Note:

The Infrastructure Investment and Jobs Act retroactively terminated the ERC for the fourth quarter of 2021 for all but "recovery startup " businesses. The ERC as amended by the Infrastructure Investment and Jobs Act, was limited to wages paid after June 30, 2021 but before October 1, 2021, unless the employer was a recovery startup business. An employer that was a recovery startup business could have claimed the employee retention credit for wages paid after September 30, 2021 but before January 1, 2022. See Notice 2021-65, for more information.

ARP also provided a temporary reduction in the premium that individuals paid when they elected COBRA continuation health coverage following a reduction in hours or an involuntary termination of employment. The new law provided a corresponding tax credit for eligible employers. COBRA premium assistance was available for periods of coverage beginning on or after April 1, 2021 through periods of coverage beginning on or before September 30, 2021. This provision allowed a credit (COBRA Premium Assistance Credit) against the employer share of Medicare tax in an amount equal to the premiums not paid by assistance eligible individuals for COBRA continuation coverage. The COBRA Premium Assistance Credit was claimed on employment tax returns for the second, third and fourth quarters of 2021 depending on when the employer (or other entity that maintained the health plan) became eligible for the credit.

The One Big Beautiful Bill (OB3), was enacted on July 4, 2025. It amended the ERC for the third and fourth calendar quarters in 2021. OB3 prohibits the IRS from allowing ERC claims and processing refunds for the claims, for the third and fourth quarter of 2021, after the date of the act, unless the claims were filed on or before January 31, 2024.

There have been several revisions to Form 941 to administer the COVID relief specified above, beginning with the 2nd quarter of 2020. Annual employment tax forms (Form 943, Form 944, and Form CT-1) were also revised for tax year 2020.