House Republicans would retroactively end the problem-plagued pandemic-era tax credit program early, potentially raising billions in revenue over 10 years if enacted as part of its tax bill.
Businesses and nonprofits that claimed the lucrative employee retention credit after Jan. 31, 2024 won’t get the extra boost that was created to help them keep workers on the payroll during the pandemic. The bill would stop the program, which ended April 15, over a year ahead of its expiration date and provide stricter penalties for abusers of the program.
The provisions in the bill are meant to help the IRS manage a program that was created by a pandemic relief law in 2020. It quickly became infiltrated by bad actors conning businesses into claiming the credit when they didn’t qualify and creating a slog for the IRS to sort through.
- The Joint Committee on Taxation estimated last year that the ERC provisions would have raised about $79 billion in revenue over 10 years, assuming the tax-credit program would have ended by Jan. 31, 2024.
- Many businesses rushed to file their claims ahead of the Jan. 31 deadline, which was first proposed in a $78 billion tax bill last year.
- The IRS has yet to process more than a half-million pandemic-era tax credit claims, which could take at least until the end of the year, the National Taxpayer Advocate said in a blog post earlier this month.
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