The Infrastructure Investment and Jobs Act, signed by President Biden earlier this week, contains many provisions related to individuals, businesses, information reporting, pensions and excise tax. Contained here is a high-level overview of some of the key provisions that may impact you or your business. For more detailed information, please contact us to discuss how these provisions relate to your specific tax situation.
Individual Provisions
Automatic extension of certain deadlines for taxpayers affected by disasters
A mandatory, automatic 60-day extension period applies to qualified taxpayers impacted by federally declared disasters.
Combat-zone filing extension applies to more tax-related filings
Individuals who are in the military are entitled to a period of extension. The period of extension applies to certain tax-related acts (e.g., filing returns, paying tax and filing Tax Court petitions) by taxpayers or by the government.
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 on the date a Tax Court petition is due, the relevant time period for filing that petition is tolled for the number of days within the period of inaccessibility plus an additional 14 days.
Authority to postpone certain tax deadlines by reason of significant fires
The IRS can suspend filing and payment requirements for taxpayers affected by federally declared disasters or terroristic or military actions. The Act amends the code to add “significant fire” to the list of events that allow the IRS to suspend filing and payment requirements.
Business Provisions
Employee retention tax credit
The Act provides that the employee retention tax credit applies to wages paid by an eligible employer after June 30, 2021 and before October 1, 2021, except in the case of a recovery startup business in which wages paid between June 30, 2021 and December 31, 2021 are eligible.
Tax-exempt bond financing for broadband projects in underserved areas
The Act allows qualified broadband projects to be financed with exempt facility bonds.
State and local bonds for qualified carbon dioxide capture facilities granted tax-exempt “exempt-facility” bond status
A private-activity bond will nevertheless be tax-exempt if it qualifies as an “exempt facility” bond. For bonds issued after December 31, 2021, the Act adds “qualified carbon dioxide capture facilities” to the types of exempt facilities that may be financed by tax-exempt facility bonds.
Increased limit for highway/surface freight transportation facility bonds
Under the Act, the national limitation on qualified highway or surface freight transfer facility bonds is increased from $15 billion to $30 billion.
Certain contributions to a regulated public utility are nontaxable contributions to capital
The Act restores the provision under which cash or other property contributed as a contribution in aid of construction (CIAC) to a regulated public utility that provided water or sewerage disposal services are treated as a tax-free contribution to capital if certain conditions are met and broadens it to provide that a contribution to capital of the taxpayer includes any amount of money or property received from any person if that amount was either a CIAC or a contribution to the capital of the utility by a governmental entity providing for the protection, preservation, or enhancement of drinking water or sewerage disposal services.
Information Reporting Provisions
Information reporting for brokers and digital assets
The Act provides that a digital asset is a specified security subject to the information reporting requirements of brokers.
Reporting broker-to-broker transfers of digital assets
The Act provides that any broker, with respect to any transfer during a calendar year of a covered security, which is a digital asset, from an account maintained by the broker to an account which is not maintained by a person that the broker knows or has reason to know is also a broker, is required to file a return for the calendar year.
Digital asset treated as cash for $10,000 reporting purposes
The Act provides that cash includes any digital asset and therefore, any transfer of a digital asset to a person engaged in a trade or business of $10,000 or more must file an information return with the IRS and furnish the payor with a statement.
Pension Provisions
Extension of interest rate smoothing for single-employer defined benefit plans
The Act further extends interest rate smoothing an additional five years to 2034.
Excise Tax Provisions
Highway trust fund taxes and the LUST tax extended
Under pre-Act law, various excise fuel taxes which fund the Highway Trust Fund were scheduled to be reduced after September 30, 2022. Additionally, the $0.01 per gallon “LUST tax” was scheduled to expire after September 30, 2022. The Act delays the excise fuel tax rate reductions until after September 30, 2028 and extends the $0.01 per gallon LUST tax to apply through September 30, 2028.
Chemical and imported substance superfund excise taxes restated and modified
The Act reinstates two Superfund Excise Taxes through December 31, 2031: the tax on certain chemicals and the tax on imported substances.
