There have been a number of changes to the Employee Retention Tax Credit program since its inception. In addition, the IRS has announced several actions since the program started that could impact businesses claiming the credit. Let’s discuss how some of the more recent ones could affect the way you might experience the claims process. 

How Do Recent IRS Actions Impact Businesses Making ERTC Claims?

The Employee Retention Tax Credit – also known as the ERTC or ERC – is a refundable tax credit implemented through the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March 2020. Eligible employers can claim the ERTC for qualified wages paid in 2020, as well as quarters 1, 2, and 3 of 2021.

While the ERTC is not a loan and does not need to be repaid, businesses that erroneously or fraudulently claimed it may need to eventually pay it back with fees or penalties. For instance, in early December 2023, the IRS announced that it was sending more than 20,000 rejection letters to taxpayers who wrongly claimed the ERTC. 

“With the aggressive marketing we saw with this credit, it’s not surprising that we’re seeing claims that clearly fall outside of the legal requirements,” IRS Commissioner Danny Werfel said in a statement, according to CNBC

Unfortunately, in mid-September, the IRS announced an “immediate stop to new Employee Retention Credit processing” following a “surge of questionable claims.” That obviously impacted businesses claiming the ERTC or ones planning on doing so since it delayed their ability to make a claim or see an ERTC refund in a timely manner. 

That moratorium lasted through the end of 2023, and may now result in a flood of claims from business owners trying to get an application in before the first ERTC deadline – April 15, 2024, for all quarters in 2020.

Plus, in October, the IRS also released guidance on when applicants could expect to receive their ERTC funds. Sadly, the agency announced that “processing has slowed due to the complexity of the amended returns” and noted that processing was delayed at that time while all current claims were being reviewed. 

These recent IRS announcements clearly impact business owners who are trying to claim the Employee Retention Tax Credit the right way. Thanks to businesses attempting to claim the ERTC when they shouldn’t – whether they mean to turn in an ineligible claim or not – honest business owners may be left waiting for much-needed ERTC refunds. 

How Dayes Law Firm Can Help

If you are interested in claiming the ERTC and are worried about having limited time left to do so, Dayes Law Firm can help. 

Our team can work with you through every step of the claims process and answer any questions you may have about the ERTC or IRS actions related to it. We can keep you up to date on any new IRS guidance and make sure that the claim you turn in is as strong and accurate as possible. 
Please contact us today by calling (800) 503-2000 for a free, no-obligation consultation on the unique circumstances of your business when it comes to the Employee Retention Tax Credit. We have helped many businesses with claims so far and would be more than happy to help you as well. Call today to learn more!