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.
Paul Neiffer is a certified public accountant and business advisor specializing in income taxation, accounting services, and succession planning for farmers and agribusiness processors. Paul is a principal with CliftonLarsonAllen in Walla Walla, Washington, as well as a regular speaker at national conferences and contributor at agweb.com. Raised on a farm in central Washington, he has been immersed in the ag industry his entire life, including the last 30 years professionally. Paul and his wife purchase an 180 acre ranch in 2016 and enjoy keeping it full of animals.
Thank you Paul, appreciate the insight. Q4 ERC would be helpful as it has been a tough year.