your congressional representatives and ask them to both
support H.R. 6161 or S. 3625 to reinstate the ERC for the fourth quarter of 2021, and
override IRS Notice 2021-49 and allow the ERC on the wages paid to corporate owner-employees. Clarity on this is important to everyone, including the IRS.
How to Do It
Make as many phone calls as you can. Start with the tax law writers, your senators, and your congressional representative. Here’s contact information for them:
Richard Neal, Chairman, Committee on Ways and Means, United States House of Representatives (telephone: 1-202-225-5601; fax: 1-202-225-8112)
Kevin Brady, Ranking Member, Committee on Ways and Means, United States House of Representatives (telephone: 1-202-225-4901; fax: 1-202-225-5524)
Ron Wyden, Chairman, Committee on Finance, United States Senate (telephone: 1-202-224-5244; fax: 1-202-228-2717)
Mike Crapo, Ranking Member, Committee on Finance, United States Senate (telephone: 1-202-224-6142; fax: 1-202-228-1375)
Your congressional representative (telephone: 1-202-224-3121)
Your two senators (telephone: 1-202-224-3121)
Please note that when you reach out in this way, it often feels as though you are communicating with a black hole and your message is not getting any attention. That’s wrong. Senators and congressional representatives log everything. You are being heard.