New Tax Provisions in the Infrastructure Act Passed November 5, 2021

H.R. 3684, known as the Infrastructure Investment and Jobs Act, passed the House of Representatives just before midnight Friday, November 5, 2021 and is headed to President Joe Biden’s desk to be signed into law. The new law was approved by the House in a 228–206 vote after passing the Senate by a 69–30 vote in August.

There are relatively few tax provisions in the infrastructure legislation. More extensive changes are likely coming in a Budget Reconciliation bill that remains under consideration by Congress. Those would include extensions of recent changes to the child tax credit and earned income tax credit, an increase in the deduction for state and local taxes to $80,000, a corporate minimum tax for large corporations, and limits on the interest expense deduction.

Employee Retention Credit

The infrastructure act retroactively terminates the employee retention credit (ERC) by allowing the credit only for wages paid before October 1, 2021, except for wages paid by an eligible recovery startup business. A recovery startup business is one formed after February 2020.

The ERC was created by the CARES Act, and amended by the Consolidated Appropriations Act. The American Rescue Plan Act, enacted March 11, 2021 expanded the ERC credit to wages paid during the third and fourth quarters of 2021. However, the Infrastructure Act repealed the credit for wages paid in the fourth quarter of 2021. The IRS issued guidance on claiming the credit in the third and fourth quarters of 2021 (Notice 2021-49 (, but noted in that guidance that it is watching this legislative development. While retroactive legislation seems unfair and creates problems for those relying on the law as it existed before it was repealed retroactively, this is not the first time we have seen retroactive tax legislation, nor will it be the last.

Crypto Asset Reporting

Cryptocurrency exchanges must now report information to both the IRS and to their customers. The Infrastructure legislation passed on November 5, 2021 imposes new crypto asset information reporting requirements on brokers. The IRS definition of “broker” is now expanded to include anyone who transfers digital assets on behalf of another person for a fee. A digital asset is defined as “any digital representation of value recorded on a cryptographically secured distributed ledger or any similar technology.”

The following information is now required to be reported: (1) name, address, and phone number of each customer; (2) the gross proceeds from any sale of digital assets; and (3) capital gains or losses and whether such capital gains or losses were short-term (held for one year or less) or long-term (held for more than one year).

While the legislation does not specify what IRS forms cryptocurrency exchanges must send to their customers, we assume that they must send Form 1099-B (“Proceeds from Broker”), just as traditional brokers do.

In addition, the new law also now classifies a digital asset with a value of $10,000 or more as “cash” that must be reported with IRS Form 8300. This form requires the filer to report: (1) the name, address, and TIN of the person from whom “cash” was received; (2) the amount of “cash” received; and (3) the date and nature of the transaction.

Disaster Relief

The Infrastructure Act also modifies the filing and reporting deadlines for persons affected by federally declared disasters in Sec. 7508A. It defines a disaster area in Sec. 7508A(d)(3) as “an area in which a major disaster for which the President provides financial assistance under section 408 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5174) occurs.” This will give greater certainty to those affected by federally declared disasters that their filing and reporting deadlines will be extended without having to wait.

Other Tax Provisions

The legislation includes other tax provisions, including extension of various highway-related taxes, and extension and modification of certain superfund excise taxes. It also would allow private activity bonds for qualified broadband projects and carbon dioxide capture facilities.