Employee Retention Tax Credit Eliminated in House-Senate Tax Agreement

House and Senate leaders have reached a deal on an $80 billion tax package that would temporarily expand the child tax credit and boost several business incentives. The bill would be paid for by shutting down the employee retention credit (ERC) early and penalizing fraudulent promoters of the credit.

According to the deal, the deadline for any additional filings for the credit will be moved up from the original April 15, 2025, date to January 31, 2024. The package also includes significantly heftier fines of up to $200,000 or more for promoters who market fraudulent access to the credit.

The IRS stopped processing ERC claims last September after repeated warnings to taxpayers about aggressive media marketers promoting the availability of the credit to non-eligible individuals. The log jam of fraudulent filings has prevented the IRS from processing legitimate claims in a timely manner.

While there is agreement among the House and Senate tax committee chairs and the leadership in both chambers, it’s unclear if the package has enough additional congressional support to ultimately pass.

For more information, please contact:
Karin Johns