The version of the infrastructure bill approved by the Senate earlier this month could end the employee retention credit three months sooner than expected. 

The ERC is a refundable tax credit against certain employment taxes under the Coronavirus Aid, Relief, and Economic Security (CARES) Act meant to help long-term care and other organizations that have been materially affected by COVID-19. It was extended and expanded by the Consolidation Appropriations Act and American Rescue Plan Act. Its early elimination could pose challenges for providers still coping with difficulties related to the COVID-19 pandemic, according to experts.

“This is a critically important tax credit that should be expanded and not eliminated. Assisted living communities have received little relief to date to assist with COVID-19 losses and employee retention,” Maggie Elehwany, senior vice president of public affairs at Argentum, told the McKnight’s Business Daily. “The federal government must do more to enable caregivers to continue to protect seniors during this pandemic, not less.”

In March, Tommy Brewer, managing director of specialty investment bank Ziegler, touted the ERC as a viable opportunity for many providers with 500 or fewer full-time employees to keep their employees on the payroll despite pandemic challenges. Multi-site operators with fewer than 500 employees per individual campus but more than 500 employees total also are eligible for the credit.

Brewer told the McKnight’s Business Daily on Tuesday that he works mostly with not-for-profit life plan communities and so declined to comment on how the potential change might affect a broader group of senior living and care providers.

He said, however, that he doesn’t believe that, if the Senate proposal passes and the ERS ends in the third quarter rather than at the end of the year, it “will have a major impact on not-for-profit life plan communities.”

In Ziegler’s experience, Brewer said, the credit “has not been heavily utilized by non-profit life care communities.

“This limited participation is likely due to few life plan communities meeting either of the two qualification standards: 1) fully or partially suspended business due to a government order or 2) employer has a significant decline in gross receipts,” Brewer said.

The infrastructure package is not a done deal, although the House of Representatives Tuesday approved a motion that will allow work to begin to help ensure a vote this fall.