On November 5, 2021, the House passed the Infrastructure Investment and Jobs Act (the Act), comprehensive legislation that calls for a $1.2T investment in the nation’s aging infrastructure. Initially, there will be $550B allocated over five years to upgrade bridges, roads, transit, rail, water systems, electrical grids, and broadband.
As the financial and operational challenges created by the COVID-19 pandemic begin to subside, many New Jersey and Pennsylvania-area businesses are starting to turn the corner. It was recently reported by the U.S. Bureau of Labor and Statistics (BLS) that New Jersey added another 21,500 jobs in September, which means the state has reclaimed 68% of the jobs lost during the pandemic. In Pennsylvania, the unemployment rate has fallen to 6.7%, with parts of the state reporting a better 6.3%. A key reason so many businesses were able to survive during recovery is federal COVID-19 relief programs such as the Employee Retention Credit (ERC).
Every year, businesses submit thousands of research and development (R&D) claims to the IRS and state taxing authorities for tax credits in the hundreds of millions of dollars. Both corporations and individuals benefit from credits for research. Claims are filed in accordance with Internal Revenue Code (IRC) Section 41. If substantial, they can be subject to examination by the IRS and states, often using significant resources for both taxing authorities and taxpayers. To improve tax administration and reduce the number of disputes over claims, the IRS released Notice 2021-203 on October 15, 2021.
The conditions created by the COVID-19 pandemic forced many businesses to make changes to adapt to the “new normal.” For example, the stay-at-home orders, social distancing requirements, and other customer/employee safety measures resulted in limiting the number of employees on the production floor, installing new barriers to prevent transmission, adding sanitization protocols, and much more. At the same time, office buildings were virtually empty as employees were permitted to work from home under remote work policies.
The Employee Retention Credit (ERC) is one of a handful of federal programs aimed at helping organizations and businesses maintain healthy operations through the ongoing COVID-19 pandemic. For nonprofits, programs like the ERC and the Paycheck Protection Program (PPP) can be the difference between providing services and having to shutter their doors.
Businesses will see their leases in a whole new light as they begin implementing the Financial Accounting Standards Board’s (FASB’s) new lease reporting standards. As was revealed in early 2016, the FASB will soon require almost all for-profit and nonprofit entities to start recording leases on their balance sheets and statements of financial position.
The Biden Administration’s Build Back Better Act (the Act) is designed to reduce costs, create new jobs, and cut taxes for working families. In addition, there are proposed investments in health and childcare, higher education, workforce training, and teachers and schools. The cost of the legislation, which is estimated at $3.5T, will be paid for by increased taxes on corporations and the wealthiest Americans.
Since earlier this year, the Biden Administration has been pursuing a legislative agenda that focuses on COVID-19 economic recovery and re-energizing the American economy. It started with the American Rescue Plan Act and has continued with several other proposals culminating in the Build Back Better Act (the Act). The Act is designed to reduce costs, create new jobs, and cut taxes for working families. There are proposed investments in health and childcare, higher education, workforce training, and teachers and schools.
Within the IRS is the Tax-Exempt & Government Entities Division (TE/GE), and its mission is to help customers understand and comply with tax laws and apply those laws with integrity and fairness to all. Its customers comprise employee plans, exempt organizations, and government entities, covering such diverse organizations as major universities, pension funds, state and local governments, charities, and private foundations.
As federal COVID-19 relief programs continue to diminish, New Jersey and Pennsylvania-area businesses are searching for other funding opportunities. Several companies have not yet fully recovered from the pandemic’s devastating fallout, while others are concerned about the potential impact of COVID variants. There has been a reported 30% increase in COVID hospitalizations in New Jersey, while Pennsylvania reported triple-digit growth in the number of new cases.
