San Diego Certified Public Accounting Firm Since 1983

Contact Us 619.282.7366

Employee login

Client login

Click Here For our Update and Resources on COVID-19

Infrastructure Investment and Jobs Act Passed

November 11, 2021

On Friday November 5, 2021 the House passed the infrastructure Investment and Jobs Act (H.R. 3684), which is currently awaiting President Biden’s signature. The bill provides for $1.2 trillion to be spent on a broad range of infrastructure items such as: new roads, bridges, railroads, public transit, airports, ports, electric vehicles, road safety, utilities, broadband, cybersecurity and climate change mitigation.

There are also still many proposals and tax law changes contained in the Build Back Better Act that are under discussion in Congress. None of those proposals are included here.

Individual Provisions

Automatic 60-Day Extension for Qualified Taxpayers Impacted by Federally Declared Disasters

IRC Sec. 7508A(d) provides an automatic 60-day deadline extension for qualified taxpayers impacted by federally declared disasters.

Under the new law:

  • The extension period is 60 days after the later of:
    • The earliest incident date, or
    • The date such declaration was issued.
  • Provides that when multiple declarations relating to a disaster area are issued within a 60-day period, a separate period is determined with respect to each declaration.
  • Revised the definition of ‘disaster area’ to mean an area for which the president provides financial assistance.

Effective: for disasters declared after the date this Act is enacted.

Significant Fires Added to List of Events That Meet Definition of Federally Declared Disasters

IRC Sec. 7508A(a) provides for extensions of time to be granted to taxpayers impacted by federally declared disasters.

Under the new law:

  • Significant fires will be added to the list of events that can meet the definition of a federally declared disaster.

Effective: for any fires for which assistance is provided after the date this Act is enacted.

Business Provisions

Employee Retention Credit (ERC) Retroactively Terminates as of September 30, 2021.

The CARES Act that was passed in March of 2020, provided a refundable payroll tax credit for qualified wages paid after March 12, 2020 through January 1, 2021. This was extended through a series of legislation through December 31,2021.

Under the new law:

  • The credit will be retroactively terminated as of September 30, 2021. With the exception being for eligible recovery startup businesses who will still be able to claim the credit through December 31, 2021. A recovery startup business is one that:
    • Began carrying on a trade or business after February 15, 2020.
    • Is not otherwise an eligible employer due to a full or partial suspension of operations or a decline in gross receipts.
    • For which the annual gross receipts for the three-taxable-year period ending with the taxable year that precedes the calendar quarter for with the credit is determined does not exceed $1,000,000.

Effective: September 30, 2021

Information Reporting Provisions

Reporting for Brokers Expanded to Include Digital Assets

IRC Sec. 6045(a) requires brokers to provide a statement showing the name and address of its customers, along with other information.

Under the new law:

  • The definition of broker is expanded to include “any person who (for consideration) is responsible for regularly providing any service effectuating transfers of digital assets on behalf of another person.” This would mean that after the date this becomes effective, a digital asset acquired would be considered a covered security, for which brokers will be required to report basis and gain/loss information when sold.

Effective: after December 31, 2023.

Reporting for Broker-to-Broker Transfers Expanded to Include Digital Assets

IRC Sec. 6045A(a) requires a broker who transfers a covered security to another broker to provide the other broker with a written statement so that the broker receiving the covered security has the information necessary to meet the basis and holding period reporting requirements.

Under the new law:

  • The definition of covered security is expanded to include digital assets.

Effective: after December 31, 2023.

Digital Asset Treated as Cash for $10,000 Reporting Purposes

IRC Sec. 6050I(a) requires that when a person is engaged in a trade of business and in the course of that trade or business receives more than $10,000 in cash (in one or more related transactions), they file an information return with the IRS and provide the payor with a statement.

Under the new law:

  • The definition of cash is expanded to include any digital asset.

Effective: after December 31, 2023.

Pension Provisions

Congress had previously signed into law in 2012 a 25-year pension interest rate smoothing, which allows companies to ignore current low interest rates when calculating their required contributions. These smoothed interest rates were set to start phasing out in 2021 until they were extended through 2029 by the American Rescue Plan Act of 2021.

Under the new law:

  • The interest rate smoothing would be further extended through 2034.

Effective: for plan years beginning after December 31, 2021.

Extension of Excise Taxes

Various excise fuel taxes were scheduled to be reduced after September 30, 2022 and some highway-use excise taxes were scheduled to expire after September 30, 2022.

Under the new law:

  • The higher excise taxes are to be extended through September 2028.

Effective: October 1, 2021.