MSCI asks Congress to improve Employee Retention Tax Credit

The Metals Service Center Institute (MSCI) has joined with several other trade association and business advocates to ask federal lawmakers to improve the Employee Retention Tax Credit (ERTC). House and Senate lawmakers approved the ERTC in March to help businesses financially impacted by COVID-19.

As it exists now, this credit is available to businesses of all sizes that face closure orders or suffer economic hardship and continue to pay employees that are furloughed. These businesses may be eligible for a 50% credit on up to $10,000 of wages paid to those employees. (Click here for information from the Internal Revenue Service, here to read the National Association of Wholesalers’ Legal Advisory explanation of this program, and here to read the U.S. Chamber of Commerce’s review of the program.)

H.R. 6776, the Jumpstarting Our Businesses’ Success Credit (JOBS Credit) Act, would:

• Expand the credit percentage from 50% to 80% of qualified wages.
• Increase the per-employee limitation from $10,000 for all calendar quarters to $15,000 per calendar quarter (and an aggregate of $45,000 for all calendar quarters).
• Change the threshold for treatment as a large employer from employers having more than 100 employees to employers having more than 1,500 employees (based on the average number of full-time employees in 2019) or having gross receipts of more than $41.5 million in 2019.
• Establish a phased-in credit, which will allow employers with more than a 20% decline in gross receipts to be eligible for a portion of the credit.
• Improve coordination between the ERTC and the Paycheck Protection Program so employers can be eligible for both programs, but with guardrails in place to prevent “double dipping.”

The letter concluded, “These important enhancements to the ERTC will provide critical relief to employers as they continue to grapple with liquidity challenges during the pandemic.”