Employers Can Begin Withdrawing Pandemic-Era Tax Credit Claims

The IRS will accept withdrawal requests starting Thursday for employers who want to take back potentially inaccurate employee retention tax credit claims to avoid future repayment, interest, and penalties.

The refundable employee retention credit was created to help businesses keep employees on the payroll during the Covid-19 pandemic. But the credit spurred a third-party marketplace that has been fraught with abuse.

The IRS paused the processing of new claims and is now offering relief for taxpayers who unknowingly filed a fraudulent or overstated claim. Withdrawn claims will be treated as though they were never filed, the IRS announced Thursday.

“The ...