On Oct. 6, four former lawmakers urged U.S. Congress to scratch proposals to retroactively end the Employee Retention Credit (ERC) in Q4 of 2021. They also pushed for more accessible education for business owners about the credit (To learn more about the ERC, check out the Employee Retention Credit section of the small business COVID survival guide that we published last year.).
The bipartisan group includes former Reps. Joe Crowley, D-New York, and Rick Lazio, R-New York, as well as former Sens. Mike Johanns, R-Nebraska, and Heidi Heitkamp, D-North Dakota – all of whom work for tax-consulting firm alliantgroup today.
And they made some great arguments – one that definitely hit home with small business owners and entrepreneurs alike.
First and foremost, we are very much still living in the pandemic. It is not over, and even when we can hopefully say that COVID-19 is not a big public health risk anymore, the effects will still linger. And currently, businesses everywhere are still reliant on the ERC to survive.
In addition, the workforce is not the same. Current labor shortages due to COVID-19 have caused supply chain problems that aren’t going away overnight.
“It is thanks to this expansion and extension of the ERC (as well as recent IRS guidance) that small and medium businesses and their tax advisors are finally learning about and becoming educated about the significant benefits of the ERC,” the group stated.
“Just since June, we have seen a week-by-week dramatic increase in the number of small and medium businesses that are applying for the ERC. The additional dollars these small and medium businesses are receiving under the ERC has been extremely meaningful for these businesses to retain employees and hire new employees.”
To read the full letter on alliantgroup’s website, click here.
What’s your take on all of this? We’d love to hear from you in the comments below.