Tax Tip: U.S. Business Recovery Demands Tax Incentives and Adjustments

Businesses around the world suffered a great deal this year, and U.S. businesses were no exception. Matching the dynamism of the business environment, Congress created and adjusted a variety of Covid-19 related financial tools.

Resources such as the Employee Retention Credit were both created, through the CARES Act, and then halted, with the Infrastructure Investment and Jobs Act, within the span of a year-and-a-half. Recent bills, including the bipartisan Employee Retention Tax Credit Reinstatement Act, seek to extend the eligibility period for the incentive as the true impact of the omicron variant has yet to be seen.

The unpredictability of business recovery will continue to be mirrored in the tax credit and incentive ecosystem. As we look ahead to best preparing clients to take advantage of eligible resources in 2022, it will be imperative that tax preparers remain nimble and well-informed of the incentives created and adjusted rapidly as the year proceeds. Notably, even credits like the employee retention tax credit, for which eligibility ended in September 2021, can and should be back-claimed.

This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.

Author Information

Eric Hylton is the former IRS Commissioner of the Small Business Division and current National Director of Compliance at alliantgroup.

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