HEALS Act Includes AGC-Supported Changes to Employee Retention Tax Credit

Increases the Maximum Tax Credit Available to Employers Affected by COVID-19

The Health, Economic Assistance, Liability Protection and Schools (HEALS) Act, introduced on July 27 by Senate Republicans, contains AGC-supported changes to the Employee Retention Tax Credit (ERTC), similar to what was included in the HEROES Act which was passed out of the Democratically-controlled House of Representatives earlier this year. The changes would increase the maximum tax credit available to employers affected by COVID-19 from 50 percent of $10,000 of employee wages (or $5,000), to 65 percent of $30,000 in employee wages over three calendar quarters (or $19,500). The HEALS Act would also ease eligibility for the ERTC and allow larger employers to apply for the full credit. It would also allow employers who applied for and received Paycheck Protection Program (PPP) loans to also qualify for the ERTC, with restrictions against “double dipping.” Under the CARES Act, which created both programs, employers were restricted from using the ERTC or the PPP, but not both. 

For additional information, please see the summary of the HEALS Act tax provisions by the Senate Finance Committee, available here

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