Temporary Moratorium on Employee Retention Tax Credits

[Julio Gonzalez]

The IRS has placed a temporary moratorium on the Employee Retention Tax Credits (ERTC) until 12/31/23 at a minimum. Hopefully this article answers some of the questions you may have.

Why did the IRS implement this pause?

• Strictly enforce more rules: As we’ve discussed in previous articles, the IRS has allocated significant funds to implement audit and enforcement measures in order to identify and penalize unqualified or fraudulent claims. Additionally, new repayment programs are being implemented for small businesses that may have filed incorrect claims unintentionally.
• Provide taxpayers with more education: The IRS is trying to educate taxpayers to better understand if they qualify for ERTC in order to reduce the amount of unqualified claims being filed.
• Alleviate the backlog: The pause will help the IRS catchup on the current backlog which is around 600,000 claims that need processing.

How will this affect you or your business?

This doesn’t halt the filing of new claims but be prepared for delays if you file after September 14, 2023. The existing deadlines remain unchanged.

• April 15, 2024 for 2020
• April 15, 2025 for 2021

For further info, refer to IRS Notice IR-2023-169