Infrastructure bill ends employee retention credit; includes new cryptoasset reporting

On Friday, the U.S. House of Representatives passed H.R. 3684, the “Infrastructure Investment and Jobs Act,” a $1.2 trillion infrastructure bill in a 228-206 vote, sending the legislation to President Joe Biden for his signature.  The bill includes the following tax law changes:

Employee Retention Credit

Prior to the bill, eligible employers could claim the employee retention tax credit for wages paid before January 1, 2022, against applicable employment taxes. For each calendar quarter in 2021, the amount of the credit is a maximum of $7,000 for each employee. 

As part of the bill, the employee retention credit will be terminated earlier than scheduled by making it applicable only to wages paid before October 1, 2021 (rather than wages paid before January 1, 2022). 

Cryptocurrency Reporting

The bill imposes tighter tax reporting requirements levied on brokers who facilitate cryptocurrency trading, among other types of trading.  Specifically, the bill imposes reporting requirements for “brokers” about crypto transactions for standard items most stock brokers report on investments already – basic data such as price points at purchase and sale, etc.  

The definition of “broker” is expanded to include anyone who for consideration effectuates “transfers of digital assets on behalf of another person.” For these purposes, “digital asset” is defined as “any digital representation of value which is recorded on a cryptographically secured distributed ledger or any similar technology.”  This means not only would brokers need to report, but also other entities in the crypto value chain, such as developers and crypto miners.

Other Provisions:

Other tax provisions included in the bill include:

• Extending various highway-related excise taxes (including fuel taxes and heavy vehicle use taxes) as well as certain related exemptions for six years

• Modifying the automatic extension of certain deadlines in the case of taxpayers affected by federally declared disasters

• Extending certain Superfund excise taxes through December 31, 2031, and modifying the amount of tax applicable to certain chemicals, generally effective as of July 1, 2022.