Tuesday, March 1, 2022
Legislative Update: Biden to Resurrect a Revised Build Back Better Bill in Tonight’s State of the Union That May Include an ERC Extension and WOTC Enhancements
In anticipation of President Biden’s State of the Union tonight, OnCentive is tracking potential changes that can impact business tax credits with the emergence of a new bill. It has been said that the President plans to ask Congress to pass a revised version of the Build Back Better budget reconciliation bill that may include an extension to the Employee Retention Credit (ERC) and enhancements to the Work Opportunity Tax Credit (WOTC).
After the Infrastructure Bill was signed into law on November 15, 2021, it eliminated the Employee Retention Credit (ERC) for the fourth quarter of 2021. It was hopeful that the Build Back Better bill, which was passed by the House of Representatives in November 2021, would contain provisions to reinstate and extend the ERC into 2022. However, it stalled out in the Senate.
As the workforce is far from full recovery, there are many supporters lobbying for the reinstatement of the ERC including House members Congresswoman Stephanie Murphy (D-FL), Congresswoman Carol Miller (R- WV), Congressmen Kevin Hern (R-OK), and Terri Sewell (D-AL) whom introduced bipartisan legislation to restore the fourth quarter. Senators Maggie Hassan (D-NH) and Tim Scott (R-SC) have also introduced similar bipartisan legislation.
Additionally, the current Build Back Better bill includes provisions for the Work Opportunity Tax Credit (WOTC) that would increase the credit amount for certain categories from $2,400 to $5,000 per eligible new hire. It would also allow for rehires to qualify for WOTC during the COVID-19 recovery period through the end of 2022.
OnCentive is hopeful that a revised Build Back Better bill will include provisions for the extension of the ERC and the expansion of WOTC. We are closely tracking legislation and will provide updates, when available.