President Biden Signs $1.2 Trillion Bipartisan Infrastructure Bill

White House | Bipartisan Infrastructure Bill | Ohio CPA

Today, President Biden signed into law the $1.2 trillion bipartisan infrastructure bill that has been stalled in Congress for several months. Below is a summary of the tax provisions included in that bill.

Expanded cryptocurrency reporting: Beginning on Jan. 1, 2023, these changes would expand broker reporting requirements to digital assets like cryptocurrency and add digital assets to the current rules requiring businesses to report cash payments over $10,000. The Act would define a digital asset as, “any digital representation of value which is recorded on a cryptographically secured distributed ledger or any similar technology as specified by the IRS.”

Elimination of Employee Retention Credit (ERC): The infrastructure bill eliminates the ERC effective Sept. 30, 2021, for all employers except in the case of an eligible “recovery startup business.” The credit had recently been enhanced and extended through the end of 2021, but this provision of the infrastructure bill ends that extension of the ERC one quarter earlier.

Automatic deadline extensions for taxpayers affected by federally declared disasters: The bill provides a longer 60-day extension after the declaration of a federal disaster.

  • Instead of a 60-day extension from the date of the “incident” that caused the federally declared disaster, the extension is 60 days from the later of either (1) the earliest event that caused the disaster, or (2) the date a federal disaster declaration is issued.
  • If multiple declarations are issued within the 60-day extension period, a separate extension period is determined with respect to each disaster declaration.

Interest rate stabilization of Defined Benefit plans: Defined benefit plans’ required funding percentages are decreased to 105 percent of expected liability through 2030, and then gradually increase between 2031 and 2034.

Tolling of time for filing a petition with the Tax Court: In any case in which a “filing location” is inaccessible or otherwise unavailable to the general public (including by reason of a lapse in appropriations) on the date a Tax Court petition is due, the relevant time period for filing that petition would be tolled for the number of days within the period of inaccessibility plus an additional 14 days.

Expansion of tax-exempt bond availability: The bill provides tax-exempt bond status for certain infrastructure projects including qualified broadband projects that bring high-speed broadband to underserved communities, and carbon dioxide capture and sequestration facilities. The carbon sequestration credit under Code Section 45Q is reduced by the amount of any tax-exempt bonds the recipient utilizes.

Capital contributions to wastewater and sewage disposal utilities: Water and sewage disposal utilities recognize as capital contributions, and not income, any contributions in aid of the construction of facilities and any contributions by a governmental entity in aid of the construction of facilities. This does not include any user fees for starting or stopping service. Those user fees are taxable income to the utility.

Transportation-related taxes: The bill renews and extends a number of excise and transportation-related taxes.

  • The section 4661 excise tax from July 1, 2022, through Dec. 31, 2031, on Superfund chemicals.
  • The Section 4041 tax on fuel and kerosene used in diesel-powered highway vehicles or diesel-powered trains to Sept. 30, 2028.
  • The Section 4081 tax imposed on certain fuels being removed from refineries or terminals or certain fuels entering into the U.S. for consumption, use, or warehousing to Sept. 30, 2028.
  • The Section 4051 tax on heavy trucks and trailers sold at retail to Oct. 1, 2028.
  • The Section 4071 tax on certain tires to Oct. 1, 2028.
  • The Section 4481 tax on the use of any highway motor vehicle which has a taxable gross weight of at least 55,000 pounds to Oct. 1, 2029.

Want to dig deeper into the infrastructure bill? Ty Whittenburg discussed the bill with Rea’s director of tax services, Matt Dasta, in the November 2021 episode of Cyber Chat.

Please contact your Rea advisor for specific guidance related to the provisions of this bill and how they will impact you.

By: Matt Dasta, CPA, CITP, CExP (Dublin Office)